A highly organized sector, the Indian pharmaceutical industry is estimated to be worth $4.5 billion, growing at about 8% to 9% every year.
The pharma industry in India ranks very high in Third World countries, in terms of technology, quality and range of medicines manufactured.
Globally the Indian pharmaceutical industry ranks fourth in terms of volume (with an 8% share in global sales), 13th in terms of value (with a share of 1% in global sales) and produces 20% to 24% of the world’s generic drugs (in terms of value).
The Indian pharmaceutical sector is highly fragmented. It has more than 20,000 registered units and faces severe price competition along with government price control. The pharma industry has grown exponentially in the last two decades.
As many as 250 leading pharmaceutical companies control over 70% of the market, with the market leader holding nearly 7% of the market share.
India is emerging as the global hub for contract research and manufacturing services due to a combination of low-cost and world-class quality standards.
According to a study by Ernst & Young, the total market for clinical research activities in India is expected to touch $1.5 billion – $ 2 billion by 2010.
With pharma majors facing increased pressure on profit margins, spiralling R&D costs and rising overheads, outsourcing of clinical research processes to third parties in developing countries seems a viable option.
By contracting such work to India, they save 40% to 60% in new drug development. Consumer spending on healthcare went up from 4% of GDP in 1995 to 7% in 2007. That number is expected to rise to 13% of GDP by 2015.