Capitalising on India’s Growth Potential

The global Pharma industry is under serious pressure. Large numbers of forthcoming patent expiries, a dry pipeline of new drugs, regulatory challenges and pricing restrictions have slowed down the growth of Pharma industry’s main markets. This has led to a shift in gravity towards emerging markets like India, China, South America and Russia. Emerging markets will be the next major growth drivers for the global Pharma industry, with more than 40% of incremental growth of the industry coming from emerging economies in the next decade. In this report we focus on the domestic Indian Pharma market; we believe that the domestic market has the potential to reach $74 billion by 2020 from its current size of $12 billion - a CAGR of 20%.

We take a detailed look at developments in key growth segments:

  • Branded generics. A large portion of India’s pharmaceutical market is made up of branded generics. Generic generics’ and patented products’ contributions to the market as a whole is currently very low and we do not foresee a significant increase in the next five years; the market is expected to remain comprised predominantly of branded generics.
  • Over-The-Counter (OTC) products. We expect the OTC segment to be a significant growth driver for the industry.
  • Rural markets. Majority of India’s population resides in rural areas, a market that contributes very little to the overall market’s sales due to several operational challenges. This represents huge opportunity, and we expect rural markets to be primary volume drivers for the industry in the future.
  • Vaccine Industry. India has an established vaccine industry, with a shift toward biotechnology products and preventive medication, we expect the vaccine industry to sustain growth in the future.
  • Goods & Services Tax. We believe The Pharma industry has lot of homework to do before the GST kicks in; this new legislation is a game changer and the winners would be the most proactive organisations.

We believe that the domestic Indian pharmaceutical market has a positive growth trajectory, but will also face major transformational challenges in the next decade. We address some of these challenges and identify key imperatives to accelerate the domestic market’s growth.