11.09.2020
India commands an important position in the global pharmaceuticals sector. India also has large pool of scientists and engineers who have the potential to steer the industry ahead to an even higher level. Size of Indian pharmaceutical sector = $50 billion.Out of the total market size of $50 billion, the export market for Indian pharma industry is around $17 billion. In terms of Indian rupees, it is about Rs 1.2 lakh crore.
As far as the global market is concerned, India manufacturers around 20% of the total drugs manufactured all over the world according to the volume not by size. India stands at 3rd position globally by volume. But when consider the ranking in terms of value, Indian pharmaceuticals market is at 10th rank. Overall Global market is more than $1.2 Trillion and currently India is contributing around 3%-4% in the global market. There is big opportunity for India to grow in the overall global footprint.
Indian pharma sector in India is largely dependent on the Generic drugs. Main problem with pharma industry in India, that Indian pharma industry companies mainly focus on manufacturing the generic drugs only. The Indian companies generally do not allocate /spends much funds for R&D domain as well as generating the Patents etc. This is the general development trend of generic business in Indian pharma companies. India is the largest provider of generic drugs globally. Indian pharmaceutical sector industry supplies over 50% of global demand for various vaccines. 40% of generic demand in the US and 25% of all medicine in UK.
Almost 50% of the total $17 billion exports from India is going to the US market. Total generic drug market of US is around $80 billion. And India’s contribution by value is almost $8 billion and 30% by volume in US generic drug market.
Pressure of USFDA actions on India pharmaceutical industry. US healthcare regulator-US food and Drug administration-USFDA is conducting the inspections of manufacturing plants of pharma sector companies in India. From last 2-3 years USFDA has given lot of observations conducted at the Indian pharma plants in India. A lot of action has been by the USFDA. USFDA will not give the license to the Indian pharma companies for the new production until and unless all its conditions is not fulfilled by these Indian pharmaceutical companies. Many Indian pharma companies like Sun Pharma, Lupin, Cipla has faced such problems because of the number of faults found out in the quality checks performed by USFDA. Indian pharma industry facing this pressure of actions taken by USFDA.
Indian government has lot of focus on Healthcare sector. Pricing control is a very important factor in the process of making of the reforms by the Indian government. The same thing was executed by the government earlier in the Realty sector. These steps are right from government’s point of view. But, from the investors point of view, these pricing control majors taken by government may affect adversely to the investors profit margins. Indian government has already priced down the generic drugs and increased the generic drugs promotion.
There is a scarcity of trained human resource required by the Pharmaceutical sector in India currently.The quality of Medical Representatives – MRs of the pharma companies has down quality of working as feedback given by Indian doctors. Many pharma companies has been employing a cost cutting strategy for the training given to these MRs.As a result, the quality of human resource in Indian pharma companies is down graded now and it is affecting directly to the sales numbers of the pharma companies.
Many Indian companies are in the race to create generic versions of biologic drugs or biosimilars which are far more complex to make but offer a large global opportunity. There are around 25 Indian companies operating in the biosimilar space, marketing close to 50 products in the Indian market. Today Indian patients have access to some of the biosimilars like Insulins, Insulin analogues, Filgrastim. This early experience with developing biosimilars is paving the way for Indian players to capitalize on the unfolding global opportunity.
The Global biosimilars market in 2020 is projected to be between $25 billion and $35 billion. Biosimilars are very heavy resource investment business. Given the level of investments are long gestation period. Indian companies decided to reposition Indian biotech business and shift focus towards business development and licensing based model, rather than organic manufacturing and development model. As a dynamic sector, there are both interesting and challenging times for the pharmaceutical industry. There has been a shift from infectious diseases to non communicable diseases are populations are aging and lifestyles and habits are changing. Companies will need to align their product portfolio in this direction. Conversation with Cipla and Abbott India experts: Cancer and diabetes are spoken about a lot but not respiratory.
India has made considerable progress in healthcare outcomes over the past few decades. The average life expectancy of Indians have risen from 58 years in 1990 to 66 years in 2013. There is much work to be done in terms of improving healthcare access to citizens of India. Indian pharmaceutical companies are now investing on research and development. Now Indian companies spend about 8% of sales in R&D efforts. What is also importance is the move from creating medicine to creating holistic healthcare solutions that address the entire continuum of care. This is where technology and digital interventions play an important role. In India, where the doctor to patient ratio poses a challenge in order to serve patients better, pharma needs to collaborate with partners such as hospitals, devices and diagnostics companies so that Indian can integrate, optimize data and generate insights and interventions for better health outcomes for the patients.
Major driving factor for India pharmaceutical industry is the diversified portfolio that accounts for over 10% of global pharmaceutical production. Over 60,000 generic brands across 60 therapeutic categories and manufacturers more than 500 different APIs 35.7% of all drug master filings from India is registered in USA in 2015. Pharma industry is dominated by thousands of small and medium and large players. Most players will not be able to address quality and regulatory issues and therefore going forward, the industry will have a biomodal distribution. Based on players, highest expenditure based in R&D is done by Sun Pharma – $352 million, followed by Dr Reddy – $199 million, Cipla formed an exclusive partnership with Serum Institute of India to sell vaccines in South Africa. Dr Reddy’s accounted for the largest share in the Indian Pharma market, with sales of $2.2 billion in 2016 and Lupin being the second largest with sales of US$2.09 billion in 2016 in Indian pharma market.