The global pharmaceutical industry is witnessing a paradigm shift. The
current growth trends continue to materially alter the size and
structure of the global business landscape in general and
pharmaceutical business in particular. The growth pendulum for global
pharma market has conclusively swung in favour of fast growing markets
which is expected to be accelerated by 70 per cent of its growth from
emerging market.
The obvious consequence is that the trend has
challenged the traditional Big Pharma business model concentrated on
regulated markets and patented products. In this scenario, the strategic
steps adopted by Big Pharma for aggressive realignment of business to
fast growing markets by way of dramatic shift of resources and
accelerate new product launches will definitely benefit MNC pharma
companies in India as well as generic companies willing to partner with
MNCs.
As far as the market domination is concerned, the
structural alteration is from mature pharmaceutical market players viz.
USA, Canada, UK, Western Europe and Japan from growth of 50 per cent
till 2008 to the decline stage of 15 per cent from 2009 onwards to the
fast growing markets viz. Brazil, India, Turkey, Mexico, Russia, South
Korea and China by expecting a contribution of 70 per cent of the global
pharma market growth.
Where does India stand?
As the
fourth largest market in the Asia Pacific Region and an important player
among the fast growing pharmaceutical markets, India has also witnessed
considerable growth in its expansion activities with the establishment
of IPR, rising middle class population, emerging rural markets and
improvement in medical infrastructure facilities. Amongst the fast
paced global market, Indian pharma market occupies a predominant
position and is the second fastest growing sector in India, after IT.
The statistic shows that the Compound Annual Growth Rate (CAGR) during
2004-08 for India’s pharmaceutical market was 13.8 per cent. In view of
the significant market growth, it is estimated that by 2014 and 2019,
overall pharmaceutical sales will reach Rs 1539 bn (US$40.18 bn) and Rs
2648 bn (US$ 70.60 bn) respectively. A key requirement for growth is
undeniably the country’s booming economy and greater state involvement
in the health sector.
Apart from the fast growing
economy,India’s large, growing and ageing population is a major
attraction for pharmaceutical firms. According to the UN Population
Division, the number of people living in the country will increase from
1.04 bn in 2000 to 1.41 bn in 2020 – a rise of 36 per cent At the same
time, the population aged 65 and over will increase from 4.3 per cent
to 6.3 per cent over the same period, though the pharmaceutical
expenditure in 2009 was 1.24 per cent of GDP, which is just below the
global average of 1.40 per cent. The inevitable growth of pharmaceutical
sector in the country is vivid from the above factors.
The
role of Maharashtra
As far as Maharshtra is concerned, it
could retain its status as a ‘Pharma Hub’ both in terms of manufacturing
and marketing despite the spurt of industrialization in Himachal
Pradesh, Uttaranchal and Sikkim owing to the financial incentives
extended both by the Union as well as the respective state
governments. Also at a time when special initiatives are being taken in
the southern states viz. Andhra Pradesh and Tamilnadu for the
pharmaceutical business as a part of the ongoing industrialization
efforts.
Maharashtra is one of the strong pillars of
pharmaceutical sector in India as the majority of the top 10 pharma
companies in India are based in Maharashtra. Moreover, Mumbai plays a
pivotal role in the economic and business activities of the nation
having major ports and airports, due to its economic strength and
ideal logistic position. The state also has skilled, efficient and
competitive manpower, advanced technology, R & D, infrastructure
& manufacturing facilities besides a committed populace having
strong socio-economic background.
Vision for biotechnology
Ashok
Chavan, Chief Minister of the state , while stressing on the need for
fast paced growth of industrial sector opined that biotechnology, after
IT, has the potential to transform the lives of the people in the state
by hugely impacting agriculture, animal husbandry, health, environment
protection and material transformation, for which the state has already
announced Biotechnology Policy 2001.
The Chief Minister has reassured
his government’s commitment to the expansion of the biotech industry in
the state in order to help to develop affordable and more cost
-effective drugs and devices to counter diseases common to India and to
tropical and sub-tropical areas to reduce the disease burden. He has
further assured the Government’s mission to develop and promote
utilization of animal diagnostics and vaccines and also to improve the
quality of life through better health and better environment.
Maharashtra
was the top contributor of biotech revenues in 2008-09 with 32.78 per
cent share of the total revenues generating Rs. 3978.10 crore with a
growth of over 10 per cent compared to the previous fiscal revenues of
Rs. 2535.71 crore. The strategy laid down by Maharashtra Government to
attract investment in the biotech sector is to provide various
incentives under New Package Scheme of Incentives – 2007.
Among
various incentives schemes provided, the Government has already taken
initiative assuring the private biotech parks are allowed in the green
zone / no development zone / commercial zone and are also eligible to
get 100 per cent FSI (Floor Space Index) and would be provided with
power at agricultural tariff and also excepted from statutory power
cuts. For conducting R & D, the biotech units would be permitted to
acquire agriculture land beyond the limit mentioned under Bombay Tenancy
and Agricultural Act (BTAL Act). The FDA will also play the role of a
facilitator in the growth and development of pharmaceutical and food
processing biotech industry.
As a cosmopolitan state having
abundant resources with multicultural talent coupled with required
infrastructure, R & D and financial robustness, Maharashtra has
enormous opportunities to regain its past glory in pharmaceutical sector
in the days ahead.
The author is
Vice Chairman cum Managing Director of Ind-Swift Laboratories Ltd,
President of IDMA & Vice Chairman of Pharmexcil