Pharmabiz
 

INDIAN DRUG COS SHINING

P A FrancisWednesday, May 26, 2004, 08:00 Hrs  [IST]

The profile of Indian pharmaceutical company is changing. Pharma companies in India are no more seen as a bunch of domestic operators producing and supplying medicines to the local market with no investment in R&D. Today, they are fast growing Indian MNCs with a clear focus on new drug research. There are of course, a few thousands of small-scale drug companies which are producing medicines for the domestic market. They are not probably a visible lot. According to a study did by Pharmabiz, India will have a dozen Rs 1,000-crore pharma companies by 2005 at their current growth rate. Already, there are 7 companies with turnovers exceeding Rs 1,000 crore. Another five will be joining the Rs 1,000-crore league by next year. These top pharma companies are emerging as research based international corporations supplying generic and branded drugs to the north America and Europe, world's two large pharmaceutical markets. In fact, their domestic operations are shrinking and the focus is turning to mainly international business. The recent acquisitions of a string of medium scale pharma companies in the US and Europe by them is only an indication of this new trend. The top dozen Indian pharma corporations already have either manufacturing or marketing establishments in these developed markets. All these reflect a sign of maturity of Indian pharmaceutical entrepreneurs in a short span of just 20 years. Currently one third of India's pharmaceutical production of Rs 45,000 crore is being exported with attractive value realisation. At the current growth rate of 25 percent, India will be exporting more than 50 percent of its production in the next couple of years. Ranbaxy, the largest Indian pharmaceutical company, exported as much as Rs 2,429 crore during last year which is more than 70 percent of its total sales. Dr Reddy's and Cipla are two other major exporters exporting close to Rs 1,000 crore. One main reason for this changed focus is the profit these companies are making from their international business. With over 50 billion dollars worth drugs coming off patent in the US in the next few years, Indian pharmaceutical companies stand to gain a good chunk of generic business. In fact, this lucrative international business opportunity is motivating more and more pharmaceutical companies to go for international manufacturing practices. India already has more than two dozen pharmaceutical companies having US FDA or UK MCA approved manufacturing facilities. A number of medium scale companies are also investing heavily to upgrade their manufacturing facilities to capture a part of this highly profitable business and achieve a high growth rate. The direction of Indian pharmaceutical companies is right and a dozen of them could be billion dollar companies in five years from now.

 
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