Few years back, the Indian Pharmaceutical companies were worried about multinationals but today the trend has reversed. Currently, the MNCs are even afraid of Indian pharma companies entering their markets and trying to stall their entry in global markets. The country, which is emerging as a powerhouse in pharmaceuticals and biotechnology, could launch a blistering pace of innovative process and product patents. Moreover, leveraging huge cost advantages in research and manufacturing, the Indian research oriented companies could provide new drugs at fraction of the $500 million that takes to launch a new drug in the west.
Post Independence, India made important investments in creating over 1000 research institutes, knowledge factories churning out scientists. Young scientists familiar with English, comfortable with computers and with a scientific mindset are India's competitive edge in trained manpower assets few countries in the world can match. Rising health care costs; mergers and strategic partnerships, rising cost of R&D, high expectations of profit and performance are all factors creating immense pressure on the Global Pharmaceutical Industry. There are increased pressures due to patent expiration, search for new chemical entities, falling revenue pressures due to patented drugs going off patent in the next few years.
Today the Indian pharmaceutical industry is pegged at Rs 16000 crore, just about 1 per cent of the total global market. However in volume terms India is the fourth largest producer of the drugs contributing to more than 8 per cent of the global volume. From being totally dependent on imports from the multinationals in 1950, India has become exporter of the drugs. The exports are in excess of Rs 5000 crore and with Indian companies seriously eyeing global generic market, the exports are expected to grow significantly in next few years. There are success stories like Ranbaxy, Dr. Reddy's Labs, Cipla who have proved beyond doubt that Indian Companies are going to acquire significant share in the global markets. Many Indian companies have already established their subsidiaries in USA, acquired companies in USA or have established strategic partnerships with generic companies in USA. A strong home market is still to be exploited rural market and rising per capita income of the middle class can provide sustainable growth opportunities for healthcare industry in India. In the global market, strong reverse engineering skills for customs synthesis of drugs and low cost of high quality manufacturing are India's strengths. Due to abundant trained manpower, there are ample opportunities for contract research and clinical trials, The vast population, diverse genetic pool, spectrum of diseases, availability of volunteers and our fast response time can make India an attractive destination for clinical trials. The clinical trial market is around $ 15 billion. Low cost ; high quality and speed are potential competitive advantages for India research. As much as $40 billion worth of products are expected to gig off patent in the next few years. Indian companies are focusing on exploiting this great opportunity.
All this could mean better medicines at lower cost to the patients world over. And indeed the threat of WTO & TRIPS as perceived by some in India may well turn into a major opportunity for the country.
- (The author is Chairman, 3rd IPA Convention and Managing Director, Valois India Pvt. Ltd.)