Pharamceutical Industry, India Pharamceutical Industry, Top Manufacturers of Pharamceuticals

 

Among all the major industries in India, textiles and pharmaceuticals are surely the leaders. The Indian government has listed the pharmaceutical industry as an intellectual industry and investment in research and development has been enhanced.

The pharmaceutical products account for 8 percent of the global pharmaceutical sales and India is the fifth largest producer of bulk medicines in the world. In 2001, the value of India’s exports of medicines approached US$1.7 billion.

Indian Pharmaceutical Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously.

The Industry possesses quality producers and many units approved by regulatory authorities in USA and UK. International companies associated with this sector have stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped to put India on the pharmaceutical map of the world.

There are 20,000 laboratories in India’s pharmaceutical industry and the scale of the pharmaceutical market amounts to Euro 5.3 billion. The leading 250 pharmaceutical companies control 70% of the market with market leader holding nearly 7% of the market share. It is an extremely fragmented market with severe price competition and government price control.

Around 70% of the country’s demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injections is met by home production. There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units).

Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs and pharmaceutical products has been done away with. Manufacturers are free to produce any drug duly approved by the Drug Control Authority. Technologically strong and totally self-reliant, the pharmaceutical industry in India has low costs of production, low R&D costs, innovative scientific manpower, strength of national laboratories and an increasing balance of trade. The Pharmaceutical Industry, with its rich scientific talents and research capabilities, supported by Intellectual Property Protection regime is well set to take on the international market.

Over 20,000 registered pharmaceutical manufacturers exist in the country. The domestic pharmaceuticals industry output is expected to exceed Rs260 billion in the financial year 2002, which accounts for merely 1.3% of the global pharmaceutical sector. Of this, bulk drugs will account for Rs 54 bn (21%) and formulations, the remaining Rs 210 bn (79%). In financial year 2001, imports were Rs 20 bn while exports were Rs87 bn.

More than 85% of the formulations produced in the country are sold in the domestic market. Over 60% of India’s bulk drug production is exported and Import of bulk drugs have slowed down in the recent years.

The Indian pharmaceutical industry is also getting increasingly U.S. FDA compliant to harness the growth opportunities in areas of contract manufacturing and research. Indian companies such as Ranbaxy, Sun Pharma, and Dr. Reddy’s are increasingly focusing on tapping the U.S. generic market. Recently, Ranbaxy Laboratories Ltd has received a tentative approval from the US Food and Drug Administration to manufacture and market Lamivudine tablets (150 mg), a medicine used in treating HIV infection. This tentative approval has been granted under the US President’s Emergency Plan for AIDS Relief Initiative (PEPFAR).

The Indian government had recently passed Patents (Amendment) Bill on Tuesday, March 22, 2005 amid many protests from the Left parties. The passing of the bill means that India has kept its commitment to the WTO to have a product patent regime in place.

The fear that the new bill would lead to an increase in the cost of life saving drugs, is taken care off by the compulsory licensing under the bill. This will enable Indian companies to manufacture medicines for a fixed tenure in case of any epidemic, thus controlling the price factor.

The government has made crucial changes to the original draft to ensure big pharma MNCs can’t dictate medicine prices arbitrarily. The most important change in the Act is a tighter definition of what can be patented. Now only a product, including drugs, which makes a technical advance or has economic significance, can get a patent.

Some of the changes that bill proposes include giving manufacturing rights to Indian companies, which currently produce drugs patented abroad, after paying a ‘reasonable’ royalty for them.

The bill also restricts a pharmaceutical company from renewing its patent every time it expires, citing a new use for the same drug. It gives companies more grounds and time to challenge a patent claim even before it’s granted.

The government will also have the right to issue a compulsory licence to an Indian company to produce a patented product if the patent holder is charging abnormally high rates or in case of a national emergency.

Expenditure on R & D by the Indian pharmaceutical companies is around 1.9% of the industry’s turnover. This is very low when compared to the investment on R & D by foreign research-based pharma companies. They spend 10 – 16% of the turnover on R & D. However, now that India has entered into the Patent protection area, many companies are spending relatively more on R & D. The Pharmaceutical and Biotechnology Industry is eligible for weight deduction for R&D expense up to 150%.    ||   

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