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Pharma Industry in India:
Pharma as a sector adds huge revenue to the GDP of India as well as of the world.
A highly organized sector, the Indian pharmaceutical industry is estimated to be worth $4.5 billion and is growing at about 8% to 9% every year. The pharma industry in India ranks very very high in the third world countries, in terms of technology, quality and range of medicines manufactured.
Globally the Indian pharmaceutical industry ranks fourth in terms of volume (with an 8% share in global sales), 13th in terms of value (with a share of 1% in global sales) and produces 20% to 24% of the world's generic drugs (in terms of value). The Indian pharmaceutical sector is highly fragmented. It has more than 20,000 registered units and faces severe price competition along with government price control. This price competition is a boon for importers or customers from other countries as they get the quality medicines at a much lower cost.
The Pharma industry has grown exponentially in the last two decades. As many as 250 leading pharmaceutical companies control over 70% of the market, with the market leader holding nearly 7% of the market share. India is emerging as the global hub for contract research and manufacturing services due to a combination of low-cost and world-class quality standards.
With Pharma majors facing increased pressure on profit margins, spiralling R&D costs and rising overheads, outsourcing of clinical research processes to third parties in developing countries seems a viable option. By contracting such work to India, they save 40% to 60% in new drug development. Consumer spending on healthcare went up from 4% of GDP in 1995 to 7% in 2007. That number is expected to rise to 13% of GDP by 2015.
Major Players in the Industry:
Two types of companies exist in the Indian pharmaceutical sector: companies of Indian origin (domestic) and foreign MNCs.
Table (I) lists the rankings of the major players based on their sales figures. GlaxoSmithKline, Cipla, Dr. Reddy's Laboratories, and Ranbaxy are the top four companies in terms of gross sales.
Other companies' sales values are very similar, and the rankings can change with time. The top MNCs with a presence in India are Glaxo-SmithKline, Hoechst Marion Roussel, Knoll Pharma, and Pfizer. Approximately 20,000 pharmaceutical units exist in India. Ranbaxy, the leading domestic company, reported sales of Rs. 1745.9 crores ($356.3 million, assuming that $1.00 Rs 49) during 2000. Glen mark Pharmaceuticals, Cadila Healthcare, Ajanta Pharma, and Elder Pharmaceuticals are among other upcoming companies. According to the research 80% of the formulations produced are consumed indigenously, whereas the majority of the bulk drugs manufactured are exported. Table (II) lists the top 10 countries to which India exports drugs and pharmaceuticals. The ranking is based on the export figures of 1999-2000. Russia and the United States are the top two importers of bulk drugs and pharmaceuticals from India ($100.7 million and $137.9 million, respectively). However, countries such as Brazil, Singapore, and Iran experienced a tremendous growth in the import of pharmaceuticals from India in recent years
|Table I||Table II|