• The pharmaceutical industry develops,

produces, and markets drugs licensed for

use as medications. Pharmaceutical
companies can deal in generic and/or
brand medications.

Pharmaceutical Industry - Indian

2
Perspective
 Pharmaceutical Industry - Worldwide
• 2008:
– Year for addressing structural and operational issues
– Determining where future growth will be found
– Positioning the industry for reform and other
changes
• Beginning of 2009, Global Pharmaceutical
Market – Major state of flux
• Pharmaceutical usage continued to expand,
albeit more slowly than in previous years
• Generics continued to pick up market share
globally
Pharmaceutical Industry - Indian
3
Perspective
 Pharma Industry Growth Rates
Worldwide
• US Pharma Market (comprising 47% of the
global pharma market share) grew by 1%
• Canadian Pharma Market grew by 7%
• Five major European Pharma Markets grew
by 2%
• Indian Pharma Market year eng growth
rate expected around 12% in 2009.
Domestic Retail Sales grew by 18.3% in
June ‘09 and by 8.9% in July ‘09
Pharmaceutical Industry - Indian
4
Perspective
Pharmaceutical Industry - India

Pharmaceutical Industry - Indian

5
Perspective
 Chemical & Pharma – 22.9% of the
Indian Industries
Source: Socio Economic Review 2007-08
Pharmaceutical Industry - Indian
6
Perspective
Pharmaceutical Industry - Indian
7
Perspective
Composition of the Pharma Industry in Gujarat

Pharmaceutical Industry - Indian

8
Perspective
Key Facts & Figures

Pharmaceutical Industry - Indian

9
Perspective
 Top 5 Indian Pharma Top 5 Global Pharma
Companies Companies
I. Cipla I. Pfizer
II. Ranbaxy II. Glaxo Smith Kline (GSK)
III. GSK III. Astra Zeneca
IV. Piramal Health Care IV. Novartis
V. Sanofi Aventis
V. Zydus Cadila
(Sun – as on Feb. ‘09)
Top Performing Drugs
I. Lipitor (Pfizer) I. Seretide/Advair (GSK)
II. Plavix (Bristol) II. Enbrel (Wyeth)
III. Meyer Squibb (Sanofi • IN INDIA:
Aventis) Rank 1: Voveran
IV. Nexium (Astra Zeneca) (Novartis)

Source: IMS Data 2008 Pharmaceutical Industry - Indian

10
Perspective
Market Share of Pharma Companies in
India
Zydus Cadila;
3.6 Cipla
Cipla; 5.3
Ranbaxy
Piramal
Healthcare; 3.9 GSK

Ranbaxy; 5 Piramal
Healthcare

GSK; 4.3 Zydus Cadila

These Top 5 Companies govern 22% of the

Domestic Pharma Market
Pharmaceutical Industry - Indian
11
Perspective
Key Exports Notifications – Year 2009

• India’s export volume to US hampered (down

by 40%) – Competition from China, Israel &
Korea
• Reasons for Export Downfall :
• Fluctuating Dollar (liquidity problems)
• Ban on Ranbaxy
• Competition from other Asian countries
• Aggressive pricing by Chinese exporters
• Cancellation of Orders
Pharmaceutical Industry - Indian
12
Perspective
 Indian Advantage
• 40% to 50% savings in raw materials

• 85% to 90% manpower cost savings

• FDA-approved plants can be constructed

in India at 30% to 50% lower costs

• Higher utilisation of equipment due to

improved processes
Pharmaceutical Industry - Indian
13
Perspective
India’s Regulatory framework

Pharmaceutical Industry - Indian

14
Perspective
 Contract Research & manufacturing –
Emerging Sectors
• Indian drug discovery and development outsourcing market is
projected to grow at a rate of 50 % in 2009
• Indian pharmaceutical manufacturing outsourcing market is valued
at US$ 1.1 billion and the segment is growing at thrice the global
market rate
• India‘s share of the outsourcing market to increase from 2.8% in
2007 to 5.5% in 2010
• APIs /intermediate outsourcing is more prevalent in India than
formulation outsourcing; around 64 % of total outsourcing is in the
area of APIs/intermediates. APIs and intermediate demand is likely
to be in the range of US$ 600 million to US$ 700 million by 2010
• By 2010, the demand for contract manufacturing of formulations to
be around US$ 210 million to US$ 300 million
Pharmaceutical Industry - Indian
15
Perspective
R & D Efforts

Pharmaceutical Industry - Indian

16
Perspective
Future of Pharmaceutical Industry

• MNCs in India to control 8-9% in

domestic pharma market worth $8
billion by 2015
• Indian Pharma Market expected to triple
to $20 billion by 2015 – Moving towards
World’s Top 10 Markets
• Focus of Indian Companies shifting from
the US

Pharmaceutical Industry - Indian

17
Perspective
Pharmaceutical Industry - Indian
18
Perspective
 Porters’ Five Forces Model
• Barrier to entry: High (Pharmaceuticals)!
Cost of R&D and patent limitations
• Industry Competition: High! Advantages
gained by first mover advantage (patents)
• Suppliers: Supplier power is low!
• Buyers: Buyer power is low!
• Substitutes: Low (with patents), Medium
(after patent expiry)

Pharmaceutical Industry - Indian

19
Perspective
 SWOT

Pharmaceutical Industry - Indian

20
Perspective