Pharmabiz
 

Indian pharma market

Sunil S ChiplunkarThursday, January 15, 2009, 08:00 Hrs  [IST]

The Indian healthcare market is estimated to be worth US $ 30 billion and includes pharmaceuticals, healthcare, medical and diagnostic equipment, and surgical equipment and supplies. Revenues from the healthcare sector account for 5.2 per cent of the gross domestic product (GDP) and it employs over 4 million people. Private spending accounts for almost 80 per cent of the total healthcare expenditure. According to a 2007 report by Confederation of Indian Industries (CII)-McKinsey on 'Health in India', India is expected to spend US $45.76 billion on healthcare in the next five years. With the pharmaceutical sector expected to grow by leaps and bounds, the total healthcare market in the country could increase to US $53-73 billion (6.2-8.5 per cent of GDP) in the next five years. India is emerging as a global powerhouse in the pharma business with a robust pipeline of products and healthy performance. As per CII and Assocham, the turnover is expected to treble in 2015 and reach Rs 80,000 crore mark. As of now, the domestic sales stand at Rs 31,600 crore, while its exports stand at Rs 21,200 crore (the export figure includes bulk drugs and formulations). The country's R&D spend is around Rs 2210 crore. Trends The Indian pharmaceuticals market is typical in the sense, that the pharmacist has a great control over brand availability. Hence, the market is a combination of over-the-counter and prescription (OTX). Allopathic formulations The allopathic (mainly chemical) based pharma formulations market is the largest segment in the country with an estimated 20,000 manufacturers/marketers. This crowded segment has over 70,000 brands, reflecting brand clutter. There are about 20000 medical representatives in the country promoting products to about 10 lakh doctors. The number of pharmaceutical retailers is estimated to be 5 lakh. The allopathic segment, which has well entrenched players, is the largest and a growing one (In China, Western medicine has poor acceptance as compared to traditional Chinese medicine). About 25 per cent of allopathic pharma formulation market is held by the antibiotic-anti-infective market, while another 25 per cent of this market share is held by the gastrointestinals market. The rest of the allopathic ethical pharma market includes the emerging markets such as neuro-psychiatry, derma, asthma, arthritis and cardiovascular-diabetes management segments. Herbal formulations The herbal pharmaceutical formulations market is comparatively small, but is fast growing due to its emphasis on preventive healthcare. One rich feature is that the products in this segment are evergreen and are less susceptible to product obsolescence. However, this segment is in need of scientific standardisation of extracts, a proper ecosystem for supply of raw herbal extracts. The herbal or herbomineral preparations need robust clinical studies to win the prescribers' favour. The soft power of a country rests primarily on three resources: its culture, political values and foreign policies. Positive soft power of India, through its vibrant democracy provides international acceptance and is also a great product and service differentiator. In the case of the Indian pharma industry, ayurveda - herbal products, helps in providing the soft power and act as a differentiator. Biotech industry The Indian biotechnology industry has registered a 20 per cent growth in 2007. Now it is valued at Rs 10,273 crore, up 20 per cent from Rs 8,541 crore in 2006-07. Exports from this sector for FY07 stood at around Rs 4937 crore. As of now India has a bright chance of becoming a major player in the global biogeneric segment. The US govt. is preparing to usher in the first generation of biosimilars. In five years, biotech drugs will represent 25 per cent of the total pharma market. Seven major biotech molecules are facing patent expiry before 2010. EPO (erythropoietin), human insulin, interferons and granulocyte colony stimulating factor are the attractive markets. India is said to be on the threshold of scripting a success story in the field of global biosimilars just as it has been very successful in the global bulk drugs market and chemical formulations market. Opportunities & challenges India offers business opportunity for branded healthcare chains and internet/mobile aided convergence healthcare delivery. Though India has over 70 per cent of the population residing in rural areas, it has only a few doctors to take care of them with the proportion being 1 doctor per 1916 patients. Moreover, the geographic vastness makes the application of telemedicine sensible. Although, telemedicine has not taken off proportional to its potential in India, the internet through broadband and mobile is aiding its adoption. There is a vast scope for branded clinics and pharmacies to offer augmented primary healthcare facilities in India. In fact, one estimate says that internationally franchising business is around 17 per cent, where as in India it is about 3 per cent. Also, the country has increasing scope for application of business intelligence. The spiralling growth of the Indian pharma industry and the increased competition has now increased the application of market intelligence to reduce the strain on ever scarce resources. Business intelligence needs are even greater to ensure a bigger bang for the buck. However, patent tussle is the major challenge. The product patent regime is increasing the legal costs of generic drug business and is in a way a legal gamble. An estimated 70 billion dollar generic market in USA will go off patent and is attractive to pharma manufacturers of India. The reputation of India as a supplier of economical generics is increasing with US FDA closely monitoring the manufacturing facilities of biotech and chemical based products. (The author is manager - marketing and training, Juggat Pharma, Bangalore)

 
[Close]