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In 2006, while the number of new product launches increased for the top 10 players, it decreased for the next 15 players in comparison with the previous year. The contribution of new sales from new product launches to overall sales declined to around 4.8 per cent from 5.1 per cent for the top 10 players and 8 per cent from 9.6 per cent for the next 15 players.Expansion of healthcare infrastructure in rural areas has facilitated the said change. Increased government spending on roads, telecommunication and healthcare infrastructure has facilitated the foray of pharmaceutical companies into relatively distant pockets of the market.20062010IndustryIndustryServicesProductsServicesProductsDomesticExportsDomesticExports6.6%93.4%57%43%12%88%38%62%Source: E&Y Analysis
MARKE T & OPPORTUNITIES14EXPANSION OF PRIVATE SECTOR HEALTHCARE DRIVING ACCESSIBILITY Medical Value Travel has led to an investment spurt in the private healthcare services in the country. The number of specialist hospitals has doubled and secondary care hospitals have further grown in numbers. There is an increasing investment by the private sector in healthcare facilities across tier-I and II cities in the country. An estimated 1 million beds would be added by 2012, taking the total beds available in the country to over 2 million. An estimated US$ 69.7 billion would be invested by the private sector in healthcare infrastructure by 2012. The healthcare expenditure of Indians has been rising rapidly and the demand for high quality services is snowballing into a rise in drug demand and consumption. The number of patients visiting Indian hospitals is expected to rise by 30 per cent, to 22 million by 2015.INCREASING PENETRATION OF MEDICAL INSURANCEPenetration of medical insurance has grown rapidly over the past couple of years and is further poised to increase pace due to increasing influx of foreign players. The industry is likely to expand in the future due to favourable regulatory changes such as permitting FDI of 51 per cent in the stand alone health insurance companies and setting the minimum capital requirement at US$ 5.4 million. Further, the Indian middle class with its increasing earning power is likely to account for a major portion of this market. Increasing penetration of customised insurance plans would further drive the affordability factor which would influence the consumption of medical and healthcare products. RISING DISPOSABLE INCOMES TO DRIVE DRUG CONSUMPTIONIndia’s booming economy and higher consumer spending is changing the face of the Indian pharmaceutical market by influencing the consumption of drugs. India has a strong 16.4 million middle-class households with annual income ranging between US$ 4,849 – US$ 24,242 in 2006. This segment is expected to grow at a CAGR of 14 per cent to become 28.4 million by 2010 and would be the key driver of consumption in the urban market.