Pharmaceutical Sector

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PHARMACEUTICAL SECTOR : INDIA GROUP: 6 Agya Pal Singh Bharathwaj S Gurudas KR Indu Bagchandani Parnika Chaurasia

 

 

PHARMACEUTICAL SECTOR : INDIA

OVERVIEW 

 Accounting for 2 % of the world's pharmaceutical pharmaceutical market, the Indian pharmaceutical pharmaceutical sector  has an estimated market value of about US $8 billion. It's at 4th rank in terms of total pharmaceutical production and 13th in terms of value. It is growing at an average rate of 7.2 % and is expected to grow to US $ 12 billion by 2010.



Over the last two years the pharmaceutical market value has increased to about US $ 355 million because of the launch of new products. According to an estimate, 3900 new generic products have been launched in the past two years. These have been by and large launched by big brands in the pharma sector. And in the year 2005 Indian pharmaceutical companies captured around 70% of the domestic market. As in the present scenario, only a few people can afford costly drugs, which have increased price sensitivity in the pharmaceutical market. Now the companies are trying to t o capture the market by introducing high quality and low price medicines and drugs.

 

With the Product Patent Act, which came into action in January 2005, this industry is able to attract big MNCs to India. Earlier these big firms had apprehensions in launching new drugs in the Indian market

 

 At present, a large large number number of Indian pharmaceuti pharmaceuticals cals companies companies are looking looking for tie-ups with foreign firms for in-license drugs. GlaxoSmithKline is among the top choices for the firms that wish to launch their product in India, but do not have any branch over here.

 

 



Contract research and pharmaceutical outsourcing are the new avenues in the pharmaceutical pharmaceu tical market. Contract manufacturing is growing at a very fast pace and is estimated to grow to US $30billio $30billion, n, whereas contract research is estimated to reach US$6-10 billion Indian multinational multinational companies like Dr.Reddy's Lab, Cipla, Ranbaxy, etc have created awareness about the Indian market prospects in the international pharmaceutical market.  Approvals given given by Foods and Drugs Administration Administration (FDA) (FDA) and ANDA (Abbreviated (Abbreviated New New Drug Application)/DMF (Drug Master File) have played an important role in making India a cost-effective and high quality product manufacturer. Furthermore, the changes that took place in the patent law, change of process patent to product patent, have helped in reducing the risk of loss for intellectual property Industry Strengths: Capital Investment in Technology: Owing to the availability of advanced technology at low

costs, the companies can produce drugs at lower costs.

Cost Effective: The filing cost of ANDAS and DMFs is comparatively low for the Indian companies. 2

 

 

Manpower: There is a large pool of technical experts available at modest salaries.

Contract Research & Contract Manufacturing: There is a good scope for contract research  

and contract manufacturing

 

Infrastructure: There is a well-developed infrastructure for the pharmaceutical industry. Generic Drugs: In the last few years, the generic drug-manufacturing segment has received

huge investments, in the process making it more competitive and efficient

 

PHARMACEUTICAL PHARMACEUTICA L INDUSTRY  

The Indian Pharmaceutical Industry is capable to meet the country's demand for every drug. The manufacturing units within the country are meeting about 80% of the country's drug requirements. The drug production sector is equipped with technology and researched knowledge base. The industry produces drugs worth rupees 18000 crores and is growing at 9 per cent every year. It offers quality products with internationally accepted quality standards. There are about 20,000 production units in India with products sold at competitive lower prices than international drug prices.

 

India has various competitive advantages in Pharma production over western world. It has a large pool of educated manpower with technical and managerial skills.

 

It has a well-developed research and development base equipped with advanced technology. Low cost of research over the Western countries gives India a potential advantage for future developments. The country has an open market policy where foreign capital investment is permitted. Restriction on capital investment has been removed in the recent years with a view to make new investments profitable. Also, the country has a strong legal framework, an essential for pharmaceutical industry. The most promising fact about India is a 70 million middle class population with good consumption power 

 

SCOPE AND IMPORTANCE

 

Over Ov er the ye years ars ph pharm armacy acy ha has s grown grown in the form form of ph pharm armace aceuti utical cals s sci scien ences ces throu through gh research and development processes. It is related to product as well as to services. The various drugs discovered and developed are its products and the healthcare it provides comes under the category of services.

 

Ph Pharm armacy acy involv involves es all the stage stages s that that are as assoc sociat iated ed with with the dr drugs ugs i.e i.e.. disco discover very, y, development, developm ent, action, safety, formulation formulation,, use, quality control, packaging, storage, marketing, 3

 

etc. This profession has a large socio-economic relevance to the Indian economy. In India this sector is among the future economy drivers. It is committed to deliver high quality drugs and formulations at an affordable price, so that majority of people can afford them.  

This profession has a large socio-economic relevance to the Indian economy. In India this sector is among the future economy

drivers. It is committed to deliver high quality drugs and

fo formu rmulat latio ions ns at an afford affordabl able e pri price, ce, so tha thatt maj majori ority ty of pe peopl ople e can af affor ford d them. them. The The transformation of the sector from conventional pharmacy to drug experts, which is both desired desi red and necessary necessary to reach reach the global standar standards, ds, has already made comm commend endable able progress.  

Liberalization, privatization and globalization (LPG) have helped the Indian pharmaceutical companies to achieve international recognition. It's remarkable to note that today several Indian pharma companies are approved by US FDA and are listed at NASDAQ

 

The multibillion-dollar multibillion-dollar pharma industry grows mainly through knowledge wealth creation. This sector has transformed a lot over the years. The big pharma companies that were there about 15-20 years back are not in picture these  days.



The analysis of Indian pharmaceutical sector shows that the innovative products, product life cycle management and marketing management steps taken by the pharma companies have led them to flourish. And the companies that refused to change their strategy lost the race. Cipla and Sun Pharma are two companies that are focused on new product development and have grown tremendously.

Top players in pharma industry 





Ranbaxy Laboratories Limited  is the biggest pharmaceutical manufacturing company in India. The company is ranked at the 8th position among the global generic pharmaceutical companies and has presence in 48 countries including world class manufacturing facilities in 10 countries and serves to customers from over 125 countries. Ranbaxy Laboratories 20092010 Q3 Net Profit Results showed a profit of Rs 116.6 crore as compared to Rs 394.5 crore deficit, recorded during the corresponding period last fiscal.

Dr. Reddy's Laboratories manufactures and markets a wide range of pharmaceuticals both in India and abroad. The company has 60 active pharmaceutical ingredients to manufacture drugs, critical care products, diagnostic kits and biotechnology products. The company has 6 FDA plants that produce active pharma ingredients and 7 FDA inspected and ISO 9001 and ISO 14001 certified plants. Dr. Reddy's Q1 FY10 result shows the revenues of the company at Rs. 18,189 million which is up by 21%. During this quarter the company introduced 24 new generic products, applied for 22 new generic product registrations and filed 4 DMFs.

Cipla is an Indian pharmaceutical company renowned for the manufacture of low cost anti  AIDS drugs. The company's product range comprises of anthelmintics, anthelmintics, oncology, oncology, anti-

bacterials, bacterial s, cardiova cardiovascul scular ar drugs, drugs, antibiot antibiotics, ics, nutritio nutritional nal suppleme supplements, nts, anti-ulce anti-ulcerants rants,, antiantiasthm ast hmati atics cs an and d cortic corticost ostero eroids ids.. Cip Cipla la also also offers offers other other se servi rvices ces like like qu quali ality ty contro control, l, engineering, project appraisal, plant supply, consulting, commissioning and know-how 4

 

transfer, support. For the financial year 2008-09 the company registered an increase of 22% in sales and other income over the previous year.







Nicholas Piramal  is the second largest pharmaceutical healthcare company in India. The brands manufactured by the company include Gardenal, Ismo, Stemetil, Rejoint, Supradyn, Phensedyl and Haemaccel. Nicholas Piramal has entered into join ventures and alliances with several international international corporations like Cheissi, Italy; IVAX Corp; UK, F. Hoffmann-La Roc Ltd.,  Allergan Inc., Inc., USA etc.

Glaxo Smithkline (GSK)  is a United Kingdom based pharma company; it is the world's second largest pharmaceutical company. The company's portfolio of pharma products consist of central central nervous nervous syste system, m, respirato respiratory, ry, oncolog oncology, y, vaccines, vaccines, anti-inf anti-infectiv ectives es and gastrogastrointestinal/metabolic products among others. On November 2009, the FDA had announced thatt the H1N1 vaccin tha vaccine e manu manufac factu tured red by GSK GSK would would joi join n the list of the four va vacci ccines nes approved.

Zydus Cadila also known as Cadila Healthcare is an Indian pharmaceutical company located in Gujarat. The company's 1QFY2010 results show the net sales at Rs880.3cr which is higher  than the estimated Rs773cr. The net profit was Rs124.8cr which was increase of 39%; the increase was on account of higher sales and improvement in the OPM.

PHARMACEUTICAL PHARMACEUTICA L COMPANIES IN INDIA The government of India has recognized Pharmaceutical sector as an intellectual industry. Based on the projections regarding India's strengths in the area, investment base has been increased for future development of the sector. The industry over a period of 25 years have grown immensely and made progress in infrastructure, knowledge capital, and dynamic research and development strengths.

List of Pharmaceutical Companies

 Alembic Chemicals  Aurobindo Pharma Glenmark Pharmaceuticals Limited Lupin Pfizer India  India  Zandu Pharmaceuticals Ltd. Wyeth Limited, India  

Sun Pharmaceutical Ltd

  RECENT DEVELOPMENTS - PHA PHARMACEUTICALS RMACEUTICALS -Strides Arcolab plans to buy Chennai based Grandix -Changing patterns: Indian pharma sees better prospects in Europe now 5

 

-Reliance Life to give a shot at generic drug market  market   -Chronic diseases plus economic growth: Pharma sector gains

INDIA’S DOMESTIC PHARMACEUTICAL MARKET(12 Months ended January 2009)

Cootm T alpPahnayrma Market Cipla Ranbaxy Glaxo Smithkline Piramal Healthcare Zydus Cadila Source: ORG IMS

S 6.i9ze ($ Billion) .36 .34 .29 .27 .24

M 10a0r.k0et Share (%) 5.3 5.0 4.3 3.9 3.6

G.r9owth Rate (%) 9 13.4 11.5 -1.2 11.7 6.8

FUTURE SCENERIO With several companies slated to make investments in India, the future scenario of the pharmaceutical industry in looks pretty promising. The country's pharmaceutical industry has tremendous potential of growth considering all the projects that are in the pipeline. Some of  the future initiatives are: 

 









 According to a study by FICCI-Ernst & Young India will open a probable US$ 8 billion market for MNCs selling expensive drugs by 2015 The study also says that the domestic pharma market is likely to reach US$ 20 billion by 2015 The Minister of Commerce estimates that US$ 6.31 billion will be invested in the domestic pharmaceutical pharmaceu tical sector  Public spending on healthcare healthcare is likely to raise from 7 per cent of GDP in 2007 to 13 per cent of GDP by 2015 Dr Reddy's Laboratories has tied up with GlaxoSmithKline to develop and market generics and formulations in upcoming markets overseas Lupin, a Mumbai based pharmaceutical company company is looking to tap opportunities of about US$ 200 million in the US oral contraceptives market Due to the low cost of R&D, the Indian pharmaceutical off-shoring industry is designated to turn out to be a US$ 2.5 billion opportunity by 2012

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 ARTICLES BOOMING PHARMA SECTOR IN INDIA  April 2010 Pharmaceuticals has emerged as one of the leading industries in the Indian Inc., with the domestic market showing an unprecedented growth of around 9% to generate revenue of about INR 554.5 Billion (US$ 11.1 Billion) in FY 2009. This dramatic growth in the Indian pharmaceutical pharmac eutical industry can be attributed to several factors such as growing middle class population, rapid urbanization, increase in lifestyle-related diseases and acceptance of health insurance. Besides, the product patent regime has provided ample support to the industry to sustain its growth pace despite the global economic downturn. Generic is emerging as one of the leading segments to be benefited by many drugs going off-patent in due course of time.  According to our new research research report “Booming Pharma Sector in India ”, the Indian pharmaceutical industry is projected to show double-digit growth in near future owing to rise in pharmaceutical outsourcing and consolidation of highly fragmented industry. As exports form major part of the pharmaceutical industry in India, leading players have started expanding their reach towards the West. Thanks to investments in R&D and thriving for more and more ANDA filings, the clinical trials market is expected to grow at blistering pace in coming years. To support this evidence, we have done an extensive research and analysis of various segments of the Indian pharmaceutical market. These segments include: Domestic & Export Market, Branded & Generics Drugs, Formulations Formulatio ns & Bulk Drugs, etc. The baseline for optimistic future outlook of the pharmaceutical market is improvement in access to medicines of Indian population. Emerging sectors like biogenerics and pharma packaging packagin g will also pave(FY the 2010way forFY the pharmaceutical market to continue its upward trend over the forecast period 2013). The report provides thorough statistical and analytical overview of the Indian pharmaceutical market. It contains information about past, present and future trends, with focus on entire structure, composition and working of the pharmaceutical pharmaceutical market. The report extensively discusses opportunities and challenges expected to arise within and outside the pharmaceutical market. The report also analyzes emerging sectors, regulatory environment and distribution system to identify strength and weaknesses of the pharmaceutical market. It has thoroughly examined current market trends, industrial developments and competitive landscape to enable clients understand the market structure and its progress in coming years. It also gives a brief overview of demographics and healthcare profile to adjudge the pharmaceutical market in terms of demand, expenditure and possible future direction.

Source : htp://www.rncos.com/Repor/IM131.hm

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India to be Among Top 10 Drug Producers by 2020  Apr 30, 2010

 

The flourishing Indian drug market needs to concentrate on product counterfeiting and more spending on healthcare systems to enjoy a bright future ahead.  According to Pricewaterhou PricewaterhouseCoopers seCoopers (PwC), (PwC), India is expected expected to be in in the league league of 10 leading leading drug markets in coming ten years. It is likely to be worth at least US$50 Billion (Rs2.2 Trillion), as per the news published by Livemint. Livemint . Indian drug manufacturers are expected to become contender to global drug manufacturers in some spheres. They are also likely to become a potential partner in various other segments like clinical trials, drug research, and contract manufacturing. India possesses a significant expertise in contract manufacturing and leads in the manufacture of generic or off-patent vaccines and drugs, and this is the major reason for such a remarkable growth. Over 20% of world’s generics are produced in India. Drugs worth nearly US$ 70 Billion are likely to go off patent in the USA, offering India a chance to manufacture a considerable share of the products to exploit the ensuing generics opportunity. Foreign players are also expected to increasingly discover investment opportunities in the country in establishing research centres, outsourcing production services, and authorizing products and technologies. In manufacturing, pharmaceutical firms are strengthening bonds with Indian players to serve the world markets via marketing alliances like the joint venture of Dr Reddy’s Laboratories Ltd and Glaxo SmithKline Plc in 2009. Growth is also expected in the pharma export market besides domestic market. According to a market research report titled “Booming “Booming Pharma Sector in India” India ” by RNCOS, RNCOS, from an estimated Rs.244 Billion (US$ 5.48 Billion) in 2009-10, pharma exports will arrive at Rs. 593 Billion (US$ 13.31 Billion) by 20112012. The report also reveals that due to the implementation of severe price control norms in the Indian drug market that are encouraging drugmakers to exports so as to harvest better margins and growth in generics, mainly in the US, Europe and Japan, the pharma exports are likely to grow  According to a Research Analyst Analyst at RNCOS, RNCOS, “The Indian drug market has a dazzling future. However, still there are some constraints in the market, and the presence of fake drugs is one of them. This constraint may smudge the reputation of India as a quality drug manufacturer. The sector’s growth is also hindered by the lack of government initiative to spend on healthcare systems. So to experience a glittery future, India has to work a lot on overcoming these obstacles.” Source : http://www.rncos.com/Blog/2010/04/India-to-be-Among-Top-10-Drug-Producers-by-2020.html

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Source : [email protected]

Conclusion :Thus this is the industry report of the Indian Pharmaceutical Industry and its various contributions towards the pharmaceutical industry of some of the companies in India.

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