India: The Next Pharma Superpower?

The Indian pharmaceutical market has enormous potential for growth. The growing middle class has disposable income, and increasing healthcare expectations. India is the world’s fourth largest producer of pharmaceuticals by volume, accounting for 8% of global production and thirteenth in global value terms. The market has been valued at $8.8 billion in 2005 (espicom). The pharmaceutical market is forecasted to grow to as much as US$25 billion by 2010 (McKinsey).

India boasts the largest number of FDA approved manufacturing facilities outside the USA. In addition to their skills at developing generic drugs, domestic companies have realized the need to undertake original research. Last year, Indian firms filed nearly 20% of the abbreviated new drug applications (ANDA) submitted to the FDA.

India is also emerging as a major contract manufacturing research destination. Many domestic pharma companies are entering into licensing agreements with MNCs for new chemical entities (NCEs) and new drug delivery systems (NDDS), besides roping in marketing alliances with MNCs to market their products in domestic markets. Indian pharma has also been going global, through acquisitions and partnerships in regulated markets.

Anticipating the new business environment, the Indian Government is coming out with a new Pharmaceutical Policy to boost the Indian pharma sector. Stringent measures have ensured all Indian pharmaceutical companies have GMP certified manufacturing facilities, for which the deadline ended June 2005. India has also strengthened Schedule Y of its Drugs & Cosmetics Act to ensure clinical trials held in India are on par with global standards.

The Indian pharmaceutical market directly employs about 500,000 people (this is around double the US and 21 times Puerto Rico or Ireland). There are around 270 large R&D based pharmaceutical companies in India, including multi-nationals, government-owned, and private companies. In addition there are 5,600 small and medium-scale pharmaceutical manufacturers, including loan-licensed manufacturers who mainly cater to the public sector drug requirements and contribute more than 40% of the domestic pharma production.