Site Loader















We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now





















Himanshu Maheshwari         Kavita Kulkarni

Guide –NMIMS Hyderabad















Page No.





and Competition: Market Size and Characteristics



Industry and Competition:
Market Trends



and Competition: Market Structure



Characteristics of Competitors



Behavioral Traits of each Major



Analysis- Metrics














The Pharmaceutical
Industry develops, manufacture, and markets drugs licensed for use as medicines.
For this they have a well-equipped Research and Development department.
Pharmaceutical companies are allowed to deal in generic and/or brand medicines
and medical devices. They are deal with variety of laws and regulations of the
government regarding the patenting, testing, pricing and ensuring safety and adequacy
and marketing of drugs. The Indian Pharmaceutical industry is the
second-largest in the world by volume and is ahead to manufacturing sector of
India. The first pharmaceutical company of India was Bengal Chemicals and
Pharmaceutical Works, which still exists today as one of 5 government-owned
drug manufacturers, in Calcutta in the year 1930. For the next 60 years, most
of the drugs in India were imported by multinationals either in fully
formulated or bulk form. The government started to encourage the growth of drug
manufacturing by Indian companies in the early 1960s, and due to the Patents
Act in 1970, the industry got an opportunity to grow. This patent act removed
composition patents from food and drugs, and though it kept process patents,
these were shortened to a period of five to seven years. The lack of patent
protection made the Indian market undesirable to the multinational companies
who had dominated the market, and while they streamed out, Indian companies
started to take their places. The multinationals were market leaders at that
time because of their superior technology. As a result of this, they had gained
expertise in reverse-engineering new processes for manufacturing drugs at low
costs. Although some of the larger companies have taken small steps towards
drug innovation, the industry as a whole has been following this business model
until the present. Introduction to Pharma Industry 28 Research and Development
Drug discovery is the process by which the required drugs are discovered or
designed. In the past most drugs have been discovered either by isolating the
active ingredient from traditional remedies or by serendipitous discovery. A
great deal of early-stage drug discovery has traditionally been carried out by
universities and research institutions. All this requires constant innovation
and research by either the traditional or modern methods, or a combination of
both. Drug development refers to activities undertaken after a compound is
identified as a potential drug in order to establish its suitability as a
medicines. Objectives of drug development are to determine appropriate
Formulation and Dosing, as well as to establish safety. Research in these areas
generally includes a combination of in vitro studies, in vivo studies, and
clinical trials. The amount of capital required for late stage development has
made it a historical strength of the larger pharmaceutical companies. Often,
large multinational corporations contribute in a broad range of drug discovery
and development, manufacturing and quality control, marketing, sales, and
distribution. On the other hand, smaller organizations lay emphasis on a
specific aspect such as discovering drug candidates or developing formulations.
Often, collaborative agreements between research organizations and large
pharmaceutical companies are formed to discover any probability of new drug.



Market Size of
Indian Pharma Industry and Its Characteristics



pharma sector is estimated to account for 3.1- 3.6 %
of the global pharma industry in terms of value and 10 % in value terms. It is
estimated to grow to 100US$ billion by 2025. India accounts for 20 per cent of global exports in
generics. India’s
pharmaceutical exports stood at US$ 16.84 billion in 2016-17 and are expected to reach US$ 20
billion by 2020. During April – September 2017, India exported pharmaceutical products worth Rs.411.3 billion (US$ 6.4 billion). During April – October 2017, India exported pharmaceutical products worth Rs.478.3 billion (US$ 7.4 billion).


    Figure 1: Revenue of Indian pharmaceutical
sector ($ billion)

Department of Pharmaceuticals, PwC, McKinsey, TechSci Research

      Notes: F – Forecast, CAGR – Compound
Annual Growth Rate



The market size is
expected to grow to US$ 55 billion by 2020 and become the 6th
largest pharmaceutical market globally by absolute size. Branded generics with
nearly 80% of market share will dominate the pharmaceuticals market (in terms
of revenues).


According to data
from the Ministry of Commerce and Industry, India has out- performed China in
pharmaceutical exports with a YoY growth of 11.44% to US$ 12.91 billion in FY
2015-16, on other hand imports rose marginally by 0.80 % YoY to US$ 1,641.15 Million.


Figure 2:
Projected size of Indian Pharma market in $ billion



     Source: Mckinsey Analysis, secondary


Figure 3:
Formulation and Bulk Drugs Export Outlook:



CRISIL research; KPMG in India analysis


The US Food and Drug
Administration (USFDA) approved 201 in FY 2015-16 drugs of Indian companies,
nearly doubled from 109 in FY 2014-15. India accounts for around 30% (by
volume) and about 10% (value) of US generics market which stood at US$ 70-80
billion in 2015-16.


India’s biotechnology industry made of
bio-agriculture, bio-pharmaceuticals, bio-services, bio-informatics and
bio-industry is expected grow at an average growth rate of 30% a year and
expected to reach $100 billion by 2025.



Figure 4:
Percentage Distribution of Biotech Companies in Various Segments


Biopharma, therapeutics, comprising vaccines and
diagnostics, is the largest sub-sector of biotech contributing nearly 62% of
the total revenues at Rs 12,600 crore ($ 1.88-billion).



Geographical Clusters: Most of the pharmaceutical manufacturing units are
concentrated in Maharashtra and Gujarat. These two states are home for 44% of
the pharmaceutical manufacturing units.


Ministry of Skill Development & Entrepreneurship



Table 1: Geographical
Distribution of the Pharmaceutical Companies In India



No. of Manufacturing units



Bulk Drugs









West Bengal




Andhra Pradesh




Tamil Nadu












Department of Pharmaceuticals; KPMG in India analysis, ASSOCHAM


The data clearly suggests that due to better infrastructure
facilities, enhanced support from small-scale companies, conductive industrial
atmosphere and skills in chemistry, Maharashtra remains an attractive
destination for Pharma companies. The Maharashtra government promotes the
“Centres of Excellence” working on cutting-edge R&D in emerging areas of
technology and life sciences.


Figure: Percentage
Distribution of Pharmaceutical Companies in Various Regions

Department of Pharmaceuticals; KPMG in India analysis, ASSOCHAM

On other hand Gujarat
always encourages new investments in the state and employs approximately 52,000
people in this sector.


The 5 tax-free states namely Himachal Pradesh, Uttaranchal,
Jammu & Kashmir, Jharkhand and Sikkim are emerging as hot destinations for
Pharma companies. Uttarakhandand Himachal Pradesh (HP) is considered to be
among the fastest growing Pharma hubs in India. Baddi and some other areas in
HP have over 300 manufacturing units. Haridwar, Roorkee, Dehradun and Rudrapur
of Uttarakhand have 200 pharma manufacturing units.


Manufacturing hotspot for various companies across India

KPMG in India analysis, IBEF August 2013


The investment in the region is reported to be worth an
estimated INR30 billion in recent years. Alembic, Dr. Reddy Lab, Alkem,
Mankind, Torrent, Lupin, Cadila, Indswift Lab, Unichem, Morepen,


Klitch, Ranbaxy, Nector, Surya, Cachet, Indchemie, Galpha
are some of the major companies to have established their units in these areas. (Cf. KPMG in India
analysis, IBEF August 2013).










Market Trends of
Indian Pharma Industry





Figure: Global Pharmaceutical Market, Regional Market Share Forecast, 2017*

*Based at ex-manufacturer price levels, not including
rebates and discounts. Contains audited and
unaudited date. All compound annual growth rates (CAGR) based on five years.

Pharmerging countries include: Algeria, Argentina,
Colombia, Egypt, Indonesia, Mexico, Nigeria, Pakistan, Poland, Romania, Saudi
Arabia, South Africa, Thailand, Turkey, Ukraine,


IMS has estimated a compound
annual growth rate (CAGR) for the global pharmaceutical market of 3-6% in the
forecast period of 2013-2017. The US pharmaceutical market is expected to grow
at a rate of 1–4%. As far as Europe is concerned, the markets of the European Union are expected to experience a CAGR
of 0–3%, and the rest of Europe is should have a CAGR of (-1%) to 2%. Emerging
markets, may see strong growth, but are expected to show slower growth than in
the previous forecast period. IMS expects China’s
market will experience a CAGR of 13–16%,
between 2013–2017 compared to a CAGR of
22% during 2008–2012. IMS estimates that the pharmaceutical markets of Brazil,
India, and Russia may to see a CAGR of 10–13% between 2013–2017 compared to a
CAGR of 16% during 2008–2012. Tier 3 ‘pharmaerging’ markets have a prognosis
to have pharmaceutical industry growth of 6–9% between 2013–2017 compared to a
CAGR of 9% during 2008–2012.Due to reporting purposes, CAGR forecasts are
estimated in constant dollars, and historical CAGR in
actual dollars. 

The influence of emerging
markets in pharmaceutical industry growth is substantially proven by several
key projections offered by IMS. By 2017, 50% of drugs by volume are forecasted
to be in ‘pharmerging’ markets, and the US and
Europe each respectively will account for only 13% of pharmaceutical volume by
2017. China will take the lead, and the BRIC countries (Brazil, Russia, India,
and China) will account for 70% of all ‘pharmerging’ market sales by 2017 on a
value basis and strategically will continue to be the
reasons of thriving among emerging markets. Pharmaceutical sales in China are
estimated to touch $167 billion by 2017, $49 billion in Brazil, $24 billion in
India, and $27 billion in Russia.





Government expenditure on pharma in the country increased from US$14 billion in
2008 to US$ 53 billion in 2016. The expenditure
expanded at a CAGR of 18.1 per cent over 2008–16to
reach US$ 53 billion. Under Union Budget 2017-18, new
5,000 postgraduate seats in

medical colleges were
announced by the government, to ensure availability of specialist doctors. Under Union Budget 2017-18, new 5,000 postgraduate seats in medical colleges were announced by the government, to ensure availability
of specialist doctors. Medical technology park in
Vishakhapatnam, Andhra Pradesh has already been set up with an investment of US$ 183.31 million. States like
Himachal Pradesh, Gujarat, Telangana and Maharashtra
are showing interest for making investments in these
parks. German technical services provider TUV Rheinland’s Indian subsidiary
has partnered with Andhra Pradesh MedTech Zone(AMTZ) to create an infrastructure for Electro-Magnetic Interference (EMI/EMC) at an investment of US$
12.64 million over a course of four
to five years.




Rising share of government expenditure (US Billion$)







updated information, please visit www.













Post Author: admin


I'm Matt!

Would you like to get a custom essay? How about receiving a customized one?

Check it out