A
BRIEF REPORT
ON
PHARMACEUTICAL INDUSTRY IN INDIA
May, 2014
A brief report on Pharmaceutical Industry in India
Private & Confidential
Page 2 of 10
1.
OVERVIEW OF PHARMACEUTICAL INDUSTRY
1.1.
An Introduction
The Indian pharmaceutical industry currently tops the chart amongst India's science-based industries
with wide ranging capabilities in the complex field of drug manufacture and technology. A highly
organized sector, the Indian pharmaceutical industry is estimated to be worth $ 4.5 billion, growing
at about 8 to 9 percent annually. It ranks very high amongst all the third world countries, in terms of
technology, quality and the vast range of medicines that are manufactured. It ranges from simple
headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of
medicine is now made in the Indian pharmaceutical industry.
The Indian pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has
expanded drastically in the last two decades. The Pharmaceutical and Chemical industry in India is
an extremely fragmented market with severe price competition and government price control. The
Pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug
intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals, and injectibles. There
are approximately 250 large units and about 8000 Small Scale Units, which form the core of the
pharmaceutical industry in India (including 5 Central Public Sector Units).
The Government has also played a vital role in the development of the India Software Industry. In
1986, the Indian government announced a new software policy which was designed to serve as a
catalyst for the software industry. This was followed in 1988 with the World Market Policy and the
establishment of the Software Technology Parks of India (STP) scheme. In addition, to attract
foreign direct investment, the Indian Government permitted foreign equity of up to 100 percent and
duty free import on all inputs and products.
1.2
Current Scenario
Indian pharmaceutical industry is expected to grow at 19% in 2013. India is now among the top five
pharmaceutical emerging markets. There will be new drug launches, new drug filings, and Phase II
clinic trials throughout the year. On back of increasing sales of generic medicines, continued growth
in chronic therapies and a greater penetration in rural markets, the domestic pharmaceutical market
is expected to register a strong double-digit growth of 13-14 per cent in 2013.
Moreover, the increasing population of the higher-income group in the country will open a potential
US$ 8 billion market for multinational companies selling costly drugs by 2015. Besides, the domestic
pharma market is estimated to touch US$ 20 billion by 2015, making India a lucrative destination for
clinical trials for global giants.
