Indian Pharma

What is the role of multinational companies in the indianpharma industry

Multinational corporations (MNCs) in the global pharmaceutical industry have been reporting sluggish growth over the last few years, being held back by several factors including implementation of cost containment measures in developed countries, lack of strong product pipelines, and expiry of patents on existing products. Emerging markets however represent an exciting opportunity for most pharma MNCs as these markets are expected to achieve a size of U$400 billion by 2020 and Indian market is expected to grow to a size of US$40 billion by then.

The inorganic route remains one of the preferred routes for pharma MNCs looking to enter the Indian branded generics market or expand their market share therein. Through acquisition, pharma MNCs get access to a ready product basket and infrastructure, besides management capabilities in the Indian market.

Emerging markets offer better growth opportunities

The growing use of generic and branded generics drugs has led to pharma companies reorganising their strategies by focusing on the generic and branded generics business in developed as well as developing countries for higher growth. It is in this context especially that the emerging markets represent exciting opportunities as they are expected to grow at a much faster rate (CAGR of 15.2% during 2006-2020) than their developed counterpart (CAGR of 2.0% during 2006-2020. The emerging markets are expected to reach a size of US$400 billion by 2020, with India being a key market. This scenario has led to pharma MNCs reorienting their strategies and resource allocation for emerging markets. Thus they are now seeking to build up a significant presence in branded generics and over-the-counter (OTC) drugs, launch off-patent products of other innovator companies, and adopt the practice of local pricing for patented drugs so as to attain volumes and capture market share.

Indian operations of pharma...