The Indian pharmaceutical industry is a success story
providing employment for millions and ensuring that essential drugs
at affordable prices are available to the vast population of this
The Indian Pharmaceutical Industry
today is in the front
rank of Indias science-based industries with wide ranging
capabilities in the complex field of drug manufacture and
technology. A highly organized sector, the Indian Pharma Industry is
estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent
annually. It ranks very high in the third world, in terms of
technology, quality and range of medicines manufactured. From simple
headache pills to sophisticated antibiotics and complex cardiac
compounds, almost every type of medicine is now made indigenously.
Playing a key role in promoting and sustaining development in the
vital field of medicines, Indian Pharma Industry
quality producers and many units approved by regulatory authorities
in USA and UK. International companies associated with this sector
have stimulated, assisted and spearheaded this dynamic development
in the past 53 years and helped to put India on the pharmaceutical
map of the world.
The Indian Pharmaceutical sector is highly fragmented with more
than 20, 000 registered units. It has expanded drastically in the
last two decades. The leading 250 pharmaceutical companies control
70% of the market with market leader holding nearly 7% of the market
share. It is an extremely fragmented market with severe price
competition and government price control.
The pharmaceutical industry in India meets around 70% of the
country's demand for bulk drugs, drug intermediates, pharmaceutical
formulations, chemicals, tablets, capsules, orals and injectibles.
There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India
(including 5 Central Public Sector Units). These units produce the
complete range of pharmaceutical formulations, i.e., medicines ready
for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of
Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs and pharmaceutical
products has been done away with. Manufacturers are free to produce
any drug duly approved by the Drug Control Authority.
Technologically strong and totally self-reliant, the pharmaceutical
industry in India has low costs of production, low R&D costs, innovative scientific manpower, strength of national laboratories
and an increasing balance of trade. The Pharmaceutical Industry, with its rich scientific talents and research capabilities, supported by Intellectual Property Protection regime is well set to
take on the international market.
India has a pool of personnel with high
managerial and technical competence as also skilled workforce. It
has an educated work force and English is commonly used.
Professional services are easily available.
Cost-effective chemical synthesis:
Its track record of
development, particularly in the area of improved cost-beneficial
chemical synthesis for various drug molecules is excellent. It
provides a wide variety of bulk drugs and exports sophisticated bulk
Legal & Financial Framework:
India has a 53 year old
democracyand hence has a solid legal framework and strong financial
markets. There is already an established international industry and
Information & Technology:
It has a good network of
world-class educational institutions and established strengths in
The country is committed to a free market
economy and globalization. Above all, it has a 70 million middle
class market, which is continuously growing.
For the first time in many years, the
international pharmaceutical industry is finding great opportunities
in India. The process of consolidation, which has become a
generalized phenomenon in the world pharmaceutical industry, has
started taking place in India.
THE GROWTH SCENARIO
India's US$ 3.1 billion pharmaceutical industry is growing at the
rate of 14 percent per year. It is one of the largest and most
advanced among the developing countries.
Over 20, 000 registered pharmaceutical manufacturers exist in the
country. The domestic pharmaceuticals industry output is expected to
exceed Rs260 billion in the financial year 2002, which accounts for
merely 1.3% of the global pharmaceutical sector. Of this, bulk drugs
will account for Rs 54 bn (21%) and formulations, the remaining Rs
210 bn (79%). In financial year 2001, imports were Rs 20 bn while
exports were Rs87 bn.
STEPS TO STRENGTHEN THE INDUSTRY
Indian companies need to attain the right product-mix for sustained
future growth. Core competencies will play an important role in
determining the future of many Indian pharmaceutical companies in
the post product-patent regime after 2005. Indian companies, in an
effort to consolidate their position, will have to increasingly look
at merger and acquisition options of either companies or products.
This would help them to offset loss of new product options, improve
their R&D efforts and improve distribution to penetrate markets.
Research and development has always taken the back seat amongst
Indian pharmaceutical companies. In order to stay competitive in the
future, Indian companies will have to refocus and invest heavily in
The Indian pharmaceutical industry also needs to take advantage of
the recent advances in biotechnology and information technology. The
future of the industry will be determined by how well it markets its
products to several regions and distributes risks, its forward and
backward integration capabilities, its R&D, its consolidation
through mergers and acquisitions, co-marketing and licensing