Examine the Rapidly Growing Indian Pharmaceutical Industry and the Strategies, Trends...

Examine the Rapidly Growing Indian Pharmaceutical Industry and the Strategies, Trends and Opportunities that Future Investors Should Know

DUBLIN, Ireland--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/research/f1c7dd/indian_pharmaceuti)
has announced the addition of the "Indian Pharmaceutical Industry:
Strategies, Trends and Opportunities" report to their offering.

Indian pharmaceutical industry is undergoing fast paced changes.
The Indian Generics market is witnessing rapid growth opening up
immense opportunities for firms. This is further triggered by the fact
that generics worth over $40 billion are going off patent in the
coming few years which is close to 15% of the total prescription
market of the US.

The Indian pharmaceutical companies have been doing extremely well
in developed markets such as US and Europe, notable among these being
Ranbaxy, Dr. Reddy's Labs, Wockhardt, Cipla, Nicholas Piramal and
Lupin. The companies have their strategies in place to leverage
opportunities and appropriate values existing in formulations, bulk
drugs, generics, Novel Drug Delivery Systems, New Chemical Entities,
Biotechnology etc. The industry ranks fourth globally in terms of
volume and in terms of value, it is ranked thirteenth.

The industry has thrived so far on reverse engineering skills
exploiting the lack of process patent in the country. This has
resulted in the Indian pharmaceutical players offering their products
at some of the lowest prices in the world. The quality of the products
is reflected in the fact that India has the highest number of
manufacturing plants approved by US FDA, which is next only to that in
the US.

Multinational companies have traditionally dominated the industry,
which is another trend seeing a reversal. Currently, it is the Indian
companies which are dominating the marketplace with the local players
dominating a number of key therapeutic segments. The market is also
very fragmented with about 30,000 entities and the organized sector
consisting of about 300 entities. Consolidation is increasing in the
industry with many local players building a global outlook and also
growing inorganically through mergers and acquisitions.

The Key to success in this industry is research & development. R&D
is the starting of the industry value chain and is also the most
important value creator. Companies that involve in R&D do so in
specific areas. They chose specific therapeutic areas to target based
on their strengths in the market, and the commercial potential.

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Kinds of Research:

- Basic R&D
- Process Research Or Reverse Engineering
- Analogue Or Discovery Research
- Biotechnology Research
- NDDS Research
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R&D In India:

The Indian industry has attained cost advantages in process
research used for generic drugs & value added generics production,
which accounts for 60-80 percent of total sales. This cost advantage
is in the fact that:

- Most infrastructure facilities are much cheaper in India than in
developed countries.

- Indian scientists can be attracted at much cheaper rates than
their US counterparts.

The more value added basic research methodologies are being
pursued by very few players like Ranbaxy, Biocon & Dr. Reddys who are
willing to take the risk of investing millions in building research
capabilities and developing molecules. In the absence of product
patents Indian companies ignored basic research and concentrated their
R&D efforts toward producing drugs through alternative processes.
Consequently, total expenditure on R&D was low (multinational
pharmaceutical players spend about 13-16% of total sales on R&D).

Investments made in R&D by the Indian pharmaceutical companies
would yield 3-4 molecules a year, which is a very small number. There
is very little private initiative to invest in R&D. The government
continues to bear the burden, with industry chipping in with 10% to
12%. This also evident in the data of patent granted in the country
where the top firms granted patents are mostly MNCs. Indian industry
instead mastered the art of reverse engineering to gain competitive
advantage, as the industry structure did not provide incentives to
invest in basic research.

Indian firms have invested very little in R&D in India due to:

- Lack of Product Patent protection: The delayed adoption of TRIPS
in India is cited as the major impediment to the possible investment
by international companies in India.

- Inadequate profit base: The price control has squeezed the
profit margins making it difficult for Indian and international
companies to cull out and invest sizable sums in R&D. The
profitability of Indian companies is also much lower than
international levels. The pre-tax profit margin of pharmaceutical
companies in India is much less than 6% on sales in sharp contrast to
the 18% profit margins common to international companies.

CHANGING SCENARIO OF INDIAN R&D

The acceptance of provisions of the agreement on TRIPS is expected
to change the orientation of Indian companies towards R & D. Indian
companies have started investing in complex R & D activities like
novel drug delivery system and new drug discovery. The advantages of
conducting R & D in India are given below.

- Lower costs: R&D expenditure in India is far lower than in the
developed countries. The cost differentials are due to lower costs in
machinery and human capital. The cost advantages can only be exploited
if the necessary funds required can be sourced. Following India's
acceptance of the provision of Trade Related Intellectual Property
Rights (TRIPS) under the GATT agreement, investments are expected to
start flowing into the area of basic research.

- Population advantages: A larger population base would facilitate
clinical trials for diseases especially prevalent in developing
countries. Indian R&D efforts could be directed towards infectious
diseases that are especially prevalent in Asian countries. Such R&D
activities will be targeted towards segments such as antibiotics,
anti-parasitics and other anti-bacterials.

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Key Topics Covered:

- Pharmaceutical Products As A Percentage Of Healthcare Spending
- R&D Expenditures
- Managed Care Spends
- Generics Gaining Ground
- Blockbuster Drugs
- Structural Changes In The Industry
- Profitability
- Patent Reforms
- Traditional Medicine
- Major Therapeutic Segments
- Strategic Groups
- Multinational Pharmaceutical Firms
- Indian Pharmaceutical Firms
- R&D Capabilities
- Technology
- Patents Expiry
- New Opportunities
- Contract Manufacturing
- Contract Research
- Regulations
- Challenges
- Industry Trends
- Key Market Segments
- Key Players
- Alliances For Entry Into Us And European Markets
- Growth Of Market Share And Product Portfolio
- Marketing
- Sales Strength
- Brand Recognition
- Future
- List Of Tables
- List Of Figures
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For more information visit
http://www.researchandmarkets.com/research/f1c7dd/indian_pharmaceuti.

Research and Markets
Laura Wood
Senior Manager
press@researchandmarkets.com
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