The India Pharmaceutical Industry is developing, producing and marketing drugs.
The pharmaceutical companies are generally dealing in generic or brand medications and medical device.
Indian Pharmaceutical Industry today is in the front rank of India’s science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology.
India enjoys a important position in the global pharmaceutical market. The Indian pharmaceuticals market is the third largest in terms of volume and thirteenth largest in terms of value.
It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured.
complete description about pharmaceutical industry how it work how it is operated both at micro as well as macro level. it also include leading pharma firms in market. in simple words if we say it is an industry analysis.
2. CONTENTS
• Introduction
• Snapshot
• Evolution
• Structure
• Industrial analysis technique-PESTEL & SWOT (Rhea & Rohit)
• Micro analysis of the industry –interview method (Krishna, Shubham & Jayashree)
• Comparison between micro and macro (Jayashree)
• Company profile
1. Sun pharma
2. Lupin
3. Dr Reddy
Gaurav Aitwani
Trishala Gautam
3. INTRODUCTION
• The India Pharmaceutical Industry is developing, producing and marketing
drugs.
• The pharmaceutical companies are generally dealing in generic or brand
medications and medical device.
• Indian Pharmaceutical Industry today is in the front rank of India’s science-based
industries with wide ranging capabilities in the complex field of drug manufacture
and technology.
• India enjoys a important position in the global pharmaceutical market. The
Indian pharmaceuticals market is the third largest in terms of volume and
thirteenth largest in terms of value.
• It ranks very high in the third world, in terms of technology, quality and range of
medicines manufactured.
4. SNAP SHOT
S.no. Metric Value
1 Turnover USD36.7 billion
2 Employees 29 MILLION
3 % of GDP 2%
4 FX earning USD 16.8 billion
5 Tax (contribution) 25%
6 Imports 254.57 USD Million
7 Exports US$ 16.4 billion
5. BEFORE THE
PASSING OF THE
INDIAN PATENT ACT
OF 1970 the indian
pharmaceutical
industry was
dominated by foregin
companies with little
domestic
participation
The INDIAN PATENT
ACT was passed in
1970 and led to the
development of
production
infrastructure.The
period beween1970-
1990 led to the
operation of several
domestic companies
during this period as
well as export
initiatives were also
taken during this
period.
THE 3rdSTAGE(1990-
2010)-During this
period the
liberalization led
Indian components
to launch operations
in foreign
countries. The
Patents Act was
amended in the year
2005 which led to
adoption to product
patents in
India. During this
period India became
a major generic drug
manufacturing
country
In 2013 New Drug
Pricing Control
Order were issued
by Directorate of
Food and Drugs
that were expected
reduce the prices
of drugs by 80%.
Further in
2014,100% FDI was
allowed in medical
device industry.
. In 2015, the
patent was
amended which
included the
amendments done
in the PATENT ACT
2002.
EVOLUTION
9. POLITICAL
• Governments
• Developing
countries
ECONOMIC
• The reduction in consumer
disposable income.
• These economic pressures
leading to increase startergic
buying
• Increased pressure from
shareholders
SOCIAL
It includes cultural change,
health problem, population
growth rate etc.
TECHNOLOGICAL
1. New info and Communications
technologies.
2. Social Media for Healthcare.
3. Customized Treatments.
4. Direct to Patient Advertising.
5. Direct to patient communications.
10. LEGISLATION Factors include consumer law,
employment law, and health and safety
law.
ENVIRONMENTAL
• Business and marketing plans link in
with the environmental issues.
• Corporate Social Responsibility
programmes.
• Eco opportunities
11. STRENGTH
• Competitive Production cost and drug
quality
• Speedy Clinical Trials
• Strong Focus by the Government
WEAKNESS
• Volatile Foreign
Exchange
• Low R&D investment
• Import dependence for
Bulk drugs
12. Opportunities
• Patent Cliff
• Optimistic targets by Government
• New markets- Rural Penetration
• Increasing global demand for
generics
Threat
• High Dependence on US market
• Growing threats from China API’s market
• IP regulations by developed countries are
getting tougher
15. PESTEL ANALYSIS
•Effect of GST
•Maintenance of stock
•Preference in regard to generic or branded
medicines
•Profit margin in regard to different customers
•Seasonal Variations
17. STRENGTH
• Licensing and authorization
• Variety of products
• Inelastic demand
• Approach to all sections of society
WEAKNESS
• High level of
competition
• Shelf life of stock is low
• Regulatory changes
• Unskilled manpower
18. Opportunities
• Wider market coverage , eg : selling
of both generic and non generic
drugs
• Tie up with upcoming pharma brands
Threat
•Competition from ancillary markets
•Threat of substitutes
•Threat of new entrants
19. COMPARISION
DESCRIPTION MICRO MACRO
ENTRY BARRIERS LOW HIGH
SUBSTITUTES HIGH LOW
COMPETITORS HIGH HIGH
SEASONAL VARIATIONS LOW HIGH
DEMAND CHAIN COMPLEX SIMPLE
POLITICAL DIRECT EFFECT INDIRECT EFFECT
20. COMPARISION
DESCRIPTION MICRO MACRO
ECONOMICAL EXPECTED TO GROW IN
FUTURE
STEADY GROWTH
SOCIAL LOW CORPORTAE SOCIAL
RESPONSIBILITY
HIGH CORPORATE SOCIAL
RESPONSIBILITY
TECHNOLOGICAL WIDE USAGE LESS USAGE
STRENGTHS COMPETITIVE PRODUCTION
COST, DRUG QUALITY
INELASTIC DEMAND, VARIETY
OF PRODUCTS
WEAKNESS LOW R & D INVESTMENT HIGH COMPETITION, LESS
SHELF LIFE
OPPORTUNITY INCREASING GLOBAL DEMAND WIDER MARKET COVERAGE
THREATS CHANGES IN REGULATORY
ENVIRONMENT
COMPETITION FROM
ANCILLARY MARKETS, THREAT
OF SUBSTITUTES
21. Dr Reddy Lupin SunPharma
Aurbindo Cipla
TOP 5 LEADING COMPANIES
POLITICAL
Governments often have great purchasing power and affect the industry most in political way and control the prices of the product in the industry.
' have dominate on manufacturing and increasing R&D investment. Those organizations tend to sell their product to high demand developing countries in higher prices
ECONOMIC
1. The reduction in consumer disposable income will have an impact on those countries using health insurance models particularly where part payment is required.
2. These economic pressures are seeing an increased growth in strategic buying groups who are forcing down prices.
3. Increased pressure from shareholders has caused a consolidation of the industry: more mergers and acquisitions will take place over the coming years.
SOCIAL
1. It includes cultural change, health problem, population growth rate etc. Social factors affect the demand of a company's products and how it operates. According to the case, ageing population and Medicare is reformed, extended drug coverage for elderly.
2. As population is becoming older, it means the demand of medicine also increases. Nowadays, population raise, also require more medicine.
TECHNOLOGICAL
Technological advancements will create new business prospects both in terms of new therapy systems and service provisions. The online opportunities will see the growth in:
New info and Communications technologies.
Social Media for Healthcare.
Customized Treatments.
Direct to Patient Advertising.
Direct to patient communications
LEGISLATION
Factors include consumer law, employment law, and health and safety law.
Pharmaceutical industry is subjected to regulatory and the department will examine all the data to support the safety, efficacy and stability.
Pharmaceutical promotion is subjected to self-regulation. Representative requires passing all the examination testing of medical knowledge. Some countries, government require the agency to check if the promotional claim is consistency with the data.
ENVIRONMENTAL
There is a growing environmental agenda and the key stake holders are now becoming more aware of the need for businesses to be more proactive in this field. Pharma companies need to see how their business and marketing plans link in with the environmental issues. There is also an opportunity to incorporate it within their Corporate Social Responsibility programmes. Marketing and new product development should identify eco opportunities to promote as well.
WEAKNESS
1) The Indian pharmaceuticals industry is export oriented, and it contributes to over 50% of pharma revenues. Hence, any fluctuation in currency leads to instability in receivables. In the last one year, Indian currency has depreciated by over 20% in a year against major currencies which has led to renegotiation by the importers.
2) Global pharma industry is highly driven by the amount of R&D made by the firms and companies spend over 15% of their annual revenue on R&D. However, Indian pharma companies invest just 4% of the revenue for R&D.
3) Although India represents over 30% of global generic drug consumption, over 80% of the required APIs are imported from China.
OPPORTUNITIES
As pointed out by a credit rating company, drug patent expiry in the USA will create new opportunity for Indian pharmaceutical industry in the coming years. ‘Patent Cliff’, a term used to describe the phenomenon of drugs approaching theirpatent expiration date, resulting in steep decline in sales of the branded drug as cheaper generics enter the market place to replace the branded drugs. Indian pharmaceutical companies have the opportunity to capitalize on the patent cliff and gain a greater share of the growing generics market.
The Indian pharmaceutical sector is targeting a 5% share of the global pharmaceutical market by the end of the Twelfth Five Year Plan. India currently has 2.4% market share globally. Some of the key expectations outlined in the Plan are:
Exports should be at USD 20 billion by the end of the Twelfth Five Year Plan (year 2017)
The sector should employ 1.5 million people by 2015, 1.898 million people by 2018 and 2.464 million people by 2022.
Domestic R&D should be internationally competitive
Improve domestic content in medical devices.
THREATS
The bulk drug industry in china is expanding rapidly and Indian exporters are finding it difficult to get a foothold in the Chinese market. Chinese APIs are approximately 1520 per cent cheaper compared to Indian APIs, and over 50 per cent of bulk drugs used in the industry for making formulations are imported from China
The U.S. is the top destination for Indian pharma exports followed by the UK. India’s pharmaceutical exports registered a sluggish growth offlate because of the growing tension with the US authorities over intellectual property rights related issues. Key developed nation export destinations like US, EU region has increased scrutiny and import alerts on Indian facilities and products over the recent past. This has adversely affected exports of several large medicine manufacturers.
