Indian formulation mkt to cross US dollars 13.7 billion by 2013The surging demand in the domestic market coupled with an increased focus from the multinational pharma companies for contract research and manufacturing services (CRAMS) are set to fuel the Indian pharmaceutical growth in the years to come.

In addition to that, a projected CAGR of 10.5% in the global generics market and an growing involvement of Indian companies into clinical research services will further add to the growth momentum, said a detailed research done by Angel Broking.

Socio-economic factors such as rising income levels, increasing affordability, gradual penetration of health insurance and the rise in chronic diseases would see the Indian formulation market to touch $13.7 billion by 2013 with a CAGR of 12.2%.

The domestic formulation industry had registered a CAGR of 14% during FY2003-08 from around $3.9 billion to $7.7 billion, outpacing the global pharma industry growth rate of 7%, said the research. By 2015, India is expected to rank among the top 10 global pharmaceutical markets. The industry is typically growing at around 1.5-1.6x the country’s GDP growth.
 
According to the research, India is primarily a balanced generic market with no player garnering more than 5% market share. Some of the key challenges in this segment include complex drug distribution system, diverse market and rural penetration, evolving regulatory infrastructure, brand visibility and uncertainty in pricing policies. The second big factor will be that of CRAMS. Global investors are under pressure due to growing patent expiries of major blockbuster drugs, price restrictions and slowdown in new product approvals and launches. Moreover, the decline in R&D productivity has resulted in further deceleration in bringing new blockbuster drugs to the market.

Due to its value proposition, high R&D and formulations capabilities coupled with the cost advantage, Indian pharma companies are in a position to attract huge CRAMS opportunities, particularly from the US and European multinational pharma companies.
 
On the generics side, India has emerged as a prominent supplier of high quality generics drugs globally. The success can be attributed to the recognition of process patents over the last three decades. Indian companies are also amongst the preferred partners for foreign companies, which are struggling to cope up with rising R&D costs, declining productivity and approval of new product launches. By developing a broader range of service offerings, the Indian clinical research organisations (CROs) are well poised to become major players in the global CRO arena.