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Pharmaceutical Market Overview
The global pharmaceutical market was estimated at USD 700
billion in 2007 and is expected to grow at6% CAGR1 to reach USD 937
billion in 2012. Generic drugs constituted USD 92 billion of
global
pharmaceutical sales and is expected to grow at 11% CAGR to
reach USD 155 billion in 2012.
The Indian pharmaceutical industry is ranked 4th in the world in
terms of production volume and 13th interms of domestic consumption
value. The Indian pharmaceutical market is expected to grow from
USD13 billion in FY 20072 to USD 34 billion in FY 2012. The key
drivers for this growth are expected to beincreased per capita
spend on pharmaceuticals, improved medical infrastructure, greater
healthinsurance penetration and shift in disease profiles.
3.7
9.4
4.4
0.9
2001-02 2006-07
API & Intermediates
Formulations (Generics + Patented)
CAGR (FY02-FY07)
20%5 13
33%
16%
Today the Indian pharmaceutical sector meets 95% of the countrys
medical needs. The domesticpharmaceutical industry has evolved from
being purely reverse engineering focused to being researchdriven,
export oriented and globally competitive.
The Indian pharmaceutical industry consists of both domestic
companies and subsidiaries ofmultinational corporations. Indian
companies manufacture a wide range of generic drugs (branded
andnon-branded), intermediates and bulk drugs/Active Pharmaceutical
Ingredients (API). However genericdrugs continue to remain the
mainstay of the industry.
Recently, Indian pharmaceutical companies have been scaling up
their presence in other businesssegments such as drug discovery
& development, contract research & manufacturing and are
focusingon developing competencies in several areas of the
pharmaceutical value chain.
1Compounded Annual Growth Rate
2FY 2007 - Financial Year, Apr 1
st2006 to Mar 31
st2007
Indian Pharmaceutical Industry (US $Billion)
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Indian Formulations Industry
Formulations are broadly categorized into patented drugs and
generic drugs. A patented drug is aninnovative formulation that is
patented for a period of time (usually 20 years) from the date of
its
approval. A generic drug is a copy of an expired patented drug
that is similar in dosage, safety, strength,method of consumption,
performance and intended use.
The Indian formulations market was estimated to be USD 9.4
billion in FY 2007 comprising of domesticconsumption of USD 6.2
billion and exports of USD 3.2 billion. The formulations market is
expected togrow at 17% CAGR to reach USD 21 billion in FY 2012.
Nearly 97% of Indias drug market in volumeterms consists of
second-and-third generation drugs no longer subject to patent
protection in thedeveloped world.
Over the last 30 years, Indias pharmaceutical industry has
evolved from being a marginal global playerto becoming a world
leader in the production of high quality generic drugs. India
exports pharmaceuticalproducts to more than 200 countries,
primarily the United States, Russia, China and the United
Kingdom. Indias single largest export market continues to be the
United States, which is the worldslargest generic drug market.
Generic drugs are 40-75% lower in costs as compared to patented
drugs. Low production costs giveIndia an edge over other
generics-producing nations. In recent years, Indian pharmaceutical
companieshave invested substantial part (about 30%) of their total
global investment in generic manufacturingcapacity. Indian firms
now account for over 35% of Drug Master File (DMF) applications and
25% of allUS Abbreviated New Drug Application (ANDA) filings
submitted to the FDA. These filings give Indiangeneric companies an
advantage over other generic producing nations. India also has the
largest
number of US FDA approved manufacturing sites outside the
US.
Russia
12%
Brazil
7%
USA30%China
8%Nigeria
5%
UK
9%
Others
29%
Exports by Region (2005)
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Company Principal products: API and generic drugs Percent of
sales
Ranbaxy Labs Anti-infectives, cardiovascular, gastrointestinal,
central nervous API: 22%,
(diazepam , m idazolan), ophthalm ic & ointm ents,
urologicals, nutritionals, Generic: 78%
sex hormones, analgesics, anti-asthma, cough & cold,
vaccines.
Dr. Reddys Cardiovascular, gastrointestinal, anti-infectives,
pain management API: 40%Generic: 60%
Cipla Antibiotics, anti-asthmatics, anti-AIDs and TB drugs,
anabolic steroids, API 7%,
analgesics-antipyretics, antacids, anti -arthri tis, ant i-
inflammatory, anticancer, Gener ic : 93%
antidepressant agents, anti-diabetic, anit-epileptic,
anti-fungal,
anti-malarial.
Wockhardt Anti-infectives, pain management, nutraceuticals API :
19%
Generic: 81%
Pfizer India Nutritionals, cough syrup, anti-arthritis,
anti-infectives, cardiovascular Generic: 100%
Sun Pharm a Neuro-psychiatry, cardiovascular, gastrointestinal,
diabetic, gynecological, API: 18%
anti-a llergic , antidepressants, cholesterol reducers, anti
-asthma, Parkinson, Gener ic : 82%
ADD, pain.
GSK Anti-infective, anti-inflammatory, analgesic,
gastro-enterological, antiallergic, Generic: 100%
dermatological.
Lupin Tuberculosis medication, antibiotics, cardiovascular.
Generic: 100%
Cadila Cardiovascular, gastrointestinal,
anti-inflammatory/analgesic, Generic: 100%
antibiotics/anti-infectives, vaccines/immunomodulators,
anti-diabetics;
vitamins.Nicholas Piram al Analgesics-anti-inflam matory,
antibiotics, antifungal, antihistam ines, Generic: 100%
antiseptics, cardiovascular, central nervous system, diabetic,
dermatologic,
endocrinologic, gastro-enterological, vitamins,
pulmonary-respiratory,
trauma-emergency, gastrointestinal, NSAIDs.
Aurobindo Antibiotics, anti-retrovirals, cardiovascular, central
nervous system, gastroenterological, Generic: 100%
Pharmaceuticals anti-allergy.
The vast majority of Indias pharmaceutical companies are small
by global standards with revenuesless than USD 5 million. The
formulations industry is highly fragmented with ~400 units in the
organizedsector and ~15,000 units in the unorganized sector. The
industry has a range of over 100,000 drugsspanning various
therapeutic segments. Indian companies dominate the formulations
market - 7 out ofthe top 10 players are Indian. The top 5 companies
in formulations (Glaxo SmithKline, Ranbaxy, Cipla,Nicholas Piramal
and Zydus Cadila) account for over 23% of the domestic formulations
market.
In geographic terms, manufacturing operations are largely
concentrated in West and South India.However, some players have
shifted manufacturing base to excise free zones in the North due to
shifttowards MRP (maximum retail price)-based excise duty levy.
In India, approximately 71% of the total formulations sold are
for acute illness (short duration) andremaining for chronic illness
(prolonged duration). This is true for most developing countries
ascompared to developed markets where the growth is led by chronic
ailments.
Therapeutic segments FY 2005 FY 2006 FY 2007 CAGR %
Anti-infectives 36.9 43.7 49.7 16.0Gastrointestinal 23.1 27.1
30.5 15.0
Cardio Vascular 21.7 25.3 28.2 14.0
Pain/Analgesics 19.6 21.4 26.3 15.7
Respiratory 20.2 22.9 25.8 13.1
Vitamins/Nutrients 19.5 21.7 23.8 10.7
Dermatology 11.4 13.2 15.5 16.8
Gynaecological 11.9 13.4 15.2 13.1
Central nervous system 10.9 13.3 15.0 17.5
Anti-diabetic 9.0 10.6 12.5 17.9
Top 10 Therapeutic Categories 184.1 212.6 242.7 14.8
Total Domestic Formulation Demand 212.7 244.4 279.0 14.5
Leading Therapeutic segments in India by Sales (Rs. Billion)
Principal products of Indias leading drug manufacturers
