Indian pharma market valued at INR 72069 crore, CII-PwC report Pharma industry going through challenging time

Mumbai, October 31, 2013 – The Indian pharmaceutical market (IPM) is currently valued at 72,069 crore INR as against 65,654 crore INR in 2012. Though the market value has seen an increase, the sector overall has experienced a slowdown with its growth going down to 9.8% from 16.6% in 2012. This slowdown can be attributed to the new drug pricing policy and the regulatory interventions over the last year, according to the CII–PwC report, ‘India Pharma Inc; Changing Landscape of Indian Pharma Industry’.

The industry is witnessing additional challenges like delays in clinical trial approvals, uncertainties over the FDI policy, a uniform code for sales and marketing practices and compulsory licensing. The slowdown is also evident from the number of new product launches, which has gone down from approximately 1900 in year 2010 to 1700 in year 2012. The contribution of chronic therapies to the IPM has gone up from 27% in 2010 to 30% in 2013. Chronic therapies (cardio, gastro, CNS and anti-diabetic) have outperformed the market for the past four years and are growing at a rate of 14%, faster than the acute therapies (anti-infectives, respiratory, pain and gynaec) which grew at 9.6%. This essentially translated in an overall slowdown in 2013, highlighted the report.

Dr Rajiv Modi, Chairman Chairman - CII Pharma Summit 2013 & CII Gujarat State Council and and Chairman and Managing Director, Cadila Pharmaceuticals, said, “India has had an efficient pharmaceutical industry, which has been making affordable drugs not just for the Indian markets but has also been exporting them to the world. The sector is currently experiencing slow growth. Henceforth, both the Indian and foreign companies operating in India will have to device suitable strategies in order to be in the top 10 global markets by 2020.”

Sujay Shetty, leader – pharma and life sciences, PwC India said, “The economic environment in India is tougher now than ever before. While pharma companies focus their attention on measures to combat the growth slowdown, they will need to work with the government and other stakeholders to discuss and resolve regulatory challenges. Resolving the impasse with clinical trials is critical both for patients and India's ambition to innovate.”

According to the report, India is perceived as an attractive destination for clinical trials but has been marred with genuine concerns. Clinical trials are an inherent part of the drug development process and cannot be dispensed with. The continuing search for new therapies and cost-effective alternatives to existing therapies will be realised in practice only after comprehensive clinical trials.

The clinical research industry in India needs to work closely with the government to create a regulatory mechanism that allows scientifically sound and ethically correct trials to be conducted so that the benefits of clinical trials can be brought to patients in India.

The industry is also facing stricter regulations on manufacturing and quality practices in the domestic as well as he international markets. Indian companies will have to raise their compliance to US FDA regulations as they drive their major share of exports from the US market.

The implementation of the National Pharmaceutical Pricing Policy 2012 by the Government of India has resulted in margins erosion from 20% and 10% to 16% and 8% for retailers and stockists, respectively. This decrease in the stockist margins led to a significant uncertainty among many stockists regarding the feasibility of staying in business due to lower profitability post the margin reduction.

The report added that innovation facilitated by technological advancements is an integral part of the pharmaceutical industry and all the leading Indian companies are investing hugely in research and development (R&D). The report suggested a convergence of four key technologies called SMAC to drive innovation: Social Networking, Mobile Computing, Cloud Computing & Analytics.

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About CII

The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the development of India, partnering industry, Government, and civil society, through advisory and consultative processes.

CII is a non-government, not-for-profit, industry-led and industry-managed organization, playing a proactive role in India's development process. Founded over 118 years ago, India's premier business association has over 7100 members, from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 90,000 enterprises from around 257 national and regional sectoral industry bodies.

CII charts change by working closely with Government on policy issues, interfacing with thought leaders, and enhancing efficiency, competitiveness and business opportunities for industry through a range of specialized services and strategic global linkages. It also provides a platform for consensus-building and networking on key issues.

Extending its agenda beyond business, CII assists industry to identify and execute corporate citizenship programmes. Partnerships with civil society organizations carry forward corporate initiatives for integrated and inclusive development across diverse domains including affirmative action, healthcare, education, livelihood, diversity management, skill development, empowerment of women, and water, to name a few.

The CII Theme for 2013-14 is Accelerating Economic Growth through Innovation, Transformation, Inclusion and Governance. Towards this, CII advocacy will accord top priority to stepping up the growth trajectory of the nation, while retaining a strong focus on accountability, transparency and measurement in the corporate and social eco-system, building a knowledge economy, and broad-basing development to help deliver the fruits of progress to all.

With 63 offices, including 10 Centres of Excellence, in India, and 7 overseas offices in Australia, China, France, Singapore, South Africa, UK, and USA, as well as institutional partnerships with 224 counterpart organizations in 90 countries, CII serves as a reference point for Indian industry and the international business community.