Escolar Documentos
Profissional Documentos
Cultura Documentos
A
MAL
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A MAL
ANIM
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HE
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THC
CARE
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Sec
ctoral Reporrt, 200
09
Contents
3-4
Market size
Major players
Exports
ANIMAL HEALTH CARE:
4-6
Market size
Major players
SEGMENTATION:
7-9
Based on species
Based on products
MARKET COMPOSITION
10-14
MARKET DRIVERS
15-16
16-17
CHALLENGES
17
OPPORTUNITIES
18
OUTSORCING AS AN OPPORTUNITY
19-21
-Big Pharmaceuticals
-Mid-Sized Pharmaceuticals
FUTURE
21
Page|2
Industry Overview
The Indian pharmaceutical industry is a success story providing employment for millions
and ensuring that essential drugs at affordable prices are available to the vast population of
this sub-continent.
Richard
Gerster
The Indian Pharmaceutical Industry today is in the front rank of Indias science-based
industries with wide ranging capabilities in the complex field of drug manufacture and
technology. India stands at the 4th position in terms of volume (8% of world's production),
13th in terms of value, and 17th in terms of pharmaceutical export value in the global
pharmaceutical industry.
Market Size
Indian Pharmaceutical Industry is estimated to be worth 34,000 crore, growing at about a
CAGR of 8 to 9 percent. Indian pharmaceutical industry is expected to reach the value of
US$ 12 billion by the year 2010. The domestic market of Indian pharmaceutical is expected
to grow at rate of 12-13%. Drug sales to retail consumers grew by 9.8% to $6.98bn (34,000
crore) in the calendar year 2008, according to research firm ORG IMS research.
The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered
units. The market is highly fragmented with only 300 companies being in the organised
sector and controlling 70% of the market with market leader holding nearly 7% of the market
share. It is an extremely fragmented market with severe price competition and government
price control.
Major Players
The domestic pharmaceutical market is quite fragmented with the top five companies
commanding only 22% market share. Cipla Ltd has become the largest and the fastest
growing company among the top five companies, outclassing Ranbaxy Laboratories Ltd.
Even the top 20 companies have a total market share of about 57% only in contrast to the
global drug market dominated by the 10 largest companies that account for about 40% of
global sales.
Page|3
Size($ billion)
Market share(%)
Growth rate(%)
6.9
100
9.9
Cipla
.36
5.3
13.4
Ranbaxy
.34
5.0
11.5
Galaxo Smithkline
.29
4.3
-1.2
.27
3.9
11.7
Zydus cadilla
.24
3.6
6.8
Total top 5
1.53
22.1
Market Structure
The structure of individual markets varies widely, reflecting a combination of factors such as
climate, the prevalence of particular animal diseases and the relative importance of individual
species to national livestock agriculture. Products for use in companion animals are
responsible for over half of all sales in some developed markets such as the US and UK, but
generate less than 5% of sales in emerging markets such as China and India, for example.
The US will remain the animal health industry's main growth engine, with sales to rise at a
compound annual rate of 5%. The US will be responsible for 40% of global market growth,
and will reach a value of US$8 billion by 2010. China will cement its position as the world's
second largest market for animal health products, while Brazil will replace France as the
sector's third biggest market.
Major Players
One of the silent contributors to the balance sheets of some Indian pharmaceutical companies
is the animal healthcare market. Off late, for a variety of reasons, there has been a paradigm
shift from being a silent player to a more aggressive positioning.
In India
Zydus Cadila
Alembic
Vetnex
Virbac Animal Health India
Intas Pharmaceuticals
Intervet India
Concept Pharmaceuticals
Wockhardt
Page|5
industry competition
intensely competetive
and highly fragmented
Page|6
Segmen
ntation Bassed On Speccies
Livesttock
Annimal Health
H
C
Care
Comp
panion
n Animaals
Poulttry
Poultryy
t
India iss worlds 4th
largest prroducer of eggs and 5th largest broiler prodducer. The poultry
Prod
duction( million
m
tonne)
2003-044
2.1
2004-055
2.2
2005-066
2.3
2006-077
2.3
2007-088
2.6
Source:: Indiaagristtat.com
Page|7
Poultry contributes a huge share of 38% of the animal health care market. In poultry, growth
is mainly projected in segments like pelleted feeds, vitamin premix and fed additives like
enzymes, pro-biotic, toxin binders, amino acids and coccidiostat.
Livestock
The ""livestock"" segment, a high-volume market that represents around 57% of the
international animal health market is guided mostly by economic concerns as the market has
to meet the growing demand in protein requirements in developing countries. Increase in
demand for protein inevitably leads to increase in demand for food-producing animals.
The cattle population for CY 2009 is forecast at 281.4 million head, continuing the multiyear
declining trend. However, the decline is specific to the cow population only and not to
buffalo population. The production of milk in India has been estimated as 104 million tonne
for the year 2008 in comparison to the world production of 684 million tonne (as per Indian
dairy association). Post forecasts, the CY beef production up by 4.5 percent to 2.7 million
tons (USDA FAS Livestock and Products Annual 2008 report) as it is cheapest compared to
all other meats. Demand for Indian buffalo meat is gradually growing in export markets due
to its cost competitiveness, perceived organic nature and proportion of less fat.
Companion Animals
Products for use in companion animals have been the main driver of growth in the world
market for veterinary pharmaceuticals and vaccines since the mid-1990s. Growth of the
global market for companion animal health products is forecasted at a compound annual rate
of 4.9% in the period to 2010 (at actual prices, and calculated at constant rates of exchange),
with sales in the sector reaching $8.6 billion in 2010.
The current overall size of Indian pet care and pet food market, in terms of current price
value, is Rs 1739.9 million, expecting to grow up to Rs 3,687.5 million by 2012. Of this, the
pet care segment occupies Rs 507.5 million. Pet care market accounts for all categories of
products ranging from toys to grooming products like shampoo, harnesses, collars, etc. Yearon-year average CGAR of pet shops in India accounts for 0.4 percent during 2002-07.
The common factors that will act as drivers or constraints on rates of growth in the
companion animal products market during the second half of this decade include companion
animal populations; economic, social and demographic trends; new products and
Page|8
technologies; promotion and marketing strategies; companion animal health and disease
trends; patent expiries and generic penetration of the companion animal products market;
product safety issues; regulatory factors; and companion animal health insurance.
In companion animal products, the market is relatively concentrated, with almost two-thirds
of global sales by value generated by ten leading companies. Merial is the outright market
leader, claiming a share of almost 17%, while Pfizer is its closest competitor with a 12%
share. Bayer, Novartis and Fort Dodge complete the top five rankings.
Indian leading pet care companies, which are predominantly sub-divisions of pharma majors,
are significantly contributing to the booming industry. Major players like Vetnex-RFCL,
PetCare, Venkys Pet, Intas, and Pfizer are potential boosters of the growing pet care market.
Their products, which are categorised from premium and super premium range, are widely
distributed all over India covering the countrys remotest regions.
Page|9
TH
HERAPEU
UTICS
VACCIN
NES
ANIIMAL HE
EALTH CA
ARE
FEE
ED ADDIITIVES
%A
AGE SHAR
RE OF DIF
FFERENT PRODUCT
P
T SEGMEN
NTS
25%
%
feeedadditives
55%
20%
v
vaccines
therapeutics
Sourcce: OPPI
Page|10
P
The animal health industry is responsible for maintaining the health and productivity of the
over 3.3 billion livestock and 16 billion poultry worldwide, and ensuring the wholesomeness
and abundance of the food they produce. In addition, the industry must also cater to the health
and well being of companion animals. Despite this, the human healthcare market is 35 times
larger than the combined market for all nonhuman species. The reality is that the global
animal health market is very complex, operating under stringent and increasingly strict
regulations similar to those for human health, yet the market opportunities are considerably
smaller. In an increasingly risky environment for new product development, the difference
between success and failure in the future usually lies in successfully identifying the next
growth segment, developing the right product candidates, and being the first to market.
Despite all these risks, the industry continues to grow.
In contrast to human blockbuster-oriented pharmaceuticals, animal health is dominated by
large numbers of products with small revenues. Although there are hundreds of products
involved in this market, only about 20 products have sales exceeding $100 million per year.
However, the industry continues to forge on. The fastest growing therapeutic categories are in
the area of companion animals, specifically in the arthritis and pain segments of the market.
Antiparasitics In Animal Health IndustryCompanion animals and all of the major livestock species are exposed to challenge from a
broad range of parasites. Most compromise the health and wellbeing of animals directly,
while some present broader risks by acting as vectors for other pathogens. In livestock,
parasite infestations exert a major impact on levels of productivity and profitability. Losses
inflicted on producers at a global level run to many billions of dollars (liver fluke infestation
alone causes losses of an estimated $3 billion worldwide).
The main weapons available to farmers and companion animal owners in the fight against
parasites are chemotherapeutic drugs which either kill parasite populations or prevent the
development of immature parasites into adult forms. Parasites that survive the application of
these products are those with a natural tendency to resistance against the active ingredient or
class in question. Over time, this results in the development of resistant populations. Drugs
from different chemical classes are used in rotation programmes to slow the development of
Page|11
resistance, but the efficacy of some major antiparasitic groups against certain parasite species
has nevertheless declined significantly as a result of resistance. This is driving the search for
new chemical classes, and has also encouraged continued efforts to develop alternative
parasite control methods, including immunological approaches.
It has been a major source of growth in real terms over the past 10 years - due in large part to
the impact of new products commercialised in the companion animal ectoparasiticides
segment.
While new products have boosted values in the companion animal ectoparasiticides segment,
sales in other parts of the market have been affected by growing generic penetration of the
market. Ivermectin has been the most popular target for generic manufacturers since Merial's
patents on the molecule began to expire in major developed markets towards the end of the
1990s. Patents on several other leading antiparasitic brands have also expired during the past
five years, however, generic penetration of the antiparasitics market is set to increase further
through the remainder of this decade, as exclusivity periods for a number of other key
products reach an end.
With generic penetration expected to offset the impact of new drug launches in the sector,
increases in market value will be dependent largely on broad economic conditions and the
operating environment facing livestock producers in major markets. The further development
of existing products, through the application of formulation and delivery technologies or the
commercialisation of multi-ingredient treatments, will also help to bolster market values.
Real growth across the antiparasitic sector as a whole will be limited in most major markets,
however, and gains at global level are forecasted at a modest 2.5% a year, with sales expected
to total just under $5.3 billion in 2009.
Just as a relatively small number of major markets generate major shares of the total global
antiparasitic sales, so the sector is also dominated by a handful of companies. Merial alone
realises annual sales of more than $1.1 billion in the antiparasitics market, giving it a share in
the sector of almost 25%, while seven leading companies are responsible together for
approximately 62% of global antiparasitic product sales. While substantial shares of the
market are concentrated in the hands of a few market leaders, the antiparasitics sector is
becoming increasingly crowded as patents on major products expire. The range of companies
attempting to cash in on new generic opportunities is extremely broad, but a few specialist
generic manufacturers have emerged as major players in the sector.
Page|12
impact on the pet food industry where manufacturers were able to identify a variety of
substances that could be employed in order to add value to their existing product lines, or to
develop new fortified food products.
There are generally three types of companies producing nutraceuticals for animals, the
dedicated nutraceutical manufacturers including herbal specialists, the pet food companies,
and the pharmaceutical manufacturers including both R&D-based and generic companies. All
these different types of companies have their different angles to access the new segment of
nutraceuticals for animals. While in the early stages of this industry sector, nutraceuticals for
animals were produced mainly by small-scale or niche manufacturers, both pharmaceutical
and nutritional companies have had an enter in this segment, with varying success. Those that
have managed to gain a stronghold in this market certainly have injected respectability, more
vigorous competition and technical knowledge into it.
Global Animal Health Market: Emerging Markets Driving GrowthThe animal health market is growing, albeit at a slower rate, in the recessionary economic
phase. Two factors are working in favour of the industry - pet owners' love for their
companion animals and the economic reasons for the treatment of livestock or farm animals.
The ""livestock"" segment, a high-volume market that represents around 57% of the
international animal health market is guided mostly by economic concerns as the market has
to meet the growing demand in protein requirements in developing countries. Increase in
demand for protein inevitably leads to increase in demand for food-producing animals.
Emerging markets such as Eastern Europe, Latin America and Asia are witnessing an
increase in share of the total pie of the animal health industry because of the increasing
importance given to animal health by the livestock breeders. As these regions are showing
very strong economic growth in the past few years, livestock breeders are giving due
importance to the better management of livestock to cater to the growing nutritional needs of
populations. But with various kinds of diseases reducing global animal production, animal
healthcare is gaining significant importance. Emerging economies thus offer significant
potential for animal health industry in the near future.
Page|14
The mature markets of North America and Western Europe, however, are supporting the
growth of animal health market as these regions are characterized by strong growth,
particularly in the ""companion animals"" sector.
The animal health market is highly concentrated, with the top nine players controlling more
than 80% of the total market. Recent acquisitions of Fort Dodge (Wyeth) by Pfizer and
Intervet by Schering-Plough have further consolidated the market.
Market Drivers
The reasons which have attracted different pharmaceutical industries to venture into animal
health care.
The robust growth pattern displayed by the poultry segment and the sheer size of the
cattle population has contributed largely to the growth of the animal health care
market.
The 2009 annual report of the International Federation for Animal Health (IFAH), a
global body representing manufacturers of animal health products, stated that global
demand for animal protein is expected to rise by 50% by 2020 as the animal
population grows, and as more households in emerging economies join the worlds
middle classes.
With increasing awareness about diseases that are spreading from unhealthy livestock
and poultry to humans like bird flu, livestock owners are showing increased interest to
ensure that their cattle are properly cared for. It is this growing awareness in emerging
economies like India that is attracting pharma companies.
Growing demand for new products and industry's investment in awareness of pet
owners. Although animal population has increased only marginally, the key driver for
growth is the willingness of owners to spend more on the health of their animals and
the ability of veterinarians to meet that need. The human-pet bond has a high
economic ceiling, and both veterinarians and the animal health industry have
recognised the potential of this market segment.
Page|15
There are certain factors which can account as heyday for animal health care industry in
future:
Product development for certain segments like parasiticides for companion animals.
Increased shopping at retail outlets and through internet and over-the-counter (OTC)
products posing stiff competition to prescription.
Increased spending, better pet monitoring services, pet insurance, and owner lifestyles
will also shape the growth of the animal healthcare market.
Growth of organised dairy production and changing focus of farmers from treating to
preventing diseases.
Concept Pharmaceuticals promotes their products through specialised and welltrained veterinary sales officers located in different parts of the country. Their strategy
is based on direct contact with consumers and indirect selling through veterinarians,
livestock supervisors etc organising farmer meetings in rural areas and selling
preventive vaccination and de-worming generates demand for our products through
these customers.
Intas animal division has its own full-fledged marketing and sales strength, which
constantly inject promotion, techno-commercial services and awareness delivery to
veterinarians, dairy farmers and various rural based customer segments. provide wellappointed distribution network of chemists and dealers who smoothly disseminate the
entire product basket in urban, semi-urban, village towns and micro-interiors levels
Co-marketing efforts with milk co-operative societies and various NGOs also create a
vital channel that helps players penetrate the grass-root levels.
Customer segmentation based on products and wider coverage plans to call veterinary
doctors, associated paramedicals, trade channel partners and farmer meetings on
regular basis remains a key strategic essence to generate business
Challenges
The animal healthcare market faces challenges due to the fragmented nature of cattle
population and increasing distribution costs for animal health products. Stakeholders like
integrators in animal health business and established manufacturers of animal health
products, especially for the livestock segment, also pose challenges for pharmaceutical
companies who have animal health portfolios. Pharmaceutical companies who want to tap
veterinary markets, they may find it challenging because only the veterinary companies
would be able to provide enough resources in competitive markets. Patent expiration along
with pipeline products without ensured success, has created enormous pressure for big
players.
Page|17
Opportunities
A major portion of livestock population is devoid of effective veterinary services. India has a
pool of personnel with high managerial and technical competence along with skilled and
educated work force. Professional services are easily available. India has competitive
advantage in contract manufacturing due to- relative low cost of production availability of
raw material at competitive prices. It has a good network of world class education institutes
and established strengths in information and technology. Increase in the disposable income
both at rural and urban level is another impetus for the growing animal health care industry.
Changing lifestyle and increasing human- pet bond relationship where pharmaceutical
companies can cash upon. Indias commitment to free market economy and globalisation is
welcome opportunity for the multinational companies in the animal health care.
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Page|20
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Survey by:
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Future
Extensiive rise in annimal healthhcare may mark
m
a good future forr this markeet. The pet and
a aqua
(fisheriees) segmentts are tomorrrow's markkets, while poultry
p
will remain at tthe centre of animal
health industry,
i
ass the functioonal foods market
m
is liikely to groow even in India. Therrefore in
India, growth
g
of poultry
p
and pet segmennts will disstinguish annimal healthhcare markeets from
other markets.
m
Thhough this market seeems to have high growth potenttial, it need
ds to be
tempereed with cauution. Potenntial in anim
mal health business
b
is always attaached to sensitivity
with coonsumers, policy
p
marrkers, healthhcare autho
orities and beneficiariies. Hence, animal
health industry
i
neeeds strategic directionn and navig
gation to coontinuouslyy grow and acquire
sizeablee market shaare.
Page|21
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