The domestic pharmaceutical market is expected to triple to $20 billion by 2015 from the current $7 billion and move into the world’s top 10 markets.
This commercial component of India is also influencing India’s attractiveness as a clinical trial destination. These are the findings of a FICCI-Ernst & Young Report on Compelling Reasons for Doing Clinical Research in India.
According to the report, by 2015 MNCs with patented drugs could account for $8 billion in the domestic pharmaceutical market, nearly 8-10 per cent of the total market.
The report highlights the product patent regime set up in 2005 as one of the primary reasons for the potential of growth. The patent infrastructure in the country has been upgraded over the past few years to support new laws.
Another contributing factor to the high growth expected in the pharmaceutical market is that the population in the highest income class is expected to grow to 25 million in 2015 from 10 million. This is expected to drive the affordability of high value patented drugs.
Along with the growing market, the allied services to the pharmaceutical industry are also growing at 21 per cent annually as compared to 7.5 per cent globally. Due to its proven track record of managing IT/ITeS work and growing domain expertise, India has emerged as the hub for outsourcing services allied to the pharmaceutical industry.
India also offers a significant cost advantage as compared to developed and emerging economies. The cost of these activities in India is typically 40-60 per cent lower than in developed countries and around 10-20 per cent lower than in other emerging economies.
At least eight of the top 10 pharma companies are carrying out one or more allied services in India, either by setting up captive centres or through tie-ups with Clinical Research Organisations and IT/ITeS companies.