* Highly Regulated: The industry faces Price, Quality & Patent regulation. * Research Oriented: Highly research driven, regularly invents NDDS (Novel Drug Delivery System) along with new molecules & innovative production process. * Low Price Elasticity: Consumers less sensitive to price movements for most drugs * Limited Customer Choice: Consumers are not decision makers, Doctors & Medical Representatives play major role. * Highly Dependent on The Development of Health Infrastructure: Hospitals, health facilities, medical practitioners plays a key role in driving consumption. * Estimated $700 bn. in 2007.
* Growth rate 6% in CAGR.
* Expected to reach $937 bn. in 2012.
Key Issues of Indian Pharmaceutical Industry:
The Indian pharmaceutical industry is estimated to have over 10,000 manufacturing units, as given by the Organisation of Pharmaceutical Producers of India. ORGANISED SECTOR | UNORGANISED SECTOR |
5% of the industry | 95% of the industry |
65% of industry turnover | 35% of industry turnover |
19% turnover from MNC.81% turnover from Indian Companies. | |
Price Erosion in Indian Generics is due to:
* Price control imposed by government
* Rise in number of domestic players
National List of Essential Medicines - (NLEM) lists 354 Drugs under cost based price control by National Pharmaceutical Policy 2006. The field of discovery and developments of New Chemical Entity (NCEs) had more misses than hits. Very few discoveries reach the final stages of approvals, and in most of the cases the claim for patent gets stuck in legal battles. Indian Companies spend 4% of Sales on R&D, where the Global practice is of 12-16%. Leading Indian Pharmaceutical companies have been actively extending the frontiers of scientific knowledge & going global...