Indian Pharmaceutical Industry
Riding a Growth Wave
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
India - An Introduction
Population
Over 1 bn
States/UTs
35
Geographical Area
3.3 mn sq kms
Languages recognised
22
Business language
English
Per Capita Income**
US$ 534
GDP**
US$ 650 bn
**(at factor cost & at current prices)
1USD=43.54 INR (as on July 4, 2005)
Source:CSO Statistics
India - Fast pace Growth
 Largest democracy
 4th largest economy by PPP index
 6th largest energy consumer
 ForEx reserves skyrocket from US$ 42 bn (2001) to
US$ 133 bn (February, 2005)
 GDP growth to continue between 6-8%
 3rd largest economy by 2050: Goldman Sachs
 Leading in IT & BPO
 Oil & Gas and Biotechnology sunrise industries
March 2005
India - Leading the world
 Hero Honda - largest manufacturer of motorcycles
 Moser Baer - 3rd largest optical media
manufacturer in world
 Pharmaceutical Industry - 4th largest in world
 Walmart, GAP, Hilfiger sources more than
USD 1bn worth apparel from India
 100 Fortune 500 have set R&D facilities in India
including GE, Delphi, Eli Lilly, HP, Heinz and Daimler
Chrysler
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Pharma Market
Size (2002-03)
US$ 7 bn
Size 2010 (estimated)
US$ 25 bn
CAGR(1995-2002)
16.6%
Exports
23%
CAGR(1995-2002)
Volume – wise
8% of global market
4th largest in the world
Share of formulations
March 2005
80%
Exports
India - Net exporter of pharmaceutical products
Exports (2002-2003)
US$ 2.8 bn
CAGR (over last decade )
26%
Rate of growth (2003)
21%
Export destinations
US, Germany,
Russia, UK and
China
March 2005
Increased R&D Focus
Shift from business-driven research
to research-driven business
March 2005
Increasing R&D Spend
1996 -2002
Annual recurring R&D expense growth rate
March 2005
32.3% yoy
Resurgence of FDI
Resurgence of FDI in the Pharma Sector
Source: CMIE
100% automatic FDI approvals
to aid increased investment in
R&D infrastructure by MNCs
March 2005
Quality Assurance in Manufacturing
India has the highest number of USFDA approved
plants outside the US
Manufacturing facilities
GMP compliant
Approved by international bodies - US FDA, UK MCA,
South African MCC
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Domestic Players
Ranbaxy
Laboratories
Largest pharma company in India;
Annual revenues of US$1bn
Dr Reddy’s
Laboratory
Indian company with presence in
more than 50 countries
Nicholas Piramal Aggressively investing in R & D
Cipla
One of the lowest cost manufacturer
of anti-HIV drugs in the world
Wockhardt
Largest Indian pharmaceutical
company in UK
March 2005
MNC Presence in India
GlaxoSmithKline Leads in 6 of the 10 therapeutic
categories
Pfizer
Owns the two largest selling
brands in India
Astra Zeneca
Involved in cardiovascular,
respiratory, maternal healthcare
& pain control and anasthesia
Aventis
Indian manufacturing sites identified
as potential global sourcing units
by global parent company
March 2005
MNC Presence in India
Merck
Leader in laboratory reagents
market in India
Novartis
Collaborations with
Dr Reddy’s and Torrent
Wyeth
Contract-manufacturing tie-up
with Indian major Bharat Biotech
Sanofi-Synthelabo Present in cardiology,
thrombosis & neuropsychiatry
Roche
March 2005
Already invested US$ 20 mn in
India and plans additional
US$ 7.35 mn in 2004-05
MNC Activity in India
Novartis AG seeking tie-ups with Indian companies
Bristol-Myers to enter India again
Aventis’s Goa unit to be sourcing hub
Pfizer India doubles research investment in India
AstraZeneca, Glaxo to make India R&D hub
Chiron to make India its Asian hub
Bayer AG to make India sourcing hub
Eli Lilly to make India sourcing hub
German major Boehringer Ingelheim to enter India
India to be Roche's global hub for bulk drugs
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Invest in India
Contract Research
Clinical research
USD 70 mn market (2001-02)
Growing at 20% per annum
Outsourcing - fastest growing
area for new investment
 US$ 1 bn opportunity by 2010
March 2005
Invest in India
Custom synthesis
Largest pool of trained analytical
and development chemists
Excellent track record of innovation
US FDA approved manufacturing
facilities
30-50% cost savings
March 2005
Invest in India
API sourcing and
contract
Global Outsourcing opportunity
worth US$ 15 bn by 2010
manufacturing
Global majors to outsource
manufacturing from India
March 2005
Invest in India
Collaborative R&D
Pre clinical testing
Superior and low cost chemical synthesis
skills advantages
Clinical trials
India to be an outsourcing centre for conducting
low cost clinical trials
GlaxoSmithKline has R&D alliance with
Ranbaxy Laboratories
March 2005
Export from India
Source: SSKI
Exports drive growth for Indian pharmaceutical majors
March 2005
Export from India
Source: SSKI
Generics - The key driver for export growth
March 2005
Partner with India
Marketing alliances - A win-win strategy
Increased market penetration
Zydus Cadila has strategic agreement with Schering AG
Nicholas Piramal has 5 year strategic alliance with
Biogen Idec
March 2005
Partner with India
New Drug Delivery System (NDDS)
 Process reengineering expertise
Low-cost scientific manpower available
Low capital requirement for NDDS research
Fast clearances from regulatory authorities
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Advantage India
Excellent chemical synthesis skills
Successful scaling up of laboratory processes to plant-size
Cost-effective and commercially viable non-infringing
processes
Pool of low-cost and highly skilled medical professionals
Manufacturing facilities of international standards
Quick absorption of new technology
March 2005
Indian Pharmaceutical Act
Reduction in number of drugs under price control to 28 as
against 74
100% foreign investment automatically permitted
Abolishment of industrial licensing for bulk drugs,
intermediates and formulations
Automatic approval for Foreign Technology Agreements
March 2005
Regulatory Scenario
IPR/Patent regulations
Product patent regime to be implemented by Jan 1 2005
in compliance with TRIPS
No. of Drugs under Price contro l
Price regulations
Price controls decline substantively
370
143
74
28
(E)
1979
1987
1995
Product and quality regulations
March 2005
2005
Policy Incentives
Tax exemptions at par with IT
Reduction in peak custom duties from 30% to 25%
Increase on rate of depreciation on life saving
equipment from 25% to 40%
Income from royalty on drugs licensed to foreign
companies exempted from tax
Tax holiday for R&D companies
March 2005
Union Budget 2005-06
Key Features
• 22% increase in allocation under the National Rural Health
Mission
• Formation of a SME Growth Fund to provide equity support to
small & medium units in the pharmaceutical & biotechnology
sectors.
• Import duty on select equipments used in pharmaceutical &
biotech research reduced from 20% to 5%.
• 150% weighted deduction on R&D expenditure
Fillip to R&D initiatives
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Contact in India
Confederation of Indian Industry (CII)
23, Institutional Area
Lodi Road
New Delhi – 110003
Tel 0091 11 24629994-97
Fax 0091 11 24626149/24615693
Email sandhya.tewari@ciionline.org
March 2005