The worldwide production of active pharmaceutical ingredients or bulk drug, totaled US$70.81 billion in 2004-and expected to touch US$77.33 billion in 2005. The global production of bulk drugs grew at a CAGR of 9.2 percent during the last five years.
The production of bulk drugs is estimated to have touched 477.69 million kg in 2004 and forecast to reach 501.58 million kg in 2005. The production volume has increased at a CAGR of 5% over the last five years, says a study conducted by Cygnus Business & Consulting Research, Hyderabad.
The active pharmaceutical ingredients (APIs) industry provides inputs to three segments -branded prescription drugs, over-the-counter (OTC) drugs and generic prescription drugs. The branded prescription drug segment with a market size of US$61.26 billion, accounted for 86 percent of the total bulk drug consumption in 2004, while OTC and generic prescription drugs accounted for 9 percent and 5 percent of the total bulk drug consumption in 2004, respectively.
Issues and challenges
Some of the key issuesfaced by the bulk drug industry are as follows
1) Overcapacity
2) Competition on the cost front
3) Undifferentiated capabilities
4) Backward Integration of Research-based companies
5) Coping with changing disease profile
6) Depreciating US dollar puts pressure on realizations
7) Varying regulatory requirements lead to additional costs
Outlook
The bulk drug consumption of generic prescription drug segment will grow at an annual rate of about 12 percent to US$3.7 billion in 2005, followed by over-the-counter drugs segment, where bulk drug consumption will increase 10 percent to US$7.1 billion. The bulk drug consumption of branded prescription drug segment is likely to grow by 9 percent to US$67 billion.
India can grow as a major provider of APIs in world pharmaceutical market despite the perceived threat from China. Its strengths in R&D and intellectual property can really help India to establish as major generic supporter to regulated markets.
-- Compiled from the latest Industry Insight - Global Bulk Drugs by Cygnus Business & Consulting Research, Hyderabad