Report Summary

The Indian Pharmaceutical Industry (IPI), estimated at US$ 9 bn, has grown at a CAGR of 7% during the last six years. It is ranked 4th in volume terms and 11th in value terms globally. India¡¯s share in the global pharmaceutical market is less than 2% in value terms as drug prices in India are one of the lowest in the world. Exports contributed to more than half of IPI¡¯s turnover during 2005-06 and have been a major growth driver for the industry growing at a CAGR of 19% during the last six years.

The playing field for the domestic pharmaceutical companies changed completely with the advent of product patent regime from January 2005. The IPI is now exposed to a host of new opportunities and risks. This has led the domestic pharmaceutical companies to pursue various strategies on the business and R&D front with the aim of achieving long-term sustainable growth under the new regulatory regime. Besides changes in the patent laws, the issues with respect to drug pricing and the Union Pharmaceutical policy will shape the regulatory environment for the industry in future.

The changing dynamics of the global pharmaceutical industry especially that of the regulated markets like USA and Europe have presented a number of opportunities for IPI to capitalize on. Some of the major concerns facing the global pharmaceutical industry are higher healthcare costs, competition from generics, patent expiries of blockbuster drugs, drying R&D pipelines and increasing R&D costs. These translate into a significant growth opportunity for IPI in the form of exports of generics to regulated markets and contract manufacturing/ research for global pharmaceutical companies.

CARE Research has in its report on the Indian Pharmaceutical Industry developed an IPI Value Road which enlists the various value opportunities for growth of Indian pharmaceutical companies. The IPI Value Road attempts to establish a growth path for Indian pharmaceutical companies by identifying six growth segments in increasing order of perceived value that can be generated by following strategies focused on a particular segment. The segments identified are bulk-drugs, domestic formulations, exports to non regulated markets, CRAMS, exports to regulated markets and NCE research. The various strategies adopted by Indian pharmaceutical companies focusing on each of the six segments are then identified and explained. The top-28 Indian pharmaceutical companies are classified based on their current orientation vis-¨¤-vis the value road. These companies are mapped according to their current and future focus segments on the value road which are likely to shape their growth in the near to medium term.

CARE Research believes that the growth of the Indian pharmaceutical companies in the domestic market get restricted with the MNCs introducing newer patented drugs in the country. Under this scenario, the growth for the formulation companies is likely to come from the generics opportunity in the regulated markets and geographic expansion in the semi/non regulated markets. The value of drugs going off-patent in regulated markets is estimated at US$ 70-80 bn during the next five years and this represents a huge opportunity for Indian pharmaceutical companies to establish their presence in these markets. Pricing pressure in the regulated markets, high litigation expenses and counter strategies followed by innovator companies are factors that could dampen the growth of Indian pharmaceutical companies pursuing the generic opportunity.

The recognition of product patent has provided global companies with better IPR protection and as a result has opened up a new segment for the IPI in Contract Research and Manufacturing Services (CRAMS). IPI is well-positioned to take advantage of this opportunity with world class manufacturing facilities adhering to various regulatory standards, large pool of skilled manpower and cheaper cost of production.

The investment in R&D is also on the rise as it has become important for Indian companies to start innovating new drugs in order to ensure long term sustainable growth and remain competitive at the global level. Indian companies have invested in New Chemical Entity (NCE) research and are scouting for global partners for pursuing collaborative research. The availability of large patient base, skilled manpower and lower costs of carrying out clinical trials has made India a favourable destination for R&D outsourcing.

Report Outline

1. The Global Pharmaceutical Market: An Overview
1.1 Market size & growth
1.2 Geographic distribution
1.3 Leading therapy classes and top selling drugs
1.4 Leading global pharmaceutical companies

2. The Indian Pharmaceutical Industry: An Overview
2.1 Market size & growth trends
2.2 Exports
2.3 Leading therapeutic segments
2.4 Top Indian pharmaceutical companies

3. Indian Pharmaceutical Industry: Structure & classification
3.1 Size
3.2 Products
3.3 Geographical presence

4. Indian Pharmaceutical Market: A Profile
4.1 Demographics & health indicators
4.2 Disease profile
4.3 Healthcare spend by Indians

5. Indian Pharmaceutical Industry: Regulatory Framework
5.1 Indian Patents Act
5.2 WTO & TRIPS
5.3 The Government's Pharmaceutical policy
5.4 Pricing of drugs & DPCO
5.5 Quality control guidelines

6. Indian Pharmaceutical Industry Value Road

7. Business & R&D Strategies
7.1 Domestic formulations
7.2 Exports to Semi/Non regulated markets
7.3 Contract research & manufacturing services (CRAMS)
7.4 Exports to Regulated markets: The generics opportunity
7.5 R&D strategies

8. Strategic Mapping of Indian Pharmaceutical Companies

9. Company Overview
9.1 Ranbaxy Ltd.
9.2 Cipla Ltd.
9.3 Dr. Reddy's Laboratories Ltd.
9.4 Nicholas Piramal India Ltd.
9.5 Biocon Ltd.
9.6 Cadila Healthcare Ltd.
9.7 Matrix Laboratories Ltd.
9.8 Lupin Ltd.
9.9 Glenmark Pharmaceuticals Ltd.
9.10 Sun Pharamceutical Industries Ltd.

Tables

Table 1.1 Leading therapy classes of global pharmaceutical market
Table 1.2 World's top selling drugs
Table 1.3 Global top-10 pharma companies
Table 1.4 Patent expiry schedule of major blockbuster drugs in US 5-6
Table 2.1 India's leading pharmaceutical companies
Table 3.1 Number of companies & their size
Table 4.1 Selected Population Indicators
Table 4.2 Age-wise distribution of population of India
Table 7.1 Top-10 domestic formulations companies
Table 7.2 In-licensing deals by Indian pharma companies
Table 7.3 Contract manufacturing deals by Indian pharma companies
Table 7.4 Contract Research Organisations (CRO) in India
Table 7.5 Leading drugs that have went off-patent during 2006
Table 7.6 ANDA filings and approvals by Indian pharma companies
Table 7.7 R&D spends by Indian pharma companies as % of turnover
Table 7.8 IPI's NCE Pipeline
Table 7.9 Out-licensing deals struck by Indian pharma companies
Table 7.10 ANDA productivity on Indian & global generic companies

Figures

Figure 1.1 The Global Pharma Market
Figure 1.2 Geographic distribution of the global pharma market
Figure 2.1 Indian pharmaceutical industry growth trend
Figure 2.2 Indian pharmaceutical market growth trend
Figure 2.3 IPI Export trend
Figure 2.4 Leading therapeutic segments in Indian pharma market
Figure 3.1 IPI Value share 2004-05
Figure 3.2 Bulk drugs & formulations sales trend
Figure 3.3 IPI Export markets
Figure 3.4 Trend in exports to regulated and semi/non regulated markets
Figure 4.1 Disease profile of developing and developed countries
Figure 4.2 Break-up of healthcare payments in India
Figure 5.1 Evolution of regulatory framework in IPI
Figure 6.1 The IPI Value Road
Figure 7.1 IPI Strategies
Figure 7.2 IPI exports to semi and non regulated markets in 2004-05
Figure 7.3 CRAMS & advantage India
Figure 7.4 Patent expiry trend in US pharmaceutical market
Figure 7.5 No. of ANDA filings by IPI
Figure 7.6 DMF filings by IPI
Figure 7.7 Trend in Relative price of a generic drug with respect to no. of new entrants
Figure 7.8 R&D expenditure by IPI
Figure 7.9 NCE Journey - Discovery & development
Figure 7.10 Cost of NCE development
Figure 8.1 IPI Strategic mapping