PHARMA INDUSTRY IN INDIA

-SAGAR NEIL GONSALVEZ

-KANIKA JAISWAL
-MUNAVAR AHMED
-NIKITA H NAGPAL
 INTRODUCTION
• The Indian pharmaceutical industry is the world's second-largest by
volume

• India's bio-tech industry clocked a 17 percent growth with revenues of

Rs.137 billion ($3 billion) in the 2009-10 financial year over the previous
fiscal.

• The first pharmaceutical company are Bengal Chemicals and

Pharmaceutical Works, which still exists today as one of 5 government-
owned drug manufacturers, appeared in Calcutta in 1930.

• Due to the presence of low cost manufacturing facilities, educated and

skilled manpower and cheap labor force among others, the industry is set
to scale new heights in the fields of production, development,
manufacturing and research.
 INDUSTRY TRENDS
• The pharma industry generally grows at about 1.5-1.6 times the Gross Domestic
Product growth
• Globally, India ranks third in terms of manufacturing pharma products by volume
• The Indian pharmaceutical industry is expected to grow at a rate of 9.9 % till
2010 and after that 9.5 % till 2015
• In 2007-08, India exported drugs worth US$7.2 billion in to the US and Europe
followed by Central and Eastern Europe, Africa and Latin America
• The Indian vaccine market which was worth US$665 million in 2007-08 is
growing at a rate of more than 20%
• The retail pharmaceutical market in India is expected to cross US$ 12-13 billion
by 2012
• The Indian drug and pharmaceuticals segment received foreign direct investment
to the tune of US$ 1.43 billion from April 2000 to December 2008
 CHALLENGES
Every industry has its own sets of advantages and disadvantages under
which they have to work; the pharmaceutical industry is no
exception to this. Some of the challenges the industry faces are:
• Regulatory obstacles
• Lack of proper infrastructure
• Lack of qualified professionals
• Expensive research equipments
• Lack of academic collaboration
• Divide between the industry and study curriculum
 GOVERNMENT INITIATIVES
• The government of India has undertaken several including policy
initiatives and tax breaks for the growth of the pharmaceutical
business in India. Some of the measures adopted are:
• Pharmaceutical units are eligible for weighted tax reduction at 150%
for the research and development expenditure obtained.
• Two new schemes namely, New Millennium Indian Technology
Leadership Initiative and the Drugs and Pharmaceuticals Research
Program have been launched by the Government.
• The Government is contemplating the creation of SRV or special
purpose vehicles with an insurance cover to be used for funding new
drug research
• The Department of Pharmaceuticals is mulling the creation of drug
research facilities which can be used by private companies for research
work on rent
 BUDGET 2010 – expectations of the PHARMA
INDUSTRY

• Research tax credits

• Include expenses related to research done outside R & D lab
• Extend tax holiday to hospitals beyond rural areas
• Subsidy for rural healthcare infrastructure
• Rationalise assessment procedure
• Extend list of life saving drugs
 PHARMA EXPORT
• In the recent years, despite the slowdown witnessed in the global
economy, exports from the pharmaceutical industry in India have shown
good buoyancy in growth. Export has become an important driving force
for growth in this industry with more than 50 % revenue coming from the
overseas markets. For the financial year 2008-09 the export of drugs is
estimated to be $8.25 billion as per the Pharmaceutical Export Council of
India, which is an organization, set up by the Government of India. A
survey undertaken by FICCI, the oldest industry chamber in India has
predicted 16% growth in the export of India's pharmaceutical growth
during 2009-2010.
India's Domestic Pharmaceutical Market (12
Months Ended January 2009)
Size ($ Market Share
Company Growth Rate (%)
Billion) (%)
Total Pharma Market 6.9 100.0 9.9

Cipla .36 5.3 13.4

Ranbaxy .34 5.0 11.5

Glaxo Smithkline .29 4.3 -1.2

Piramal Healthcare .27 3.9 11.7

Zydus Cadila .24 3.6 6.8

Source: ORG IMS

 SOME PLAYERS IN THE MARKET
There are several national and international pharmaceutical companies that
operate in India.
• Ranbaxy Laboratories Limited 
• is the biggest pharmaceutical manufacturing company in India.
• is ranked at the 8th position among the global generic pharmaceutical companies has
presence in 48 countries including world class manufacturing facilities in 10 countries and
serves to customers from over 125 countries.
• Ranbaxy Laboratories 2009-2010 Q3 Net Profit Results showed a profit of Rs 116.6 crore as
compared to Rs 394.5 crore deficit, recorded during the corresponding period last fiscal.
• Dr. Reddy's Laboratories 
• manufactures and markets a wide range of pharmaceuticals both in India and abroad.
• has 60 active pharmaceutical ingredients to manufacture drugs, critical care products,
diagnostic kits and biotechnology products.
• has 6 FDA plants that produce active pharma ingredients and 7 FDA inspected and ISO 9001
and ISO 14001 certified plants.
• Dr. Reddy's Q1 FY10 result shows the revenues of the company at Rs. 18,189 million which is
up by 21%. During this quarter the company introduced 24 new generic products, applied for
22 new generic product registrations and filed 4 DMFs. 
Cont….

• Cipla 
• is an Indian pharmaceutical company renowned for the manufacture of low cost anti AIDS
drugs.
• product range comprises of anthelmintics, oncology, anti-bacterials, cardiovascular drugs,
antibiotics, nutritional supplements, anti-ulcerants, anti-asthmatics and corticosteroids.
• also offers other services like quality control, engineering, project appraisal, plant supply,
consulting, commissioning and know-how transfer, support.
• For the financial year 2008-09 the company registered an increase of 22% in sales and other
income over the previous year.

• Nicholas Piramal 
• is the second largest pharmaceutical healthcare company in India.
• the brands manufactured by the company include Gardenal, Ismo, Stemetil,
Rejoint, Supradyn, Phensedyl and Haemaccel.
• has entered into join ventures and alliances with several international corporations
like Cheissi, Italy; IVAX Corp; UK, F. Hoffmann-La Roche Ltd., Allergan Inc., USA etc. 
Cont….

• Glaxo Smithkline (GSK) 

• is a United Kingdom based pharma company;
• it is the world's second largest pharmaceutical company.
• The company's portfolio of pharma products consist of central nervous system,
respiratory, oncology, vaccines, anti-infectives and gastro-intestinal/metabolic
products among others.
• On November 2009, the FDA had announced that the H1N1 vaccine manufactured
by GSK would join the list of the four vaccines approved. 

• Zydus Cadila 
• also known as Cadila Healthcare is an Indian pharmaceutical company located in
Gujarat.
• The company's 1QFY2010 results show the net sales at Rs880.3cr which is higher
than the estimated Rs773cr. The net profit was Rs124.8cr which was increase of
39%; the increase was on account of higher sales and improvement in the OPM.
 FUTURE SCENARIO
With several companies slated to make investments in India, the future scenario of the
pharmaceutical industry in looks pretty promising. The country's pharmaceutical industry has
tremendous potential of growth considering all the projects that are in the pipeline. Some of
the future initiatives are: 
• According to a study by FICCI-Ernst & Young India will open a probable US$ 8 billion market
for MNCs selling expensive drugs by 2015
• The study also says that the domestic pharma market is likely to reach US$ 20 billion by 2015
• The Minister of Commerce estimates that US$ 6.31 billion will be invested in the domestic
pharmaceutical sector
• Public spending on healthcare is likely to raise from 7 per cent of GDP in 2007 to 13 per cent
of GDP by 2015
• Dr Reddy's Laboratories has tied up with GlaxoSmithKline to develop and market generics and
formulations in upcoming markets overseas
• Lupin, a Mumbai based pharmaceutical company is looking to tap opportunities of about US$
200 million in the US oral contraceptives market
• Due to the low cost of R&D, the Indian pharmaceutical off-shoring industry is designated to
turn out to be a US$ 2.5 billion opportunity by 2012