EXPLORING THE OPPORTUNITIES PREVAILING IN THE INDIAN BIO-PHARMACEUTICALS MARKET
Pharmaceutical markets across the globe are currently undergoing major disruption wherein growth in developed markets slowing down, and emerging markets becoming increasingly important with each passing year. The Indian bio-pharmaceuticals industry, along with that of China, Brazil and Russia, is expected to spearhead growth in the coming years.
The bio-pharmaceuticals industry in India is primarily characterized by the presence of a number of branded generics, which constitute almost 70 to 80 per cent of the retail market. Secondly, local players enjoy a dominant position in the market, driven by formulation development capabilities and considerable initial investments. Another important characteristic of the market is the lower price of the products, owing to the intense competition prevailing in the market. With the Indian bio-pharmaceuticals market placed amongst the top ten globally in terms of value, it is the third largest in volumes. These characteristics present their own opportunities and challenges.
What’s driving the bio-pharmaceuticals market in India?
Growth in the income levels and medical infrastructure developments are holding the market in good stead in the coming years. This growth witnessed is widespread across therapy and geographies. In the wake of this growth, several leading players are looking to focus on new and emerging opportunities leveraging the pace of innovation in the market. The launch of branded generics businesses and significant expansion of market coverage by multinationals are further testaments to this trend. As a result, the expectations from the India businesses have risen and aspirations have become bolder.
Foreign investments creating significant opportunities
Favorable government policies are one of the crucial factors enhancing the potential of the Indian pharmaceutical market further. Currently, the government allows 100% foreign direct investment under automatic route in greenfield pharmaceutical projects and up to 100% FDI under government approval in brownfield projects. Within the green field category, multinational pharmaceutical companies are allowed to set up their subsidiary and start production with new plants or facilities. Whereas, under brownfield investment, companies buy or lease existing facilities to begin a new production activity.
Thanks to such favorable investment policies, India has further consolidated its position as a high quality generic manufacturer across the globe, and currently exports half of its total production to more than 200 countries in the world. Research reports reveal that in 2017-18 itself, India exported pharma products worth USD 17.27 Bn, and the same is estimated to expand another 30% to reach USD 20 Bn by 2020.
An INR 2,891.70 Bn opportunity, the bio-pharmaceutical market in India presents significant potential for collaboration in drug development, biotechnology, chemicals, and manufacturing of medicinal products. India’s CRAM sector is globally recognized for its experiential research services and is one of the fastest growing segments of the country’s pharmaceutical industry. Low cost of production, low R&D costs, innovative scientific manpower, and a large number of national laboratories capable of steering the industry to a higher level are some of the biggest advantages on offer for the bio-pharma industry in India.
Another significant opportunity for the Indian bio-pharmaceutical industry arises from the fact that the country has the highest number of USFDA-approved plants for generic drug manufacturing facilities outside the US. Some of the leading Indian pharma companies generate almost half of their revenue from exporting generic medicines to developed markets like the US and Europe.