Today, India is recognized as one of the leading global players in pharmaceuticals. Driven by the knowledge skills, growing enterprises, low costs, improved quality and buoyant demand (both domestic and international), the pharmaceutical sector's value of output grew more than tenfold from US$ 1.1 billion in 1990 to over US$ 12.4 billion during 2005-06.
The future of the Indian pharmaceutical sector looks extremely positive with contract research and clinical trials businesses taking wing, and the new patent regime opening fresh avenues for players in the country.
Globally the Indian industry ranks 4th in terms of volume (with an 8.0 percent share in global sales) and 13th in terms of value (with a share of 1.0 percent in global sales). It is a science-based industry with wide ranging capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian pharmaceutical industry is estimated to be worth US$ 4.5 billion, growing at over 9.0 percent annually. According to a latest report titled "India Pharma 2015: Unlocking the Potential of Indian Pharmaceutical Market the Indian drug market is expected to grow to US $ 20 billion in annual sales by 2015. India will be one of the world's top 10 pharmaceutical markets by 2015 by replacing Brazil, Mexico, South Korea and Turkey.
Indian pharmaceutical companies produce about 20-22 percent of the world’s generic drugs (in terms of value). Overall, the industry is expected to grow at an average annual rate of about 15 to 20 percent between 2005 and 2010.
India's pharmaceutical companies are gearing up to become major global players, not only in producing low-price generic medicines but also as innovators in drugs and vaccines. India now supplies almost all the country’s demand for formulations and nearly 70 percent of demand for bulk drugs. India is also one of the top five active pharmaceutical ingredients (API) producers (with a share of about 6.5 percent) and has the world’s third largest manufacturing industry valued at US$ 2 billion.
Some of the major trends that are expected in the future include mergers and acquisitions in the industry; new product launches by MNCs and Indian companies; in-licensing of patented products by Indian companies to launch them in the Indian market and increase in the number of contract research organisations. There are about 34 foreign drug companies engaged in the Indian pharmaceutical industry and among them are 15 of the 20 largest pharmaceutical companies in the world.
Indian Pharmaceutical industry has been recognized as a reliable source for drugs and drugs intermediates and pharmaceuticals formulations. Strong scientific and technical manpower and pioneering work done in process development have contributed to this. Indian exports are destined to more than 200 countries around the globe including the highly regulated markets of the US, Europe, Japan and Australia. Exports constitute nearly 40 percent of the production with formulations contributing 55 percent and bulk drugs 45 percent. The industry ranks 17th in terms of export value of bulk actives and dosage.
The industry comprises large, medium and small-scale operators out of which some 300 companies together account for nearly 90 percent of the domestic market, while the rest is accounted for by a large number of small and medium companies which total about 9,000 units.
India, with second largest population in the world, and with every sixth patient in the world being an Indian, is going through an upheaval economically, socially and scientifically. Increasing globalization has brought about fundamental changes in the way clinical trials are conducted here. India's total contract research revenues amount to just USD 75 million, but is expected to grow at 23.6 percent CAGR, hitting US $ 175 million by end 2010.
India has emerged as an attractive destination for outsourcing research services owing to its low cost manufacturing, lower cost of R&D personnel, lower capital and operational costs for quality infrastructure of international standards. Over 15 prominent contract research organizations (CROs) are now operating in India.
India offers a huge cost advantage in the clinical trials domain compared to Western countries. The cost of hiring a chemist in India is one-fifth of the cost of hiring a chemist in the West. Players in the region are made up of a few large multinational companies (MNCs), as well as subsidiaries of global international CROs, such as Quintiles and Covance; tie-ups between global CROs and local Indian CROs, such as the one between US-based Parexel and Synchron Research Services; as well as stand-alone Indian CROs, such as Siro Clinpharm; and offshoots of Indian pharma companies, such as Well Quest.
The global pharmaceutical industry is at the cross roads, with many of the blockbuster drugs getting off-patented and with increasing R&D costs, it is hard the companies to maintain their bottom-line and remain unaffected. They have found recourse to outsourcing some of their research and manufacturing activities and saving cost in the process.