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The Indian Pharmaceutical Industry today is in the front rank of India¶s science-based industry with wide ranging
capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian Pharma
Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third
world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to
sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously.

Playing a key role in promoting and sustaining development in the vital field of medicines, Ê
  
Ê

 boasts of quality producers and many units approved by regulatory authorities in USA and UK. International
companies associated with this sector have stimulated, assisted and spearheaded this dynamic development in the
past 53 years and helped to put India on the pharmaceutical map of the world.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has expanded
drastically in the last two decades. The leading 250 pharmaceutical companies control 70% of the market with market
leader holding nearly 7% of the market share. It is an extremely fragmented market with severe price competition and
government price control.

The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates,
pharmaceutical formulations, chemicals, tablets, capsules, orals. There are about 250 large units and about 8000
Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector
Units). These units produce the complete range of pharmaceutical formulations, i.e., medicines ready for
consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production
of pharmaceutical formulations.

Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs and
pharmaceutical products has been done away with. Manufacturers are free to produce any drug duly approved by the
Drug Control Authority. Technologically strong and totally self-reliant, the pharmaceutical industry in India has low
costs of production, low R&D costs, innovative scientific manpower, strength of national laboratories and an
increasing balance of trade. The Pharmaceutical Industry, with its rich scientific talents and research capabilities,
supported by Intellectual Property Protection regime is well set to take on the international market.
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‰      India has a pool of personnel with high managerial and technical competence as also skilled
workforce. It has an educated work force and English is commonly used. Professional services are easily available.

‰
 
 

 Its track record of development, particularly in the area of improved cost-
beneficial chemical synthesis for various drug molecules is excellent. It provides a wide variety of bulk drugs and
exports sophisticated bulk drugs.
„       India has a 53 year old democracyand hence has a solid legal framework and
strong financial markets. There is already an established international industry and business community.

Ê      It has a good network of world-class educational institutions and established strengths
in Information Technology.



  The country is committed to a free market economy and globalization. Above all, it has a 70 million
middle class market, which is continuously growing.

‰

  For the first time in many years, the international pharmaceutical industry is finding great
opportunities in India. The process of consolidation, which has become a generalized phenomenon in the world
pharmaceutical industry, has started taking place in India. m
mm Ê Êm
‰      India has a pool of personnel with high managerial and technical competence as also skilled
workforce. It has an educated work force and English is commonly used. Professional services are easily available.

‰
 
 

 Its track record of development, particularly in the area of improved cost-
beneficial chemical synthesis for various drug molecules is excellent. It provides a wide variety of bulk drugs and
exports sophisticated bulk drugs.

„       India has a 53 year old democracyand hence has a solid legal framework and
strong financial markets. There is already an established international industry and business community.

Ê      It has a good network of world-class educational institutions and established strengths
in Information Technology.



  The country is committed to a free market economy and globalization. Above all, it has a 70 million
middle class market, which is continuously growing.

‰

  For the first time in many years, the international pharmaceutical industry is finding great
opportunities in India. The process of consolidation, which has become a generalized phenomenon in the world
pharmaceutical industry, has started taking place in India.

   ‰mÊ

India's US$ 3.1 billion pharmaceutical industry is growing at the rate of 14 percent per year. It is one of the largest
and most advanced among the developing countries.

Over 20,000 registered pharmaceutical manufacturers exist in the country. The domestic pharmaceuticals industry
output is expected to exceed Rs260 billion in the financial year 2002, which accounts for merely 1.3% of the global
pharmaceutical sector. Of this, bulk drugs will account for Rs 54 bn (21%) and formulations, the remaining Rs 210 bn
(79%). In financial year 2001, imports were Rs 20 bn while exports were Rs87 bn.

    Ê


Indian companies need to attain the right product-mix for sustained future growth. Core competencies will play an
important role in determining the future of many Indian pharmaceutical companies in the post product-patent regime
after 2005. Indian companies, in an effort to consolidate their position, will have to increasingly look at merger and
acquisition options of either companies or products. This would help them to offset loss of new product options,
improve their R&D efforts and improve distribution to penetrate markets.

Research and development has always taken the back seat amongst Indian pharmaceutical companies. In order to
stay competitive in the future, Indian companies will have to refocus and invest heavily in R&D.

The Indian pharmaceutical industry also needs to take advantage of the recent advances in biotechnology and
information technology. The future of the industry will be determined by how well it markets its products to several
regions and distributes risks, its forward and backward integration capabilities, its R&D, its consolidation through
mergers and acquisitions, co-marketing and licensing agreements.

   ‰mÊ

India's US$ 3.1 billion pharmaceutical industry is growing at the rate of 14 percent per year. It is one of the largest
and most advanced among the developing countries.

Over 20,000 registered pharmaceutical manufacturers exist in the country. The domestic pharmaceuticals industry
output is expected to exceed Rs260 billion in the financial year 2002, which accounts for merely 1.3% of the global
pharmaceutical sector. Of this, bulk drugs will account for Rs 54 bn (21%) and formulations, the remaining Rs 210 bn
(79%). In financial year 2001, imports were Rs 20 bn while exports were Rs87 bn.

    Ê


Indian companies need to attain the right product-mix for sustained future growth. Core competencies will play an
important role in determining the future of many Indian pharmaceutical companies in the post product-patent regime
after 2005. Indian companies, in an effort to consolidate their position, will have to increasingly look at merger and
acquisition options of either companies or products. This would help them to offset loss of new product options,
improve their R&D efforts and improve distribution to penetrate markets.

Research and development has always taken the back seat amongst Indian pharmaceutical companies. In order to
stay competitive in the future, Indian companies will have to refocus and invest heavily in R&D.

The Indian pharmaceutical industry also needs to take advantage of the recent advances in biotechnology and
information technology. The future of the industry will be determined by how well it markets its products to several
regions and distributes risks, its forward and backward integration capabilities, its R&D, its consolidation through
mergers and acquisitions, co-marketing and licensing agreements.
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The workforce and technological proficiency of pharmaceutical companies in India ensures the growth of the industry
on a global scale as well as within India. The sector is predicted to value about $3.1 billion (USD).

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In the year 2008, Indian pharmaceutical market was assessed at $7,743m which witnessed an augmentation of 4.0%
over 2007. Business observers predict that the Indian pharmaceutical market will escalate at an increasing mode as
compared to the global pharmaceutical market, at a CAGR of 13.2% during the fiscal years 2009-14 to reach an
overall worth of $15,490m in 2014.

India has also appeared as the preferred location for the pharmaceutical companies of the world because of its
towering growth scenario furnished by elderly population, alteration in disease profile, developing patent system and
socio-economic circumstances.

The competition in the Indian pharmaceutical market is cutthroat and the market is divided among the top 10 pharma
companies accounting for 36.1% of the overall R&H sales in the fiscal year 2008.

India began to abide by the World Trade Organization's Trade Related Aspects of Intellectual Property Rights (WTO-
TRIPS) agreement and acknowledged product rights after the revision of the Indian Patent Act in January 2005.
Indian firms are laying out strategies to benefit from the Japanese government proposal to endorse generic drugs to
minimize healthcare charges.

R 
 „
 

By sales India's largest pharma firm with the returns touching Rs 4,198.96 crore (Rs 41.989 billion) in 2007
R  


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With a turnover of Rs 4,162.25 crore (Rs 41.622 billion) in 2007, Dr Reddy's lab is second largest drug firm in
India by sales .
R ‰ 
Cipla generated an annual revenue of Rs 3,763.72 crore (Rs 37.637 billion) in 2007 making itself the third
largest pharmaceutical firms.
R    

Sun Pharma Industries had an overall earnings of Rs 2,463.59 crore (Rs 24.635 billion) in 2007.
R „   „


Lupin Labs yielded total profit of Rs 2,215.52 crore (Rs 22.155 billion) in 2007.
R m 

 
India's sixth largest pharma company by sales, Aurobindo posted Rs 2,080.19 crore (Rs 20.801 billion) annual
returns in 2007.
R   
With 2007 turnover touching Rs 1,773.41 crore (Rs 17.734 billion, GSK is India's seventh largest pharma firm.
R ‰
 
Cadila's earnings was Rs 1,613.00 crore (Rs 16.13 billion) in the fiscal year 2007, establishing itself as India's
eight largest drug company.
R m 
 
With an annual revenue of Rs 983.80 crore (Rs 9.838 billion) in 2007, Aventis Pharma has made a place for
itself in the top ten pharma companies in India
R Ê  „
 

Ipca is India's 10th largest pharma company by sales and in 2007 it had a turnover of Rs 980.44 crore (Rs
9.804 billion)

 


        
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R Failure of the new patent system: Prerequisites associated with Sec 3(d) of the Patent (Amendment) Act 2005
restrict the copyright of an existing drug. Moreover, mandatory licensing permits Indian companies to keep
producing generics of copyright products for overseas selling to underdeveloped nations.Y
R Lack of proper infrastructure: Issues associated with regular power cuts and lack of suitable transport
infrastructure will decelerate the expansion of the sector.
R Inadequate funds: Restricted funding from FIs, venture capitalists and the government may decelerate the
expansion of biotechnology sector in India.
R Regulatory impediments: Rising of due meticulousness and conformity with product standards leads to high
costs and interruption in the launch of new products.
R Severe competition: Low margins and restricted capital to assist R&D is the result of intense pricing
competition among local producers. This rivalry will further deepen from the joining in of the big drug
companies in the Indian market to control the cost benefit and large reserve sources.

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