Despite the recent problems faced by the industry in the exports front, various major pharma experts , consultants and market surveillance firms are upbeat on the Indian pharma industry prospects. However they have come out with out different projections about the pharma market size of India in the next decade.

The Mckinsey and Company, the global management consulting major,has predicted that the $ 20 billion Indian pharma industry is likely to grow to $ 40 billion by 2015, if the current growth rates and trends continue in the near future.

As per a study conducted by McKinsey, the domestic market which is growing at almost 10 to 14 per cent at present itself will provide $ 20 to $24 billion in 2015 and the exports and contract manufacturing business, which are growing at 10 per cent per annum, will contribute to achieve the predicted growth. The firm revealed its latest findings in the India Pharma Summit 2009 recently.

"By 2015, the manufacturing opportunity in India including for the international generic business and the contract manufacturing business will be at $ 18 to $20 billion. Considering the current growth rates and the opportunities available and the positioning of Indian pharma in the global generic market, it is not hard to expect Indian pharma industry to reach $ 40 billion by 2015," said Palash Mitra, partner,McKinsey and Company Inc, while presenting his study - Indian Pharma - Status and Opportunities for Production, Investment & Trade in the summit.

The contract manufacturing business of core products of multinationals in India will be another opportunity for domestic companies for future growth, as that business itself will offer $ seven to $ eight billion in future. The contract manufacturing business, which was recorded at $ four billion in 2007 is expected to reach $10 billion in 2015, with a 25 per cent growth rate.

The R&D potential, though will not be much compared to the other businesses, will be between $ eight to 10 billion by 2020, he added.

McKinsey, in an earlier report had said that the Indian pharma growth will be driven by the fast growing patient population and the aggressive business strategy of the Indian companies.

The market will be driven on six major developments - increase in the size of disposable income and the number of middle-class households, expansion of medical infrastructure, growth of health insurance industry, increase in chronic disease patients, new patent regime introduced in 2005 and aggressive sales promotion strategies of emerging companies.

Presenting the theme " Inclusive health India, the way forward" at the seventh Global Knowledge Millenniummmmm Conference , Assocham President and Vice Person of Piramal Life Sciences , DR Swati Piramal said that the Indian pharmaceuticals market is likely to triple by 2015 from the $ 77 billion industry today.

For this growth would have to move from 9.8 per cent per annum to 14.2 per cent through aggressive market expansion and reaching out healthcare to the people at the bottom of the social pyramid through innovative programmes, she added.

According to her, India is all set to reshape the world drug industry by reducing the cost of drug discovery from $one billion to $ 100 million per new molecule , providing better access to medicines for people at the bottom of the pyramid , bringing healthcare to rural people through the initiative i.e.e.e. rural Swasthya Sevikas and remote telecom connectivity to medical professionals for rural populations , better research using its knowledge-oriented talent and search for new drugs in India's natural plant and marine resources and new patent law.

According to some international rating agencies, India could become the fifth largest pharmaceutical market in the world by 2020.As per some reports from the Department of Pharmaceuticals (DoP), the Indian pharmaceutical industry has grown from a mere $ 0.3 billion turnover in 1980 to about $19 billion in 2008. The country now ranks third in terms of volume of production with 10 per cent of global share and 14th largest by value (1.5 per cent ).

Goldman Sachs, the international investment banking firm, in 2007 itself, had predicted that the pharma market in the country will reach sales of $43 billion in 2020, placing India as the world's fifth largest pharmaceutical market by the time.

A recent Price Waterhouse Coopers (PWC) report has indicated that India would be among the top 10 largest pharma markets in 2020, along with China and Turkey. The company expects the global pharma market would be worth about $1.3 trillion by 2020.

Despite the financial meltdown which affected the industries across the board world wide, the Indian pharma industry is expected to grow at 12 to 13 per cent in 2009, according to ORG IMS Research. The macro-economic conditions that the country has have cushioned the impact of the meltdown in pharma, it added. This itself shows the immunity of Indian pharma to the global market challenges, says an industry expert.

The PWC report details that the global population is projected to rise from $ 6.5 billion in 2005 to $ 7.6 billion in 2020 with a rapidly ageing population. By 2020, about 719.4 million people - 9.4 per cent of the global population - will be at the age of 65 or more, compared with 477.4 million (7.3 per cent) two years ago. "Older people typically consume more medicines than younger people; four in five of those aged over 75 take at least one prescription product, while 36 per cent take four or more. So the grey factor will boost the need for medicines dramatically," says PWC.

The domestic market, which has been monotonously expanding and has crossed Rs 55,000 crore in 2008-09 from Rs 32,000 crore in 2003-04 as per the DoP report, also offers a huge potential for the pharma industry. The very fact that the Indian pharma has not explored the majority of the rural market potential in the country reveals the unexplored opportunities.

In 2005, India amended its patent laws to comply with the World Trade Organisation's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), an international treaty mandating minimum standards for trade and intellectual property protection. This has also opened enormous potential for both Indian and overseas companies to expand their research and development (R&D) operations in the country. Many Indian pharma majors including Dr Reddy's Lab, Sun Pharmaceuticals, Glenmark Pharmaceuticals and Piramal Lifesciences are working on new drugs which are lined up for launch by 2011-12.

The amendment of patent laws and the emergence of pharma industry in the country has also increased the business scope of contract research organisations (CROs), especially the clinical trials segment. The country has been recording a growth of 20 per cent per annum in clinical trials and the potential is immense as the country offers low cost research resources and a vast pool of drug na?ve patients.

The country is also growing as an attractive destination for contract manufacturing and research services (CRAMS) business. The custom manufacturing outsourcing in India is growing at a rate of 43 per cent, that is thrice the global market, driven by the capabilities of Indian firms to create a differentiating cost value proposition powered by its lower manufacturing costs, skilled manpower and strong technical capabilities, according to a latest study released by the leading professional services firm Ernst & Young (E&Y) and the Organisation of Pharmaceutical Producers of India (OPPI).

According to market research firm IMS, booming Indian pharmaceutical market is all set to become a global pharma hub due to its value propositions, cost advantage and excellent R&D. Growing at a CAGR of 12-15% , the Indian pharma market will surpass the global average of 4-7% during 2008-2013, it adds.

The Indian pharmaceutical growth is set to be stimulated by surging demand in the domestic market along with an increased level of focus from multinational pharma giants for contract research and manufacturing services (CRAMS), it has pointed out.

The total global outsourcing, custom manufacturing (phase-II b to the off patent stage, including intermediates, API and formulations) contributes almost 65 per cent of the pie of the $ 51 billion market in 2008. Within India the custom manufacturing is almost $1.1 billion and is growing at 43 per cent.

India is also emerging as an attractive destination for drug discovery and development services, growing at 65 per cent rate, which is more than three and half times the global growth rate driven by strong chemistry capabilities, skilled manpower and cost value proposition, says the study.

According to a spokesperson of E&Y "With India offering significant cost-quality proposition in end-to-end research and development with potential savings of 61 per cent as compared to US which is coupled with a strong supply of skilled manpower and capital efficiency we could see even more of the global pharma companies adopting different operating models such as captive off shoring, dedicated R&D unit in partnership, fee for services and collaboration/ JV for future growth within India."

An important change which was witnessed in the Indian API industry in the recent years is that the companies which earlier had highlighted low cost manufacturing and R&D facilities as their strength has started emphasising on quality of research, development and production to switch over to value- generation mode.

Evidently, the Indian companies can manufacture bulk drugs in-house at 40-50 per cent of ethicals' cost. But, with the Indian focus turning to the quality conscious regulated market for future growth, the companies gradually acquired a quality focus for their activities, not only for these markets, but for the semi-regulated markets as well, say industry experts.