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India Pharmaceuticals and Healthcare Report Q1 2009

Strategic Insights

— 2 min read

Despite challenges such as low per capita consumption, regulatory hurdles, and infrastructure deficiencies, India's pharmaceutical market is expected to experience high double-digit growth in the medium term due to its large population and growing demand for generics. The government's efforts to improve the regulatory environment are a positive step, but concerns remain over the quality of domestic production, with several companies facing scrutiny from the US FDA. The sector's exports, which had seen impressive growth, are now facing increased competition and a strengthening currency.

Key Takeaways:

  • India's pharmaceutical market is considered moderately attractive, ranking eighth in BMI's Q109 regional Business Environment Rankings for Asia Pacific.
  • The country's fast-growing population will drive pharmaceutical growth, but low per capita consumption and emphasis on generics hamper market development.
  • The government's efforts to improve the regulatory environment, including the creation of the Department of Pharmaceuticals, are a positive step.
  • However, India's domestic generics industry faces challenges, including low-quality production, as seen with several companies facing scrutiny from the US FDA.
  • Excessive red tape, underdeveloped infrastructure, and a deficient legal framework remain barriers to investment.
  • Indian companies have expanded locally and abroad, with notable acquisitions such as Zydus Cadila purchasing Etna Biotech and Sun Pharma acquiring Chattem Chemicals.
  • However, challenges in the US market, including increased competition and a strengthening rupee, have impacted Indian generics exports, with the annual growth of the sector down by more than half.
  • The sector's fundamentals are sound, and high double-digit growth is expected to be maintained over the medium term.
  • The US general election victory for the Democratic Party and the 2011 patent cliff present opportunities for Indian generics exports.

Statistics:

  • India's pharmaceutical market growth is expected to be driven by its large population, with the country expected to see high double-digit growth in the medium term.
  • Low per capita consumption and an emphasis on generics pose challenges to market development.
  • The government's efforts to improve the regulatory environment are a positive step, with the creation of the Department of Pharmaceuticals expected to improve the sector.
  • Indian generics exports face increased competition and a strengthening rupee, with the sector's annual growth down by more than half.
  • Several Indian companies, including Zydus Cadila, Sun Pharma, Lupin, Ranbaxy Laboratories, Caraco Pharmaceutical Laboratories, Wockhardt, and Granules India, face quality control issues and regulatory scrutiny.
  • Indian pharmaceutical exports are expected to see significant growth due to the 2011 patent cliff and increased generic substitution in the US market.

Sources:

  • Research and Markets, "India Pharmaceuticals and Healthcare Report Q1 2009"
  • BMI (Business Monitor International)
  • Pharmabiz
  • US FDA (Food and Drug Administration)
  • News provider (Pharmabiz)

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