In spite of stringent regulatory norms, complexities and other challenges, India presents lucrative opportunities for international companies across the entire value chain right from discovery R&D to clinical research to manufacturing. The industry’s performance is proved by unimaginable export growth rates. “The pharmaceutical industry is worth $1.7 billion and is expected to grow at a healthy rate in the years to come,” said Dr Appaji, executive director, Pharmexcil.

With regard to Indian market scenario, the country offers a huge opportunity in terms of local market size as well as capabilities to expand into international markets. While currently MNCs' sales represent 25 per cent of the domestic pharmaceuticals market, it is estimated that their share would rise to 35 per cent by 2015. In fact MNCs have already brought several molecules to India through licensing arrangements.

Global pharma majors are in the midst of a crisis with a decline in the number of blockbuster drugs, low R&D productivity and patent expiries. Further, they are facing governments at home markets who intend to bring down healthcare costs, as they are under pressure from insurance companies and patient organisations. This has driven companies to develop global partnerships with an objective to increase penetration and de-risk their portfolios.

The partnerships of three kinds have been witnessed in the recent past. One is increased penetration of the co-marketing alliances as happened in the case  of GSK and Dr Reddy’s. The second is Daiichi Sankyo’s acquisition of majority stake in Ranbaxy to penetrate the Indian markets and the third is increasing stake and de-listing by global parents in their local arms like that of Matrix in India.

The rural and semi rural markets in India are having huge future potential. Although disease prevalence rates and patterns in Tier-2 and rural areas are similar to those of urban areas, 85 per cent of the product portfolio sold in rural markets is for acute care, creating a strong latent demand for chronic care. The fact that this market is expected to grow at 15 per cent per annum driven by rising income levels and growth of private insurance and government initiatives, companies have established dedicated rural marketing divisions and adopted focused marketing strategies to tap the market. With the governments focus on increasing the purchasing power of rural India, this market would witness a high growth in the future.

The chronic segment has been the fastest-growing segment, with drugs for the treatment of diabetes, hypertension and cholesterol driving growth or most companies in India. The India OTC market is valued around $3 billion and is expected to grow at a rate of 6.3 per cent for the five year period during 2006-2011. This will offer yet another attractive growth opportunity driven by increasing Fast-Moving Health Goods (FMHG).