Indian pharmaceutical industry has made phenomenal progress over the years and made its impact in the global market.This sector is being recognized as reliable source for drugs and drug intermediates and formulations.The companies started utilizing the tremendous opportunities available for Indian pharma industry in post 2005 era to manufacture and export many block buster products getting off-patented.Its immense strength in contract manufacturing quality medicines at inexpensive prices made the Indian pharma industry to complete both in regulated and non-regulated markets. This industry is playing a vital role in the Indian economy with about Rs.17000 crores exporting to over 200 countries in the year ear 2004-05.
Apart from its strengths in manufacturing and exporting allopathic medicines, India is known for its own systems of medicines with about 7000 units manufacturing various Indian system of medicines, India's share in the global herbal market, estimated at US$ 63 billion,is less than 0.2%, which shows that there is a tremendous scope for export market.
Acknowledged strengths US$ 8 billion industry
*Produces 70% APIs and almost the entire requirement of formulations within the country
*Ranks 4th in the world accounting 8% of world production by volume and 2% by value
* Very strong in Indian medicine systems of Ayurvedic, Unani, Sidha and herbals medicines
*Fast growing biotech industry with US$ 5 billion market
*Low cost of production
*Low R&D costs
*Abundant scientific and technical manpower
*Strong intellectual capital
*Excellent world-calls national laboratories,specialized in development processes and cost effective technologies
*An efficient and cost effective source for procuring generic drugs, especially the drugs going off patent in the next few years
*An excellent center for clinical trials
*USFDA/ WHO complying manufacturing facilities
*15% of Indian Pharmaceutical scientists are in USA, hence good network.
Exports
In 2005-2006, export growth over the last five years has been more than 20 per cent with a major share of Indian pharmaceuticals is exported to highly regulated markets of USA, Germany, UK, Netherlands and others, with Indian companies aiming at establishing global presence. US being the largest export market for Indian revenues from bulk drugs formulation, intermediates, biopharmaceuticals, medical devices & herbal products total 298.93 billion. The bulk drugs have the lions share of 32.5% followed with formulation of 31% intermediates /raw material & intermediates contributes 27.7% to the slice of the cake.
A major share of Indian pharmaceuticals is exported to markets of USA, Russia, UK, Latin America , Germany, and others, with Indian companies aiming at establishing global presence. US being the largest export market for Indian companies. The top 10 Indian export destinations for formulation ,biopharmaceuticals contributed 49%total exports of these products in 2005-06. Again USA being the most preferred destination from India which contributed 12.38 % followed by Russia which accounted 10.3% of total exports .
Cost opportunity gap : The pharmaceutical industry of India has evolved into a knowledge based one and has gained global recognition as a producer of low cost, high quality bulk drugs and formulations.
Indian pharmaceutical companies have a cost advantage that facilitates the production of drugs at almost one-twentieth the cost incurred by other developed economies. With a number of generic drugs likely to become off patent in the near future, India is likely to become a large manufacturing base for these drugs. Exports form a vital component of the growth strategy of most Indian pharmaceutical companies. While emerging players are focusing on vanilla generics and outsourcing opportunities, the larger Indian companies have moved from vanilla generics to patent challenges and are now building their specialty pipelines.
The Indian generic drug manufacturing has seen a significant increase over the last few years and is expected to be the main growth driver in future. Advanced countries like the US are publicizing increased consumption of generic drugs especially by the fixed income older generation. This is expected to further bolster the generic drug production market in India. Contract research and loan manufacturing would also be lucrative business areas for Indian pharmaceutical companies, particularly those complying with good clinical practices and having US-FDA certified manufac-turing plants.
The most significant factor for generics form 2006-10 is the number of products that are due to lose patent exclu-sivity, especially in the USA.The year is expected to be the biggest yet in terms of high-profile patent losses, with six $1bn drugs affected: Zocor (simvastatin) (the largest,with sales of $4bn in the USA), Zoloft (sertraline), Ambien (zolpidem), Pravachol (pravastatin), Lamisil (terbinafine) and Zofran (ondansetron). Overall,an estimated $23bn in products will be at risk, $18bn in the USA. looking further ahead, 12 of the 35 leading molecules may lose protection by 2009, yielding a total exposure of $72bn at 2004 sales values. It is time to plan better to tap $15 billion market which lying for contract manufacturing . So success will not only come those who only dream while they sleep but dream while they work too.
The author is Director, 7chemicals, Ahmedabad