About Indian Pharmacy
Pharmaceutical Industry is a major business worldwide and contributes to GDP of India as well.
The Indian pharmaceutical industry ranks 3rd in the world terms of volume and 14th in terms of value. The domestic market was worth US$13.8 billion and is growing at a rapid pace of about 10% per year. The Indian Pharmaceutical Industry has an 8% share in global sales. India also produces about 20% – 24% of all generic medicines used in the world. This is why the Indian Pharmacy sector ranks 3rd in terms of volume and 14th in terms of value. The Indian Pharmaceutical Industry has 20,000 independently registered units that are in tough competition with the government’s price control. Due to this tough price competition, consumers in the local as well as international markets get quality products at a very reasonable rate.
The Pharmaceutical industry has seen rapid growth around the globe in the last few decades. The current market leader holds 7% share of the entire market. There are nearly 250 corporations around the world that hold 70% share in the global market. Due to the low cost labour and business friendly policies on the Indian government, many of these corporations have shifted a part of their manufacturing and research services to India.
As more and more Pharmaceutical companies strive to increase their profitability and reduce overhead costs of research and product development, India has become a levered industry for development of new drugs. By moving most of new product research to India, pharmacy companies decrease expenditure by 40% – 60%. Consumers are also spending more on healthcare every day. As compare to 4% in 1997, consumers were spending 7% in 2007 on healthcare. This figure is expected to reach 13% by 2015.
Major Players in Indian Industry:
There are two major players in Indian Pharmaceutical Industry:
- Companies having Indian Origins
- Multi-National Companies Investing in Indian Pharmacy Sector
The top five players in the Indian Pharmaceutical Industry are:
- Sun Pharmaceuticals
- Dr Reddy’s Lab
- Cipla Pharma
- Aurobindo Pharma
India consumes about 80% of the drug produced in the county endogenously. However, Most of bulk medicines produced is exported to different countries. According to stats collected in 2006-2007, USA and South Africa are the top importers of Pharmaceutical products from India. They imported drugs of $3.8 billion and $461.1 million, respectively. Other countries that have increased the importation of Indian Pharmacy products in recent years are Kenya, Tanzania and Brazil.
Contract manufacturing has also benefited the Indian Pharmacy industry as well as the multi-national corporations and Local players involved in the process. Although Europe and North America dominate the Contract manufacturing industry, the growing Pharmacy markets in China and India now hold about 35% to 40% share for production of ingredients and formulations.
There have been two major developments that advocate the fact that the Indian market will profit greatly from outsourcing. Firstly, a lot of drugs are about to come off-patent which will generate millions of sales. Secondly, India’s product patent regime has arrived which will boost the confidence of major international pharmaceutical players in the Indian market.
The triumph of Indian industry in the contract manufacturing area has brought around many important global developments. For instance, a leading contract research and manufacturing services (CRAMS) company in India, named Jubilant Organosys, has bought into a number of US Pharmacy companies namely Target Research Associates, Trinity Laboratories, and Trigen Labs. Moreover, the Indian pharmacy giant, Bilcare Ltd, has acquired a US Pharmacy firm named ProClinical Inc. and established its first manufacturing facility in the US.
A number of factors have contributed to the exponential growth of the CRAMS area in the Indian Pharmaceutical market. Some of these are:
- Modern Cutting-Edge Infrastructure
- High Quality Research Expertise
- Dependable Regulatory Environment
- Abundant Skilled Labour
The major area where there is room for heavy development in India’s pharmacy sector is Generics. India exports drugs to more than 65 countries around the globe. USA, which is itself the largest pharmacy market of the world, is currently the largest importer of Indian drugs in open market.
Most of our customers will be very much interested to know what generic drugs actually are and why they are much cheaper than similar branded products available in the market. The term “generic drug” is used for medicines that are developed and sold without any patent protection. Some of these medicines might have patents on their formulation but there are no patents as far as the active ingredients used in these drugs are concerned.
The generic drugs are usually cheaper than branded drugs because manufacture does not have any patent for the ingredients or formulation of his drug. A patent protects the manufacturer’s claim to develop the product exclusively and does not allow any other entity to produce the same drug in the market. According to normal rules, the patent is valid for a period of 17 years after which another entity is allowed to manufacture the same drug.
A drug that has been patented is the only one of its kind in the market. This means that its formulation and effects are exclusive. Therefore, when you buy a patented drug from the market, you are not only paying for the cost of ingredients and manufacturing but also for the cost of research, testing of the drug, proving that the drug is safe for consumption and marketing and transportation of the drug. If the drug is available only for certain symptoms or conditions, the consumers also have to pay a premium. All of these costs make the drug very expensive as compared to a non-patent drug. The manufacture, in this case, is also charging consumers for the efforts during the entire development procedure.
After 17 years pass on a patent and it expires, other companies are also allowed to manufacture this drug. Since these companies do not have to do any research, test the product or market the product as it is already formulated, they produce it at a much lower cost. The drug produced as a result of redevelopment of a previously patented formulation is called a generic drug.