Overview of Development,
Manufacturing & Global
Marketing from India
Dr Brian W Tempest
President – Pharmaceuticals
New Delhi
February 12, 2002
Once R&D discovers,
Can the Indian Pharma Industry develop, manufacture
& market around the world? R&D discovers
Global Pharmaceutical Industry

Global pharma market ~ $ 362 bn - 2000 estimates

Top 10 companies have ~ 40 % market share

10 countries presently cover ~ 80% of global pharma market

Generics opportunities

~ $45 bn in advanced markets by 2005

Government focus on affordable health care costs
in $ Bn
16
13.9
13.4
12
Blockbuster Patent Expirations
(adjusted for patent extensions)
8
7.1
6.7
4.2
4
2.7
0
2001
2002
2003
2004
2005
2006
World Pharma Markets
$ 282 bn
$ 362 bn
7
7
14
10
Latin America
16
Africa, Asia &
Australasia
24
Japan
18
30
Europe
43
31
1995
North America
2000
• Total market CAGR ( 1995 - 2000) = 5.3%
• US market CAGR ( 1995 - 2000) = 12.4%
Rank in 2005
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
USA
(1)
Japan
(2)
Germany (3)
France
(4)
UK
(5)
Italy
(6)
Mexico (11) 
China
(7) 
Brazil
(8) 
Canada (9) 
Spain
(10)
India
(14)
• Total market growth in 2000 = 6.9%
•US contribution ~ 55% ( $18.2 bn)
(Rank in 2000)
Source: IMS World Review 2000
World Generics and Emerging
Markets
Generics Market in 2000 ~ USD 36 bn
US
31%
Others
39%
Emerging Markets in 2000 ~ USD 30
bn
Japan
11%
Europe
19%
(Latin America, China, India, Russia)
Russia
10%
China
23%
India
13%
Latin
America
54%
Source: IMS World Review 2000
Indian Pharma Market
•
•
•
•
Size ~ $ 4 Bn in 1999
8% of Global Volume, 1% of global value
Rank 5th in volume , 14th in value terms
Number of drugs under price control
– 1979
– 1995
– 2000
347
74
?
90% of market
50%
?
• Exports of $ 1.7 b, Imports of $ 0.7b
• Prescription driven, Branded Generic market
• Modern Medicine reach 30% of population
Manufacturing capabilities
• Employs approx. 1.86 mn people
• Has 10000 manufacturing units.
• 2900 large scale and 7100 in small scale sector
• Total production stands at $ 4.2 bn.
• 95 % Formulations manufactured indigenously
• 90% of bulk drug requirement met
indigenously
RANBAXY
Production capacity of Indian Pharma Industry
Rs Crores *
RANBAXY
*1Crore = 10 Million
Investment in Indian Pharma Industry
RANBAXY
The Indian Pharma Market
Organized
API
domestic sector
manufacturing
Exporting
Accredited
International
R&D facilities
operations
New drugs research
Average spend ~
3.5%
250
90
100
70% of
pharma
Market
($ 3.5b)
75% of
API
Production
($ 700m)
80
90% of
pharma
Exports
($1.4b)
8
65% of
total R&D
Spend
($ 75m)
6
80% of JVs
and foreign
investment
Ranbaxy present in all categories
3
Improvement in health indicators
in India over the years
RANBAXY
Exports of Pharmaceutical Products from India
RANBAXY
Significant Presence
• India ranks 5th among the drug producing countries
in volume terms and 14th in Value terms.
• 8% share of global pharmaceuticals production.
• Market size of $ 3.5 bn growing at 16%
• 23,000 companies registered.
• 350 companies operating nationally.
RANBAXY
Comparative Drug Prices
Rupees
DRUG
INDIA
UK
Cimetidine 200mg
(anti-ulcer)
6.77
36.40
Ranitidine 150mg
(anti-ulcer)
16.15
121.67
Captopril 25mg
(antihypertensive)
15.45
58.56
Nifedipine 10mg
(cardiovascular)
3.82
29.90
Diltiazem 60mg
(antihpertensive)
15.26
40.89
Atenolol 100mg
(cardiovascular)
11.29
61.15
Haloperidol 5mg
(cardioprotective)
13.58
41.16
Naproxen 250mg
(antiarthritic)
12.76
31.07
RANBAXY
Key elements in the success
of Indian Pharma Industry
• Entrepreneurship and Scientific & Technological skills
• Reversing brain drain
• Strong capacity to learn, absorb, and adopt process technologies
• World class capabilities in Quality Management ensured approvals
by US-FDA, UK-MCA, Australian-TGA and SA-MCC
• Moving up the value chain in R&D – Process development to
Analog research , NDDS, Chiral research and NCEs
RANBAXY
Competitive edge of
Indian Pharmaceutical Companies
• Immense flexibility of industry to move from one drug to another
• Strong presence in foreign markets, net exporter of bulk drugs &
formulations
• Advantage of low costs and availability of high skills in process
development
• Cost of R&D much lower compared to other nations
• India has third largest scientific pool in the world
• In volume terms India produces 8-10% of worlds volume
RANBAXY
Ranbaxy Competitive Edges
• Brand Marketing
– Origins in India – cut throat competition
– USA Commodity generics
• Backward Integration
– Control API costs
– Not locked into suppliers
– Productivity breakthroughs
• R&D
– Low cost
– Excellent chemical research skills
Unique Price advantage
• Lower production cost due to reverse
engineering capabilities
• Lower input cost due to indigenously
manufactured raw material
• Low labor costs
• Inexpensive machinery
• Government’s policies
RANBAXY
PCT applications from developing
countries
Company
Country
1. Samsung Electronics
Korea
2. Shanghai Gere
China
3. Shanghai Gere
China
4. Fudon University
China
5. LG Electronics
Korea
6. Korea Institute of Technology
7. LG Chemicals
Korea
8. Ranbaxy
India
9. Samsung Chemicals
Korea
10. Korea ???Bwker Institute Korea
Applications
112
105
97
71
38
Korea 32
30
22
22
20
Strategic Architecture for Ranbaxy …
products
Teachnological
& Marketing
complexity
NCE
NDDR
NDDS
Commodity
generics
Conventional
dosage
forms
12 - 20%
20 - 30%
Value
Added/
Branded
Generics
OTC
Intermediates &
Bulk
Substances
2 - 12%
•Technology barriers
•Business risk
•R&D investment
•Regulatory requirements
•Scale management
• Information intensity
30-40%
45- 60%
60-80%
Gross margins
Market Mix - Changing Profile
USA
Japan
UK
Australia
Vietnam
China Poland
Russia Brazil
FW Africa
Thailand
S. Africa
Nigeria
Egypt INDIA
Sri Lanka
Malaysia
Developing
‘99
5
Emerging
Developed
79
16
67
29
Sales Revenue %
‘04
4
Internationalization … our changing
contours
80’s
90’s
00’s 
Strategy
India
Exports
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








  +


  +
API,
Dosage Form
Generics, Branded
Generics
Proprietary technology
platforms (NDDS),
VAGs, Rx products
Backward
integration
Developmental
research,
Regulatory,
Manufacturing,
Marketing
Innovative research,
Patents, Legal Brand
marketing for Rx
products
International
Markets
Developing
Emerging
Advanced
Products
Competencies
Thank You