A REPORT ON PHARMACEUTICAL INDUSTRY IN INDIA

By ,

Bashpika K Chirag S Malaviya

Nikul Thaker Govindu Ram Kashyap Shabeer Khan

Introduction

• The Indian Pharmaceutical industry is one of the best among science based industries with vast range of capabilities in the filed of drug manufacture and technology.

• It is estimated to be worth about US$ 10 billion and with the growth rate of 8-9%.

• The major players considered in the market are • Dr. Reddy’s lab• Cipla • Lupin • Ranbaxy • Aurobindo Pharmaceuticals

Contd..

• The department of Pharmaceuticals has organized “Pharma vision 2020”

• The drugs manufactured in India contribute around 70% of domestic use which include drugs, chemicals , tablets , capsules , orals and injecting ones remaining is charted by exports.

• They use intensive and highly augmented technology in manufacturing process due to which the medicines rates are comparatively low and they come with minimum side effects.

Current Scenario• Domestic:

• India is on the verge of making many new medicines and drugs in near future.

• Indian Pharmaceutical sector is expected to touch sales of 74 billion USD in 2020 in this highly competitive growth scenario.

• Global Pharmaceutical sector will reach USD 8 million by 2015• Domestic pharmaceutical sector will reach USD 20 million by 2015• India is also exporting medicines worth approx 11 billion.• Major factors for the growth rate of Indian medicines are increasing sales

of generic medicines and grater sales of rural in rural market.

Global Scenario

• The value of global market is expected to grow by 7-8%.

• The amount of GDP used by • different countries • Japan spends highest • amount i.e. 2.3% and U.K • and Luxemburg are least

with with 0.9 and 0.5%.

Technology and R&D

• R and D is the most important department in pharmaceutical industries. The top companies spend around Rs 2000 crores in R & D.

• Most of the companies profit is dependent on R & D innovations.

• Some companies try and improve their R & D by merging with companies which are strong in R &D. Ex: Cipla and Medpro

• The emergence of complex disease has increased the difficulty in R &D, but information technology has bought effectiveness in R &D.

• Preparing proper medicines in proper quantities with proper dosage is very important in R & D.

REFORMS AND ACTS

• Indian Patents Act 1972• Post TRIPS Patent Laws• Law pertaining to manufacture and drug in

India• Drugs and cosmetic Act 1940 • Pharmacy Act 1948• Narcotic Drugs and Psycotheropic Substances

Act

MAJOR FACTORS AFFECTING GROWTH• The growth of Pharmaceutical industry is expected to be

largely driven by new product launches and R&D.• The various factors influencing growth are as follows:

1. Operational Efficiency: The demand for medicines that are cheaper, which have little or no side effects and which are more efficient, has increased. The standard that can boost operational efficiency is the Process Analytical Technology (PAT). PAT is aimed at enhanced understanding along with a controlled manufacturing process which is very consistant.

2. Emerging Markets: The importance of investing in emerging markets emerges from the fact that the population is increasing and also from the incidence of increase in diseases.

RESEARCH AND DEVELOPMENT1. RANBAXY: R&D is one the important business

strategy of the company. With more than 30 years of R&D experience, the company has various research centres, highly qualified R&D scientists. The focus of Ranbaxy’s R&D is on quality product development, keeping in view safety of drugs on target populations.

2. CIPLA: One of the first company to develop and produce Active Pharmaceutical Ingredients(API). Research and Development in Cipla is accomplished by experienced scientists, technicians and chemists. Main focus of R&D includes: Product and process optimization, Analytical method development, Analytical method validation, Evaluation and techno-

marketing studies, Technology Transfer.

3. DR. REDDY’S LAB: Dr. Reddy’s business is supported by its technologically advanced Product Development infrastructure, which identifies new products and is engaged in every step of the way. Dr Reddy’s Integrated Product Development Organization (IPDO) is a one of the facility which comprises scientific talent across various functions and possesses a culture of modernization.

4. Lupin: Research is and will continue to be the main driver for success of Lupin Pharmaceuticals. Research is the foundation upon which Lupin Pharmaceuticals will participate in a variety of therapeutic areas.

5. Aurobindo Pharma: Aurobindo Pharma Ltd. has separate state-of-the-art research centers dedicated to Chemical Research and Formulation Research. The research centre focuses on Oral solid's and Oral Liquid's development, analytical method development, Validation and Stability, parenteral development, Bio-equivalence.

EXPORTS• The export top 5 Pharmaceuticals companies for a period of last 5 years where

Dr Reddys lab is leading the pack in 2013 followed by Cipla, Ranbaxy, Aurobindo Pharma and Cadila health.

• According to Brand India Equity Foundation, the Indian pharmaceutical market is likely to grow at annual growth rate (CAGR) of 14-17 per cent in between.

• Export now a days is becoming an important driving force for expansion in pharmaceutical industry with more than 50 % revenue coming from the overseas markets.

• India’s exports of drugs, pharmaceutical & fine chemicals stood at 1171.23 billion rupees during 2011–2012, up 33 per cent as compared to 879.59 billion rupees in the same period during the previous year.

IMPORTS• India’s imports of drugs, pharmaceutical & fine chemicals

stand at 143.85 billion rupees during 2012– 2013, up 29 per cent as compared to 111.14 billion rupees in the same period during the previous year, which is not really a good sign.

• India is almost self-sufficient in formulations and its imports mostly comprise bulk drugs and some intermediaries.

• These imports are freely permitted, except those that are restricted in the foreign trade policy. Import restrictions are mostly on drugs that contain narcotics and psychotropic components.

ADVANTAGES AND DISADVANTAGES OF EXPORTS TO INDIA

ADVANTAGES:

1. Our GDP will increase as the exports increase.

2. New technologies will come in our countries

3. Scientists might develop new technique while exporting.

4. Healthy network of educational institutions and has established strength in IT.

5. It has committed to free market economy and finding great opportunities to grow. 

DIS-ADVANTAGES:

6. They might reduce the opportunities for INDIAN players to compete in market.

7. Top quality of drugs in India might be exported leaving second and third quality of drugs for INDIA

8. Due to this export the prices in the drug market of INDIA might increase.

ADVANTAGES AND DISADVANTAGES OF IMPORTS TO INDIA

ADVANTAGES:1. We may get new technologies in our country as we import medicine.

2. We may get new medicine in which we can cure some diseases quickly.

3. We might improve the relations with them through exports.

4. The prices may differ and the costly medicines might be available for a lower price.

5. We might bring scientists from abroad for further classifications.

DIS-ADVANTAGES:

6. The GDP of country might decrease due to the expenses in import.

7. Some medicines might not suit for INDIAN customers as they are imported from abroad.

8. The prices of the drugs might vary as it is exported.

• Mergers and Accquisitions• During 2008-09, DRL acquired three new facilities viz.,

DowPharma's small molecules facility in UK, BASF Corporation's manufacturing facility at Shreveport in Louisiana, USA, and Jet Generici SRL, a company engaged in the sale of generic finished dosages in Italy. These acquisitions are already paying dividend and will act as building blocks for future growth of DRL

• In 2013 Aurobindopharma invested Rs.156 million to acquire 60% stake in an upcoming manufacturing facility of Celon Laboratories Limited. The facility will manufacture hormonal and oncology products

• The Indian company in November 2012 offered to buy 51 percent of CiplaMedpro at 8.55 rand a share. After Cipla's initial offer, the South African company won a 1.4 billion rand ($158 million) government drug contract, leading analysts to revalue the African firm higher.

PEST

• Before creating business plans or making decisions, it is important to 'scan' the external environment. This can be achieved through a PEST analysis, i.e. an investigation of thePolitical,Economic,Social andTechnological influences on a business. In addition it is also important to be aware of the actions of your competitors.

• Political Factors: All changes from importing and exporting are regulated by each countries administration that handles the regulations for drug import, export and production. These organizations and administrations are the important political actors in the pharmaceutical industry.

• ECONOMIC FACTORS: The Indian pharmaceutical industry, the most respected amongst the emerging nations, is one of the most sought after sectors from a global collaboration point of view. Having a strong macro and socio economic foundation, the “driving” factors are intrinsically deep-rooted in the Indian pharmaceutical sector and have not been deterred by recent speed breakers like quality issues faced by a few Indian companies.

• Socio-cultural Factors- Demographic evolution, characterized mainly by the decreasing of the birth rate and the increase of life average standing in the developed countries, simultaneously with the increase of the birth rate in the poor countries, correlated with an increase/decrease of the level of living and of the preoccupation from the part of the population for health protection has determined major mutations in the volume and consume structure of the pharmaceutical products.

• TECHNOLOGICAL FACTORS: The use of technology in healthcare delivery has dramatically changed

how both providers and patients interact. With technology use continuing to increase, the industry must change its approach to sales and marketing and how they communicate and engage with patients, physicians and hospitals.

• Thank you