Pharmabiz
 

Indian pharma size to go up to Rs 60,000 cr in 2007-08: Assocham

Our Bureau, MumbaiMonday, July 3, 2006, 08:00 Hrs  [IST]

Indian pharmaceutical industry is expected to register a growth rate of 11 per cent to enhance its size to Rs 60,000 crore by 2007-08 as against Rs.43, 290 crore in 2004-05 and substantially enlarge its pharmaceuticals exports to regulated markets of US and Europe in generic drugs markets in which $65 billion worth of drugs will go off Patent, according to the findings of the Study undertaken by The Associated Chambers of Commerce and Industry of India (ASSOCHAM). The findings further revealed that the Indian pharmaceutical exports have tremendous potential to grow at around 18 per cent by 2007-08 to take its total export volume to about Rs.30,000 crore as against Rs.18, 290 crore in 2004-05. The size of Indian pharma industry was estimated at Rs.39, 000 crore in 2003-04 and its exports volume were pegged at Rs. 15,500 crore in the same period. Although, official figures for total pharma industry and its exports are yet to be obtained by Assocham for 2005-06, the Chamber, however, estimates that the size of pharma industry would grow at over Rs.48,015 crore with exports volumes likely to exceed Rs. 21582 crore. Releasing the study, Anil K. Agarwal, Assocham president however, added that the patent's expirations of branded products will substantially contribute to the growth of Indian pharmaceutical industry, thereby pushing a great deal its exports, particularly in generic drugs markets because of their low production costs and give India an edge over other countries, particularly those of China and Israel. Agarwal said that since several branded products are slated to lose patent protection in developed markets in the coming years, e.g. in the US drugs worth $40 billion and in Europe drugs worth $25 billion will go off patent by 2007-08, will provide adequate opportunities for Indian drugs manufacturers in the generic drug markets to capture their large market share. The Assocham Chief felt that it will be easier for Indian drugs manufacturers to seize larger market share of generic drugs in the overseas market particularly those of US and Europe, because it is unlikely that National Pharma Pricing Authority will unleash its regulation on fixing drugs prices to industry. Consequently, pharma majors will have no options but to continue to explore export opportunities in overseas market which besides US and Europe will also be available in abundance in African continent. The Chamber is also of the view that the migrations into a new regime of product patent would change the fortunes of domestic pharma industry in the long term and would bring with it new innovative drugs. Though this will increase profitability of MNC pharma companies, it will force domestic players to focus on research and development, besides moving towards consolidation of small players who may not be able to cope up with the challenging environment. The study further points out that globally, drugs worth $ 40 billion are likely to go off patent by the current year itself and another 70 billion dollar drugs will go off patent by 2008. This is against the projection of US and Europe in which drugs worth $65 billion will go off patent. Indian companies are expected to grab around 30 per cent share of the increasing generic market in pharma sector world over, said Agarwal. Apart from the generic opportunity in the product patent age, there are also avenues to fuel business in the pharma industry. The first and foremost chance and challenge is to take the pharma business to those geographies where Indian presence is not well represented. Since Indian pharma companies can leverage their strength in terms of low cost of production and availability of quality manpower as domestic production costs are almost 50 per cent less compared to developed countries. Indian firms in view of Assocham can take advantage of its low cost to score over others to grab a huge market size of African countries in generic drugs market also. This will be, so because Africa in future will provide huge opportunity to Indian drugs manufacturers particularly following withdrawal of the patent suit filed by 39 global pharma companies against the South African government which allowed the sale of cheaper branded generic drugs.

 
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