The Indian pharmaceutical industry

The Indian pharmaceutical industry - The Indian...

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The Indian pharmaceutical industry (IPo) today Statistics Top 10 Pharmaceuticals in India, as of 2004 Rank Company Revenue 2004 (Rs crore) Revenue 2004 (USD millions) 1 Ranbaxy Laboratories 4,461 1,026 2 Dr. Reddy's Laboratories 1,933 444 3 Cipla 1,842 423 4 Piramal Healthcare 1,387 319 5 Aurobindo Pharma 1,260 290 6 GlaxoSmithKline 1,228 282 7 Lupin Laboratories 1,180 271 8 Sun Pharmaceutical Industries 1,110 255 9 Cadila Healthcare 1,091 251 10 Wockhardt 980 225 USD 1 = Rs 43.5 Source: Pharmaceutical Sales Busters , India Business Insight, 31-Dec-04 In 2002, over 20,000 registered drug manufacturers in India sold $9 billion worth of formulations and bulk drugs. 85% of these formulations were sold in India while over 60% of the bulk drugs were exported, mostly to the United States and Russia. Most of the players in the market are small-to-medium
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enterprises; 250 of the largest companies control 70% of the Indian market. Thanks to the 1970 Patent Act, multinationals represent only 35% of the market, down from 70% thirty years ago. Most pharma companies operating in India, even the multinationals, employ Indians almost exclusively from the lowest ranks to high level management. Mirroring the social structure, firms are very hierarchical. Homegrown pharmaceuticals, like many other businesses in India, are often a mix of public and private enterprise. Although many of these companies are publicly owned, leadership passes from father to son and the founding family holds a majority share. In terms of the global market, India currently holds a modest 1-2% share, but it has been growing at approximately 10% per year[27]. India gained its foothold on the global scene with its innovatively- engineered generic drugs and active pharmaceutical ingredients (API), and it is now seeking to become a major player in outsourced clinical research as well as contract manufacturing and research. There are 74 U.S. FDA-approved manufacturing facilities in India, more than in any other country outside the U.S, and in 2005, almost 20% of all Abbreviated New Drug Applications (ANDA) to the FDA are expected to be filed by Indian companies. Growth in other fields notwithstanding, generics are still a large part of the picture. London research company Global Insight estimates that India’s share of the global generics market will have risen from 4% to 33% by 2007. Challenges All of these changes are ultimately good for the Indian pharmaceutical industry, which suffered in the past from inadequate regulation and large quantities of spurious drugs. They force the industry to reach a level necessary for global competitiveness. However, they have also exposed some of the inadequacies in the industry today. Its main weakness is an underdeveloped new molecule discovery program. Even after the increased investment, market leaders such as Ranbaxy and Dr. Reddy’s Laboratories spent only 5-10% of their revenues on R&D, lagging behind Western pharmaceuticals like Pfizer, whose research budget
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The Indian pharmaceutical industry - The Indian...

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