Financial Analysis

Overview of Indian Pharmaceutical Industry

The Indian pharmaceutical industry (IPI) ranks 3rd in terms of volume and 14th in terms of value globally. The pharmaceutical industry in India is valued at US$ 12 billion with CAGR of 10-11 per cent. The industry spends around 6-9 per cent of its revenue on research and development (R&D). In India, the clinical research industry is estimated to be a US$ 2.2 billion with a healthy CAGR of 23 per cent. India is ranked as the third largest emerging market and is growing fastest in conducting number of trials. The Indian drug consumption market is backed by a combination of sustainable factors like growing population, improving healthcare awareness and increasing per capita income along with government reforms.

Moreover, India is expected to join the league of top 10 global pharmaceuticals markets in terms of sales by 2020 with the total value reaching US$ 50 billion, according to a report by PricewaterhouseCoopers (PwC).

The drugs and pharmaceuticals sector attracted foreign direct investments (FDI) worth US$ 4.84 billion between April 2000 and May 2011, according to data published by Department of Industrial Policy and Promotion (DIPP) up to May 2011.

• Active Pharmaceutical Ingredients (APIs): India ranks among top five API producers, accounting for ~ 6.5 percent of the world’s API production.

• Formulations (Generics): There is an unprecedented global wave of genericisation and India is well positioned to leverage this opportunity, as is witnessed by the increasing ANDA filings and improving compliance standards.

The exports market is a key driving force accounting for ~ 54 percent of the total market.

Value Proposition and Growth Drivers

Rich product portfolios

Most of the sourcing agreements between global and Indian players are to leverage the rich product portfolios. For example: Pfizer’s commercialization deals with Aurobindo (75 drugs and 12 injectables and with Strides (sterile products). Another...