The Indian Pharmaceutical industry has been witnessing phenomenal growth in recent years, driven by rising consumption levels in the country and strong demand from export markets. The pharmaceutical industry in India is estimated to be worth about US$ 8 bn, growing at an annual rate of 12-15%. In world rankings, the domestic industry stands 3rd in terms of volume and 12th in value growth terms. The ranking in value terms may also be a reflection of the low prices at which medicines are sold in the country. The industry has seen tremendous progress in terms of infrastructure development, technology base and the wide range of products manufactured. Demand from the exports market has been growing rapidly due to the capability of Indian players to produce cost-effective drugs with world class manufacturing facilities.
Bulk drugs of all major therapeutic groups, requiring complicated manufacturing processes are now being produced in India. Pharma companies have developed Good Manufacturing Practices (GMP) compliant facilities for the production of different dosage forms. In addition, India’s long-established position as a preferred manufacturing location for multinational drug manufacturers is quickly spreading into other areas of outsourcing activities.
Soaring costs of R&D and administration are persuading drug manufacturers to move more and more of their discovery research and clinical trials activities to the subcontinent or to establish administrative centres there, capitalizing on India’s high levels of scientific expertise as well as low wages A highly fragmented industry, the Indian pharmaceutical industry is estimated to have over 30,000 manufacturing and marketing units. Indian pharmaceutical industry will be the 4th largest industry of the country in 2013 turnover wise. The organized sector accounts for just 5% of the industry, while a huge 95% is in the unorganized sector. A large number of players in the unorganized segment are small and medium enterprises and this segment contributes 35% of the industry’s turnover.
Why medicines are essential?
* Increased health consciousness
* Increased life span
* Changed lifestyle, increased stress
* Junk food consumption
* Recurring problems of senior citizens (Kidney problems, cardiovascular problems etc.)
* Increasing frequency of accidents.
(Above figures are taken from –MAT07 July 2012 IMS ORG data) (ORG IMS Research Pvt. Ltd. is the one global source for leading-edge, customized business intelligence about the pharmaceutical market, providing clients with critical information, analyses and answers that drive superior business decisions and strategies.) Along with the manufacturing of the dosage forms raw material manufacturers, diagnostic products, surgical product manufacturers and packaging element manufacturer forms an integral part of the industry.
a) Generic Market:
India has a significant share in the global generics market and is ranked third. In recent years, this segment has been facing stiff competition which makes the scale of production important to improve profitability. India has pre-dominantly been a generic player and has the potential to gain a global presence for the following key developments: * Multiple branded drug patent expirations in the short term of span. According to IMS Health, after 2006-2007 many top selling product patents expired .E.g. In Nov 2011 patent of brand Lipitor expired. Such expiration carries tremendous impact on the generic market. * Increasing confidence of consumers in generics in the developed markets
* A pro-generic sentiment from healthcare authorities driven by the pressure of containing rising healthcare costs * An aging population across the world, leading to increasing demand for low cost therapies * Global healthcare crisis like AIDS in the developing world, necessitating affordable medication for the masses Generic companies in India are recognizing the importance of patent expiries and are making significant incremental investments in research and drug development.
India’s status as an information technology superpower, with access to specialist skills and 24/7 work hours, is a huge advantage as it strengthens its position as the destination of choice for contract research, including drug discovery. Eighty-two percent of U.S companies overall rank India as their first-choice IT outsourcing destination, says leading international clinical research organization Chiltern International, adding that IT and ITenabled services (ITES) companies have been expanding their activities in India to new business segments such as bioinformatics and life sciences; those doing so or planning to include Accenture, Intel, Satyam, Cognizant, IBM, Oracle and TCS.
Wipro Spectramind, India’s largest third-party offshore business process outsourcing provider, is conducting bioinformatics work for global pharmaceutical companies MNCs that have already entered into off shoring contracts include Pfizer India, which has signed a preferred provider contract for its biometrics division with Cognizant Technologies India and is also working with SIRO Clinpharm; Wyeth, working with Accenture in clinical trial data management; GSK, whose biomedical data sciences and clinical data management centre in Bangalore supports studies for the group worldwide; and Novartis, which has a software development centre for specialized drug development programs
India’s Other Advantages for Off shoring
* Low-cost skill base
* Current Good Manufacturing Practice (cGMP) and U.S. FDA compliance levels
* High visibility in generics
* High-quality, compliant manufacturing
* Strong financial position with ability to scale up
* Manufacturing capacity
* Access to new technologies
* Cost efficiency and track record
* Industry position
* Recognition of product patents
c) Contract Manufacturing:
Manufacturing outsourcing-supply of active pharmaceutical ingredients (APIs) and intermediates * Development outsourcing-conducting preclinical and clinical trials * Customized chemistry services-contract research services for compounds pre-launch.
Even after the increased investment, market leaders such as Ranbaxy and Dr. Reddy’s Laboratories spent only 5-10% of their revenues on R&D, lagging behind Western pharmaceuticals like Pfizer, whose research budget last year was greater than the combined revenues of the entire Indian pharmaceutical industry. This disparity is too great to be explained by cost differentials, and it comes when advances in genomics have made research equipment more expensive than ever. The drug discovery process is further hindered by a dearth of qualified molecular biologists. Due to the disconnect between curriculum and industry, pharmas in India also lack the academic collaboration that is crucial to drug development in the West and so far.
It can be defined as planning and executing various concepts of price, promotion, distribution and services offered to potential buyers.
Shift from acute to chronic
With the disease burden shifting from acute to chronic and lifestyle changing, product portfolios of companies are also changing rapidly to include long-term therapies. That brings in greater challenges of ‘adherence’ to therapy for better patient outcomes. In the case of infectious diseases, the problem of drug resistance is looming large too.
Consumer mind-set towards health
Proactively attending to health seems to be the last thing on the Indian consumer’s mind. Unless one falls sick, he does not seek medical attention. And even after he falls sick, the inclination is towards a quick recovery so that he can get back to work. Only recently, this is beginning to change amongst a certain section who have begun to take preventive health check up seriously, and pay attention to nutrition and lifestyle for better health.
With the ratio of doctor: people being very low, doctors are extremely busy treating patients. With less time on hand, they cannot pay attention to patient education or counselling. Nor are they able to give enough time to update their knowledge, even if they wish to. Thus with newer therapies being made available, continuing medical education programs for doctors are becoming increasingly important. Such seminars, conferences and the internet meet this need. Multiple brands, reduced differentiation
With hundreds of companies marketing the same molecules with different brand names, no differentiation between brands, doctors giving just a minute or so to detail, the challenges for today’s pharma marketer are immense.
Improving healthcare infrastructure
With more and more private hospitals being constructed, government spending on healthcare increasing and more number of people accessing health
insurance; the domestic market does provide greater opportunities. However, the mind-set and skill-set needs to be tuned for this.
Access to information on health
People are increasingly accessing information on health, some of which is correct, but most other being confusing and inaccurate. Doctors are facing questions from patients too. This offers a great opportunity for the pharma marketers to provide cutting edge tools to the doctor to help him stay updated, and to reach patients with educational and accurate information. This also opens doors to marketers of OTC and nutraceutical products to reach consumers.
Penetrating rural markets
Some companies have already taken steps to reach rural markets. More innovative strategies to reach these markets are needed for growth. Here again, using technology could be the key. Penetration of the mobile being large in India, this medium offers great opportunity.
Institutes offering pharmaceutical marketing courses:
2. Narsee Monjee Institute of Mgt Studies, Mumbai
3. Indian Institute of Pharmaceutical Marketing,Lucknow
4. SIES, Navi Mumbai
There has never been a more important time for India’s government and its drug producers, both multinational and domestic, to work together in partnership for the good of the industry and the nation. With its enormous advantages, including a large, well-educated, skilled and English-speaking workforce, low operational costs and improving regulatory infrastructure, India has the potential to become the region’s hub for pharmaceutical and biotechnology discovery research, manufacturing, exporting and health care services within the next decade.
For foreign investors, collaborations with India present a huge opportunity both in terms of joint production for the global market and supply of the growing domestic market. There is a need for regulatory reform in India to encourage leading global players to continue and accelerate the outsourcing of their R&D activities-beginning with discovery research-to the subcontinent.