The Indian Pharma Industry has successfully established its brand image in the international market by launching several new products. After meeting huge domestic demand, the pharmaceutical companies are focusing on other markets and bringing valuable foreign exchange. The Indian companies have successfully entered into the Middle East region during last couple of years and now more and more companies are setting up their operations in countries like Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, UAE, Lebanon Jordan and Egypt.
Though the Middle East market is relatively small when compared to the huge regulated markets, multinational companies mainly dominate it. However, Indian companies also entered the region aggressively by offering cost effective medicines and giving tough competition to MNCs. The pharmaceutical exports to GCCs reached at US$ 82.6 million during 2004-05.
The Middle East countries recorded slightly lower GDP growth in 2004 of 5.5 per cent as compared to 5.8 per cent in the previous year. This region is marked as semi-regulated and these markets are extremely price-sensitive. Further, the rising medical awareness and growth in per capita income is also raising demand for pharma products. The Indian pharmaceutical industry is rated the world's fourth largest by volume and the 13 largest by value. Low entry barriers have resulted in a highly fragmented industry structure with a substantial contribution from the unorganized sector. The Indian companies are mainly focusing on marketing activities in Middle East.
Over the years, the Indian pharma companies changed their strategy and invested large funds in R&D, set up large numbers of FDA-approved plants and consolidated marketing activity. There are over 75 US-FDA approved plants in India and over 250 cGMP compliant factories. The companies have also undertaken R&D in biotechnology and biopharmaceutical with the help of talent pool. The clinical research has helped in development of many products and has provided authentic and accurate scientific information and helped in answering medical queries. With a large base of approved facilities, the Indian companies are in a position to undertake contract manufacturing for global pharma majors.
The Indian companies undertook a collaborative business philosophy and entered into various markets. To reach several customers, the Indian companies have built a robust distribution network comprising dealers and distributors who are monitored by their own subsidiaries. Several Indian companies like Cipla, Ranbaxy Laboratories, Orchid Chemicals and Pharmaceuticals, Glenmark Pharmaceuticals, Lupin, Panacea Biotec, Kopran, Divi's Laboratories, Ind-Swift Laboratories Ltd., Dishman Pharmaceutical etc. have established firm root in Middle East region.
The export of Pharma products to GCCs declined slightly to Rs 160 crore in the first half of 2005-06 from Rs 164 crore in the similar period of last year. Exports to UAE reached at Rs 123 crore in the first half from Rs 116 crore in the last period. However, export to Saudi Arab and Oman declined during the period under review.
As earlier reported by PHARMABIZ, Dishman Pharmaceuticals and Chemicals, a Rs 150-crore plus Indian company, has executed various agreements with Arab Company for Drug Industries and Medical Appliances (ACDIMA) for setting up a joint venture project initially to manufacture 20 APIs for not only marketing in the Arab World but also exporting them from there. ACDIMA is promoted by 18 Arab nations for economic development of these nations through setting up of projects in various fields, including manufacturing of raw materials for pharmaceutical industry. ACDIMA, a government body, a local partner and Dishman will jointly hold the equity. ACDIMA has agreed in principal to Dishman's request to hold 51 per cent of the share capital of the joint venture project by Dishman.
Dishman has set up a 100 per cent wholly owned subsidiary called Dishman FZE in Dubai, United Arab Emirates. This subsidiary earned a net profit of Rs 1.79 crore in its first year of operations during 2004-05. The company is engaged in trading of bulk drugs and chemicals and other related activities.
Cipla
Cipla, the second largest Indian pharma company after Ranbaxy, has strong presence in the Middle East and its exports to Middle East region worked out to 11 per cent of total export earnings worth Rs 1053 crore.
Ranbaxy
Similarly, UAE is the largest contributor for Ranbaxy, India's top generic company, and it has three brands in the top 50 list of medicines sold in the UAE. The key initiatives included expansion of the sales team to manage a growing portfolio, and a training program to address functional and behavioral training needs. The company widened its footprint in the region by entry into a new market - Qatar - and became the first Indian pharma company to do so. In Oman, the company continues to maintain its leadership status in the private market. It entered into the chronic therapy segment by launching Simvor (Simvastatin) and Covance (Losartan) in the market. The company's Enhancin (Co-amoxyclav) entered into the reimbursement list of the Lebanon National Social Security Fund. The company also launched Romilast and Rosuvas in Lebanon and entered into the key chronic therapy areas of asthma and cardiovasculars. Orchid
Orchid Chemicals and Pharmaceuticals Ltd improved its exports to Middle East during 2004-05 to Rs 78.17 crore from Rs 76.26 crore in the previous year. The export to Middle East worked out to around 14 per cent of its total exports of Rs 638 crore during 2004-05. The company exports formulations to over 28 countries.
Panacea Biotec
Panacea Biotec also broadened its global presence by exporting products to new countries like West Indies, Yemen Uzbekistan, China, etc. besides carving a niche in the existing countries in CIS, African, Middle East and Asian sub-continent region. Panacea has also started the process of exporting its herbal/natural range of products to various countries. The company is planning to introduce branded formulations viz. Bukatel, Ocimix, Glizid-M Metlong 500 and Nimulid Nugel in the overseas markets besides getting its OTC range of natural and herbal products registered in the existing as well as in new markets, including the Gulf region.
Kopran
Kopran Ltd has set up a joint venture called Globalpharma Co LLC at Dubai and is in the process of getting registration for several new products. The joint venture achieved sales of Rs 17.96 crore during 2004. Kopran is providing technology to develop 30 new dosage forms, which would be registered in the current year. After registration of new products, the joint venture is expected to catapult operations in the region.
Glenmark
Glenmark Pharmaceuticals, a Rs 540-crore plus company, has establish its presence across a numbe of semi-regulated markets which share its demographic and regulatory profile, namely, Africa, South and South East Asia, the Middle East and more recently Latin America. The company's international operations in the semi-regulated markets recorded revenues of Rs 82 crore in 2004-05, a growth of 74 per cent over the previous year.
Divi's Lab
Divi's Laboratories, predominantly into exports constituting over 88 per cent of total sales, has established its presence in Middle East. The company recorded export earning of Rs 302 crore during 2004-05 and its exports to Middle East region worked out to 12.3 per cent of the total exports. Its domestic operations generated around 12 per cent of its total revenue of Rs 347 crore. The company added 17 APIs and intermediates to its product portfolio in the generics, future generics and custom synthesis business. Divi's is the first company to develop and manufacture synthetic carotenoids that have huge potential and still a growing business, which it is pursuing. It is also the largest manufacturer of some peptide reagents and protected amino acids worldwide.
Ind-Swift
Ind-Swift Laboratories invested in global capacities to leverage attractive economies of scale and has emerged as a preferred partner of international generic companies. The company has earmarked Rs 200 crore for capacity expansion over the next three years. Its exports moved up to Rs 108.80 crore in 2004-05 from Rs 67.93 crore in the previous year. The company has presence in40-45 countries - principally the Latin American countries, the Middle East, the European and Asian countries. Middle East region contributed around 5.67 per cent of its total export earnings.
Lupin
Lupin has constituted a separate division christeined 'AAMLA (Asia, Africa, Miiddle East and Latin America) for capturing new opportunities in this region. AAMLA is focused to penetrate and establish Lupin in competitive world markets such as Japan, Australia Latin America and others. This division is well equipped to understand and address the diverse, complex and unique characteristics of each market. The business model is oriented and tailore to meet local needs that could range from establishing the company's own marketing arm, leveraging the marketing strength of a local business partner to co-owning of brands.
Thus despite stiff competition from MNCs in the Middle East region, the Indian pharma companies are set to grow rapidly. The focus on R&D, filing of more and more DMFs and ANDAs in highly regulated markets, approved cGMP facilities and cost effective products will overcome the stiff competition in near future and Indian companies will be able to create strong market presence in Middle East.