The Indian Pharmaceutical Industry: New Strategies in a Changing World
16.07.2010
Dublin - Research and Markets (http://www.researchandmarkets.com/research/536047/the-indian-pharmac) has announced the addition of the "The Indian Pharmaceutical Industry: New Strategies in a Changing World" report to their offering.
The days when the Indian pharmaceutical industry was synonymous with cheap generic drug production are passing. While generics continue to play a major part in the industrys success, many companies have started down the long road of drug discovery, novel product development and pharma services.
With high-quality research, low-cost manufacturing facilities and educated personnel, the Indian pharmaceutical industry presents both a competitive threat and partnering opportunities.
A significant international industry
India is the worlds fourth largest producer of pharmaceuticals by volume, accounting for around 8% of global production. In value terms, production accounts for around 1.5% of the world total. The Indian pharmaceutical industry directly employs around 500,000 people and is highly fragmented. While there are around 270 large R&D based pharmaceutical companies in India, including multinationals, government-owned and private companies, there are also around 5,600 smaller licensed generics manufacturers, although in reality only around 3,000 companies are involved in pharmaceutical production. Most small firms do not have their own production facilities, but operate using the spare capacity of other drug manufacturers.
A new approach
The advent of pharmaceutical product patent recognition in January 2005 changed the ground rules for Indian companies. In the run up to the new post-patent era and since, the Indian industry has been evolving. R&D departments are moving away from reverse-engineering in favour of developing novel drug delivery systems and discovery research. It is anticipated that the experience of selling generics in the international market will hold Indian companies in good stead for selling their own branded products to these markets in the future.
Focus on...current and future markets
The dynamics of the domestic Indian market have always encouraged Indian industry to pursue overseas lines of business. Expansion comes at a cost and some companies have had to restructure. In June 2009, Wockhardt divested its German business, esparma and more recently, in March 2010, Orchid sold its generic injectable formulations business to Hospira but came out of the deal with a long term supply agreement for its APIs.
INDIA
India remains an important market for the vast majority of Indian companies. The indigenous industry supplies around 70% of the countrys pharmaceuticals. The proportion of revenue derived from India depends largely on the strategy of the individual company and its penetration into overseas markets. For example, while Zydus Cadila aims to grow rapidly overseas, India remains its most important market, accounting for 55.8% of revenue in fiscal 2008/09. India is also Ciplas key market, generating almost half of the companys revenue in 2008/09, although this percentage has been declining in recent years as the company has increasingly targeted overseas markets. Other companies, such as Dr. Reddys, are less reliant on the Indian market; in 2008/09, India contributed just 17% of the companys global revenue.
INTERNATIONAL DEVELOPMENT:
The attractive opportunities offered by the loss of patent protection on several major products in the coming period, and resolution of the biosimilar regulatory issue in the US, has to be offset against price reduction pressures driven by the ongoing economic downturn and aggressive competition for the business that is on offer.
USA: The largest generic market and the most sought after target for Indian companies involved in the generic business, is the US. As more companies gained the expertise to file for FDA approval, the number of ANDAs approved increased dramatically. In 2005, the number increased to 52 and subsequently increased year-on-year, to reach 132 in 2008. In 2009, the total number of ANDA approvals was 125. In the first quarter of 2010, a further 20 were approved.
UK: Over 80% of prescriptions in the mature UK market are written generically. The UK has always been a focus for Indian companies with 9 companies running 11 manufacturing sites. Between January 2009 and January 2010, Indian companies had more than 260 marketing authorisations approved by the UKs Medicines and Healthcare Regulatory Agency (MHRA) for a wide range of products. During this period, Ranbaxy received 55 approvals; Dr. Reddys received 54; Aurobindo received 39; and, Lupin received 25.
Europe: Beyond the UK and Germany, significant European markets have been slow to adopt a vigorous generics drugs policy. However, pressure on governments to cut costs in the face of burgeoning drugs bills and economic recession, are seeing countries such as France, Italy and Spain exploring the increased use of generics. A number of Indian companies are either monitoring them from the sidelines or have already identified growth potential; Ranbaxy, for example is established in France, Germany, Italy and Spain.
For more information visit http://www.researchandmarkets.com/research/536047/the-indian-pharmac
Source: Espicom Business Intelligence Ltd
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