Indian Pharmaceutical Market Outlook · PDF fileIndian Pharmaceutical Market Outlook ... ANDA Filings by Indian Companies, 2012 Sun Pharma Ranbaxy DRL Lupin Cadila ... 5.1.1 Contract

Indian Pharmaceutical Market Outlook Enhanced purchasing power, rural market penetration and expanded access to healthcare attracting Big Pharma investment

GBI Research Report Guidance

© GBI Research. This is a licensed product and is not to be photocopied GBIHC275MR / Published JAN 2013 Page 2

GBI Research Report Guidance

The report discusses the pharmaceutical market in India, and provides information on the overall pharmaceutical and outsourcing market structure, major M&A and licensing deals, and market drivers and restraints.

Chapter three discusses the macroeconomic environment for the industry in India, covering the demographic analysis, drivers, barriers and SWOT.

Chapter four outlines the industry’s most important characteristics, discussing the healthcare policies, regulations, distribution, pricing, taxation, spending, insurance and reimbursement.

Chapter five gives a market analysis for the different segments operating in the industry, namely prescription medicines, biotechnology, Over-The-Counter (OTC) medicines and Contract Research And Manufacturing Services (CRAMS).

Chapter six discusses the market size, recent developments and future outlook for important therapeutic segments such as anti-infectives, cardiovascular and gastrointestinal.

Chapter seven lists key recent trends in the Indian pharmaceutical market, such as rapid consolidations and collaborations, patent litigations favoring generics, and the growing importance of rural marketing and product localization strategies adopted by MNC. Case studies have been used to support these trends.

Chapter eight profiles key domestic and international companies operating in the Indian pharmaceutical market.

Chapter nine discusses the outlook, risks, recommendations and strategies for future success to be adopted by pharmaceutical companies in the country.

© GBI Research. This is a licensed product and is not to be photocopied GBIHC275MR / Published JAN 2013

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Indian Pharmaceutical Market Outlook – Executive Summary

Indian Pharmaceutical Market Outlook – Executive Summary

Indian Generics are expected to Increase Reach and Presence in the Developed and Emerging Markets

Indian companies with strong generic portfolios have been successful in gaining a good foothold in the US pharmaceutical market. Impending patent expiries and healthcare reforms aimed at reducing healthcare spending are expected to drive generics growth in the future. In spite of the patent cliff of 2012, the growth momentum is set to continue due to the strong product pipelines of these companies. Generic manufacturers are leveraging this opportunity by increasing their Abbreviated New Drug Application (ANDA) filings.

The following figure gives the distribution of the ANDA filings made by leading Indian generic companies with respect to their approval status until March 2012.

Pharmaceutical Market, India, ANDA Filings by Indian Companies, 2012

Sun Pharma Ranbaxy DRL Lupin Cadila Glenmark

AN

DA

filin

gs

Cumulative approved Pending approval

Source: GBI Research

Note: It does not include the paragraph IV options for Sun and Cadila

According to the respective company reports, Sun Pharma has one of the highest numbers of ANDA filings among Indian generic players. Dr. Reddy’s Laboratories’ (DRL’s) 25 products have ranked among the top three in the US market in terms of market share at some point. Additionally, Lupin is the fifth largest generic company in the US in terms of prescriptions, with XX of its products becoming market leaders and XX ranking among the top three in terms of market share at some point.

The dependence of Indian companies on Europe is comparatively lower than that for the US. Wockhard has the highest exposure in the region with XX% revenues from Europe. Dr. Reddy’s Laboratories (DRL), Cipla and Intas Pharma too have a considerable presence there. However, these numbers are lower than for the US. Nevertheless, European markets remain important for these companies. Companies have been devising strategies such as enhancing their product portfolio and improving distribution and marketing practices to increase their presence in developed countries.

Impending patent expiries and healthcare reforms aimed at reducing healthcare spending are expected to drive generics growth in the future


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Table of Contents

1 Table of Contents

1 Table of Contents ................................................................................................................................. 5 1.1 List of Tables ............................................................................................................................. 8 1.2 List of Figures............................................................................................................................ 9

2 Indian Pharmaceutical Market Outlook – Introduction .........................................................................10 3 Indian Pharmaceutical Market Outlook – Overview..............................................................................11

3.1 Global Pharmaceutical Industry Landscape ...............................................................................11 3.2 Macro View of the Indian Pharmaceutical Sector ......................................................................12 3.3 Demographic Analysis ..............................................................................................................13

3.3.1 Population Size, Growth, and Structure .............................................................................13 3.3.2 Crude Death Rate .............................................................................................................15 3.3.3 Infant Mortality Rate........................................................................................................16 3.3.4 Life Expectancy at Birth ....................................................................................................17

3.4 Driver and Barriers ...................................................................................................................19 3.4.1 Drivers .............................................................................................................................19 3.4.2 Barriers ............................................................................................................................21

3.5 SWOT Analysis of Indian Pharmaceutical Industry .....................................................................22 4 Indian Pharmaceutical Market Outlook – Industry Characteristics ........................................................23

4.1 Healthcare Policy .....................................................................................................................23 4.1.1 National Health Policy 2002 .............................................................................................23 4.1.2 National Rural Health Mission ..........................................................................................23 4.1.3 National Urban Health Mission .........................................................................................24

4.2 Intellectual Property Rights in India ..........................................................................................25 4.2.1 Effect of Patent Laws on Pharmaceutical Production in India .............................................26 4.2.2 Key Impact of the New Patent Laws on India .....................................................................27 4.2.3 Patent Act 2005 – First Step towards Improving IP Protection ............................................27 4.2.4 IPR Enforcement Rules 2007 .............................................................................................27 4.2.5 Trademarks Bill 2007 ........................................................................................................27 4.2.6 Drugs and Cosmetics Act (Amendment) 2008 ....................................................................27

4.3 Drug Distribution Structure ......................................................................................................28 4.4 National Pharmaceuticals Pricing Policy ....................................................................................29

4.4.1 Objectives of the Present Policy ........................................................................................29 4.4.2 Key Principles of National Pharmaceuticals Pricing Policy, 2011 .........................................29 4.4.3 Principles for Drug Price Control and Determination in National Pharmaceutical Pricing

Policy 2011 ......................................................................................................................30 4.4.4 Other Aspects of the Policy ...............................................................................................30 4.4.5 Impact Analysis of the Policy ............................................................................................31

4.5 Goods and Services Tax ............................................................................................................31 4.5.1 An Introduction to Goods and Services Tax ........................................................................31 4.5.2 Dual Goods and Services Tax in India ................................................................................31 4.5.3 Impact on the Pharmaceutical Industry .............................................................................32

4.6 Direct Tax Code........................................................................................................................33 4.6.1 Tax Structure ...................................................................................................................33 4.6.2 Incentives Available to the Pharmaceutical Sector .............................................................33 4.6.3 Road Ahead .....................................................................................................................33

4.7 Healthcare Spending in India ....................................................................................................34 4.8 Insurance and Reimbursement .................................................................................................35

4.8.1 Private Health Insurance ..................................................................................................35 4.8.2 Health Insurance Companies Landscape ...........................................................................36

5 Indian Pharmaceutical Market Outlook – Market Analysis ....................................................................37 5.1 Market overview......................................................................................................................37


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Table of Contents

5.1.1 Contract Research and Manufacturing Services .................................................................37 5.1.2 Biotech ............................................................................................................................38 5.1.3 Over-the-Counter Drugs ...................................................................................................41 5.1.4 Prescription Drugs ............................................................................................................42 5.1.5 Herbal Medicines .............................................................................................................43

5.2 Market Segmentation ..............................................................................................................44 6 Indian Pharmaceutical Market Outlook – Market Analysis by Therapeutic Categories ...........................46

6.1 Market Share of Leading Therapeutic Segment .........................................................................46 6.2 Anti-Infectives .........................................................................................................................47

6.2.1 Market Size ......................................................................................................................47 6.2.2 Key Brands and Players ....................................................................................................48 6.2.3 Recent Developments .......................................................................................................48 6.2.4 Outlook............................................................................................................................48

6.3 Cardiovascular System .............................................................................................................49 6.3.1 Market Size ......................................................................................................................49 6.3.2 Recent Developments .......................................................................................................50 6.3.3 Outlook............................................................................................................................50

6.4 Gastrointestinal .......................................................................................................................51 6.4.1 Market Size ......................................................................................................................51 6.4.2 Recent Developments .......................................................................................................52 6.4.3 Outlook............................................................................................................................52

6.5 Diabetes ..................................................................................................................................53 6.5.1 Market Size ......................................................................................................................53 6.5.2 Recent Developments .......................................................................................................54 6.5.3 Outlook............................................................................................................................54

6.6 Central Nervous System ...........................................................................................................55 6.6.1 Market Size ......................................................................................................................55 6.6.2 Recent Developments .......................................................................................................56 6.6.3 Outlook............................................................................................................................56

6.7 Respiratory ..............................................................................................................................57 6.7.1 Market Size ......................................................................................................................57 6.7.2 Recent Developments .......................................................................................................58 6.7.3 Outlook............................................................................................................................58

6.8 Dermatology ............................................................................................................................59 6.8.1 Market Size ......................................................................................................................59 6.8.2 Recent Developments .......................................................................................................60 6.8.3 Outlook............................................................................................................................60

6.9 Oncology .................................................................................................................................61 6.9.1 Market Size ......................................................................................................................61 6.9.2 Recent Developments .......................................................................................................62 6.9.3 Outlook............................................................................................................................62

7 Indian Pharmaceutical Market Outlook – Key Trends ...........................................................................63 7.1 Rapid Consolidation and Rise of Multinational Corporations in the Indian Pharmaceutical

Industry ...................................................................................................................................63 7.1.1 M&A Deals.......................................................................................................................63 7.1.2 Licensing Deals.................................................................................................................65 7.1.3 Partnership Deals .............................................................................................................66

7.2 Patent Litigations Favoring Generics .........................................................................................67 7.2.1 Indian Patent Office Revokes Patent for Pfizer’s Cancer Drug Sutent (sunitinib) ..................67 7.2.2 Indian Appeals Body Dismisses Bayer’s Plea for Stay on Natco's Generic Nexavar (sorafenib)

........................................................................................................................................67 7.2.3 Delhi High Court Rules in Favor of Cipla in Roche's Tarceva (erlotinib) Patent Lawsuit ........67


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Table of Contents

7.2.4 Indian Supreme Court Asks Novartis to Scale Down Price of Cancer Drug Glivec (imatinib)..67 7.3 Increasing Importance of Rural Marketing in India ....................................................................68

7.3.1 Case Study - Novartis Arogya Parivar Case Study ...............................................................68 7.4 Product Localization and India-Specific Pricing ..........................................................................70

7.4.1 Case Study - GlaxoSmithKline, Localized Business Model....................................................70 7.5 Sales Strategies ........................................................................................................................71

7.5.1 Case Study - Mankind, Sales Excellence .............................................................................71 7.6 Patented Products Introduced in Niche Segments.....................................................................72

7.6.1 Case Study - Merck’s Successful Strategy for Patented Products.........................................72 7.7 Actions Taken by Indian Government against Counterfeit Drugs ...............................................73

8 Indian Pharmaceutical Market Outlook – Competitive Landscape.........................................................74 8.1 Key Foreign Companies ............................................................................................................74

8.1.1 Sanofi ..............................................................................................................................74 8.1.2 Roche ..............................................................................................................................74 8.1.3 AstraZeneca .....................................................................................................................75 8.1.4 GlaxoSmithKline ...............................................................................................................75 8.1.5 Abbott Laboratories .........................................................................................................75

8.2 Key Domestic Companies .........................................................................................................76 8.2.1 Dr. Reddy’s Laboratories...................................................................................................76 8.2.2 Lupin ...............................................................................................................................78 8.2.3 Cipla Limited ....................................................................................................................80 8.2.4 Ranbaxy Laboratories Limited...........................................................................................81 8.2.5 Biocon .............................................................................................................................83

9 Indian Pharmaceutical Market Outlook – The Way Forward .................................................................85 9.1 Outlook for the Indian Pharmaceutical Industry ........................................................................85 9.2 Risks ........................................................................................................................................86

9.2.1 Currency Fluctuation and Financial Problems will make it Difficult to Sustain Growth .........86 9.2.2 Regulatory Hurdles ...........................................................................................................86 9.2.3 Financial Disparity ............................................................................................................86 9.2.4 Intellectual Property Concerns ..........................................................................................86

9.3 Recommendations ...................................................................................................................87 9.3.1 Improved Links between Industry and Academia ...............................................................87 9.3.2 Focus on R&D Initiatives and Skilled Manpower ................................................................87 9.3.3 Support for Clinical Trials Sector .......................................................................................87 9.3.4 Quality Drugs to be made Affordable and Accessible .........................................................87

9.4 Opportunities Ahead ................................................................................................................88 9.5 Strategies for Future Success....................................................................................................88

9.5.1 Increasing Importance of Biosimilars ................................................................................88 9.5.2 Rural Markets ..................................................................................................................89

10 Indian Pharmaceutical Market Outlook – Appendix..............................................................................90 10.1 Market Definitions ...................................................................................................................90 10.2 Abbreviations ..........................................................................................................................90 10.3 Bibliography ............................................................................................................................92 10.4 Research Methodology ............................................................................................................93

10.4.1 Coverage .........................................................................................................................93 10.4.2 Secondary Research .........................................................................................................93 10.4.3 Primary Research .............................................................................................................93 10.4.4 Expert Panel Validation ....................................................................................................94

10.5 Contact Us ...............................................................................................................................94 10.6 Disclaimer................................................................................................................................94


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Table of Contents

1.1 List of Tables

Table 1: Pharmaceutical Market, India, Share of Pharmaceutical Products in Total Exports and Imports (%), 2012 ................................................................................................................................12

Table 2: Pharmaceutical Market, India, Population by Age Group (%), 2001–2026 .................................13 Table 3: Pharmaceutical Market, India, Crude Death Rate (per 1,000 Population), 1981–2009 ...............15 Table 4: Pharmaceutical Market, India, Infant Mortality Rate by Sex (per 1,000 Live Births), 1980–1998 16 Table 5: Pharmaceutical Market, India, Infant Mortality Rate by Sex (per 1,000 Live Births), 1999–2009 16 Table 6: Pharmaceutical Market, India, Ceiling Price Reduction and Impact, 2012..................................31 Table 7: Pharmaceutical Market, India, Healthcare Expenditure among BRIC Countries, 2012 ................35 Table 8: Pharmaceutical Market, India, Indian Biosimilar Companies with Marketed Products in India,

2010 .......................................................................................................................................40 Table 9: Pharmaceutical Market, India, Retail Market Revenue ($bn), 2007–2011 .................................44 Table 10: Pharmaceutical Market, India, Hospital Market Revenue ($m), 2007–2011 ..............................45 Table 11: Pharmaceutical Market, India, Anti-Infectives Market Revenue, ($bn), 2005–2010 ...................47 Table 12: Pharmaceutical Market, India, Anti-Infectives, Major Companies and Brands, 2011 ..................48 Table 13: Pharmaceutical Market, India, Cardiovascular Market Revenue ($m), 2005–2010.....................49 Table 14: Pharmaceutical Market, India, Gastrointestinal Market Revenue, ($m), 2005–2010 ..................51 Table 15: Pharmaceutical Market, India, Diabetes Market Revenue ($m), 2005–2010 .............................53 Table 16: Pharmaceutical Market, India, Central Nervous System Market Revenue ($m), 2005–2010.......55 Table 17: Pharmaceutical Market, India, Respiratory Market Revenue ($m), 2005–2010 .........................57 Table 18: Pharmaceutical Market, India, Dermatology Market Revenue ($m), 2005–2010 .......................59 Table 19: Pharmaceutical Market, India, Oncology Market Revenue ($m), 2005–2010.............................61 Table 20: Pharmaceutical Market, India, Dr. Reddy’s Laboratories, Strategic Consolidations, 2011–2012 77 Table 21: Pharmaceutical Market, India, Lupin, Strategic Consolidations, 2011 ........................................79 Table 22: Pharmaceutical Market, India, Cipla, Strategic Consolidations, 2012.........................................80 Table 23: Pharmaceutical Market, India, Ranbaxy, Strategic Consolidations, 2011–2012 ..........................82 Table 24: Pharmaceutical Market, India, Biocon, Strategic Consolidations, 2011–2012 ............................84


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Table of Contents

1.2 List of Figures

Figure 1: Pharmaceutical Market, India, ANDA Filings by Indian Companies, 2012 ..................................11 Figure 2: Pharmaceutical Market, India, Growth in Pharmaceutical Products Trade, (%), 2006–2011 .......12 Figure 3: Pharmaceutical Market, India, Population by Age Group (%), 2001–2026 .................................13 Figure 4: Pharmaceutical Market, India, Crude Death Rate (per 1,000 Population), 1981–2009 ...............15 Figure 5: Pharmaceutical Market, India, Infant Mortality Rate by Sex (per 1,000 Live Births), 1980–2009 16 Figure 6: Pharmaceutical Market, India, Life Expectancy at Birth, 1901–2025 .........................................17 Figure 7: Pharmaceutical Market, India, Healthcare Indicators in BRIC Countries, 2012 ...........................18 Figure 8: Pharmaceutical Market, India, Drivers and Barriers, 2012 ........................................................19 Figure 9: Pharmaceutical Market, India, Doctors and Nurses (per 10,000 population), 2010 ....................20 Figure 10: Pharmaceutical Market, India, SWOT Analysis .........................................................................22 Figure 11: Pharmaceutical Market, India, NRHM Progress, 2011...............................................................24 Figure 12: Pharmaceutical Market, India, Intellectual Property Rights Protection Framework, 2010 ..........25 Figure 13: Pharmaceutical Market, India, Regulatory Landscape, Intellectual Property Rights Protection,

1963–2005 .............................................................................................................................26 Figure 14: Pharmaceutical Market, India, Drug Distribution System, 2012 ................................................28 Figure 15: Pharmaceutical Market, India, Healthcare Expenditure, 2009...................................................34 Figure 16: Pharmaceutical Market, India, Healthcare Expenditure among BRIC Countries, 2012 ................34 Figure 17: Pharmaceutical Market, India, Health Insurance Companies Landscape, 2012 ..........................36 Figure 18: Pharmaceutical Market, India, Services Outsourced in Value Chain (%), 2011 ...........................37 Figure 19: Pharmaceutical Market, India, Biotechnology Market Revenue ($m), 2003–2011 .....................38 Figure 20: Pharmaceutical Market, India, Biotechnology Market Segmentation (%), 2011 .........................39 Figure 21: Pharmaceutical Market, India, Market by Sub-sector (%), 2011 ................................................43 Figure 22: Pharmaceutical Market, India, Retail Market Revenue ($bn), 2007–2011 .................................44 Figure 23: Pharmaceutical Market, India, Hospital Market Revenue ($m), 2007–2011 ..............................45 Figure 24: Pharmaceutical Market, India, Market Share by Therapy Area, 2005 and 2010 .........................46 Figure 25: Pharmaceutical Market, India, Anti-Infectives Market Revenue ($bn), 2005–2010 ....................47 Figure 26: Pharmaceutical Market, India, Cardiovascular Market Revenue ($m), 2005–2010.....................49 Figure 27: Pharmaceutical Market, India, Gastrointestinal Market Revenue ($m), 2005–2010...................51 Figure 28: Pharmaceutical Market, India, Diabetes Market Revenue ($m), 2005–2010 .............................53 Figure 29: Pharmaceutical Market, India, Central Nervous System Market Revenue ($m), 2005–2010.......55 Figure 30: Pharmaceutical Market, India, Respiratory Market Revenue ($m), 2005–2010 .........................57 Figure 31: Pharmaceutical Market, India, Dermatology Market Revenue ($m), 2005–2010 .......................59 Figure 32: Pharmaceutical Market, India, Oncology Market Revenue ($m), 2005–2010.............................61 Figure 33: Pharmaceutical Market, India, Number of M&A Deals, 2007–2012 ...........................................63 Figure 34: Pharmaceutical Market, India, M&A Deals, Deals by Value (%), 2007–2012 ..............................64 Figure 35: Pharmaceutical Market, India, Number of Licensing Deals, 2007–2012 .....................................65 Figure 36: Pharmaceutical Market, India, Licensing Deals, Deals by Value (%), 2007–2012 ........................65 Figure 37: Pharmaceutical Market, India, Number of Partnership Deals, 2007–2012 .................................66 Figure 38: Pharmaceutical Market, India, Partnership Deals, Deals by Value (%), 2007–2012 ....................66 Figure 39: Pharmaceutical Market, India, Novartis Arogya Parivar Marketing Mix, 2012 ...........................68 Figure 40: Pharmaceutical Market, India, Novartis Arogya Parivar, Factsheet, 2012 ..................................69 Figure 41: Pharmaceutical Market, India, Mankind Sales Strategies, 2012 ................................................71


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Indian Pharmaceutical Market Outlook – Introduction

2 Indian Pharmaceutical Market Outlook – Introduction

The Indian pharmaceutical industry grew from $XX billion in 1980 to $XX billion in September 2009 (DOP, 2012b). The market has grown at an annual growth rate of XX–XX% between 1980 and 2009 and is expected to grow further in the near future, with big pharmaceutical companies entering the emerging market. With the inflow of major companies’ R&D operations into India, the industry is going to experience significant M&A. Although pharmaceutical giants such as GlaxoSmithKline (GSK) have been present in the market for years, the middle-class population’s rising income, changing patent laws, low-cost skilled labor and low-priced infrastructure in India have attracted Multinational Corporations (MNCs) to the Indian market. With the current scenario, the market is expected to grow at XX–XX% during the 2011–2018 period. Deals and acquisitions are set to continue due to low-cost infrastructure and labor as patent expiries and major companies’ thin pipelines negatively affect revenues. Branded generics are expected to grow in India as many global players are planning to launch branded drugs as branded generics into the market after the patents expire. Ultimately, the once highly fragmented Indian pharmaceutical industry is undergoing strategic consolidations to form a highly organized sector.

The Indian government has started various initiatives to increase insurance coverage and reduce healthcare costs, such as the National Rural Health Mission (NRHM) and Jan Aushadhi. A revised pricing policy has also been proposed, which will increase government control to over XX% of the drugs. Rising income levels, changing disease patterns, increasing reach of healthcare, reduction in out-of-pocket expenditure and growth of new products such as generics and biosimilars are expected to drive growth in the future.

A revised pricing policy has also been proposed, which will increase government control to over XX% of the drugs


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Indian Pharmaceutical Market Outlook – Overview

3.2 Macro View of the Indian Pharmaceutical Sector

The Indian pharmaceutical sector ranks third in terms of volume and XXth in terms of value globally, and accounts for XX% of the total global pharmaceutical production by value. Additionally, it accounts for XX% of the total volume of global generics. India is known to manufacture XX% of the world’s requirement of anti-Human Immunodeficiency Virus (HIV) drugs at a very affordable price (Planning Commission Government of India, 2012). The industry is highly fragmented and comprises almost XX units, with the majority in the small sector and XX–XX in the medium and large organized sector.

Figure 2: Pharmaceutical Market, India, Growth in Pharmaceutical Products Trade, (%), 2006–2011

2006 2007 2008 2009 2010 2011

Year

-on-

year

gro

wth

(%)

Export Import

Source: GBI Research; DOP, 2012b

Year-on-year growth in the import of medicinal and pharmaceutical products decreased in 2011 compared to 2006 (DOP, 2012b). It grew by XX% over 2010 to $XX billion in 2011, attributed to technological improvements to ensure good production quality domestically.

The following table gives the share of pharmaceutical products in exports and imports between 2007 and 2011.

Table 1: Pharmaceutical Market, India, Share of Pharmaceutical Products in Total Exports and Imports (%), 2012

2007 2008 2009 2010 2011

Drugs, pharmaceuticals, and fine chemicals in total export

Medicinal and pharmaceutical products in total import

Source: GBI Research; DOP, 2012b

The share of exports of drugs, pharmaceuticals, and fine chemicals in the total national exports declined from XX% in 2007 to XX% in 2011, but in absolute terms actually increased. The share of imports declined from XX% to XX% in the same period.

The Indian pharmaceutical sector ranks third in terms of volume and XXth in terms of value globally, and accounts for XX% of the total global pharmaceutical production by value


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Indian Pharmaceutical Market Outlook – Market Analysis

5.1.5 Herbal Medicines

India is the world’s largest producer of medicinal herbs. The last few years have seen exponential growth in the field of herbal medicine, which are gaining popularity in both developing and developed countries due to their natural origin and the fact that they produce fewer side effects. Many traditional medicines in use are derived from medicinal plants, minerals and organic matter. The WHO lists XX plants used for medicinal purposes around the world. Of these, XX species are in India, of which XX species are used commercially on a fairly large scale. The use of ayurvedic medicines is common in both adults and children and is increasing in many areas of the world. Herbal medicines are used in antipyretic, antiulcer, antidiabetic and anti-cancerous treatments.

Figure 21: Pharmaceutical Market, India, Market by Sub-sector (%), 2011

Patented drugs

OTC medicines

Generic drugs

Source: GBI Research


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Indian Pharmaceutical Market Outlook – Appendix

10 Indian Pharmaceutical Market Outlook – Appendix

10.1 Market Definitions

GDP: GDP is the market value of all final goods and services made in a country in one year.

Healthcare expenditure: Healthcare expenditure is the amount of money spent on healthcare services, drugs or procedures.

Out-of-pocket healthcare expenditure: Out-of-pocket healthcare expenditure refers to costs that are not covered by insurance such as deductibles, coinsurance, co-payments, and non-covered expenses.

Essential drugs: Essential drugs are those that satisfy the primary healthcare needs of the population.

WAP: WAP is determined by assigning a weight (number) to each quantity to be averaged. The weight assigned is based on the relative importance of each quantity.

Ceiling prices: The ceiling price is the maximum price, set by law, at which a manufacturer can sell its products.

Wholesale price index: A wholesale price index measures and tracks the alterations in product prices before reaching the retail level.

10.2 Abbreviations

ANDA: Abbreviated New Drug Application

API: Active Pharmaceutical Ingredient

ARV: Antiretroviral

ASHA: Accredited Social Health Activist

ASM: Area Sales Manager

CAGR: Compound Annual Growth Rate

CBHI: Community-Based Health Insurance

CDSCO: Central Drugs Standard Control Organization

CFA: Clearing and Forwarding Agent

CGST: Central Goods and Services Tax

CNS: Central Nervous System

CRAMS: Contract Research and Manufacturing Services

CRO: Clinical Research Organizations

CST: Central Sales Tax

CVD: Countervailing Duty

DMF: Drug Master Filing

DOP: Department of Pharmaceuticals

DPCO: Drug Price Control Order

DPP-4: Dipeptidyl Peptidase-4

DRL: Dr. Reddy’s Laboratories

DTC: Direct Tax Code

EDQM: European Directorate of Quality Medicine

FDA: Food and Drug Administration

FDI: Foreign Direct Investment


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GABA: Gamma-Aminobutyric Acid

GC-C: Guanylate Cyclase-C

GDP: Gross Domestic Product

GSK: GlaxoSmithKline

GST: Goods and Services Tax

HIV: Human Immunodeficiency Virus

IGST: Integrated Goods and Services Tax

IMR: Infant Mortality Rate

IPAB: Intellectual Property Appellate Board

IPR: Intellectual Property Right

IRDA: Insurance and Regulatory Development Authority

mAb: Monoclonal Antibody

MAT: Moving Average Turnover

MHRA: Medicines and Healthcare Products Regulatory Agency

MMR: Maternal Mortality Rate

MNC: Multinational Corporation

MOHFW: Ministry of Health and Family Welfare

MR: Medical Representative

MRSA: Methicillin Resistant Staphylococcus Aureus

NCE: New Chemical Entities

NLEM: National List of Essential Medicines

NPA: National Pharmaceuticals Association

NPPP: National Pharmaceutical Pricing Policy

NRHM: National Rural Health Mission

NUHM: National Urban Health Mission

OAD: Oral Anti-diabetic Drug

OPPI: Organization of Pharmaceutical Producers of India

OTC: Over-the-Counter

PPP: Public Private Partnership

RIM: Radiation Induced Mucositis

RSBY: Rashtriya Swasthya Bima Yojana

SGST: State Goods and Services Tax

TRIPS: Trade-Related Aspects of Intellectual Property Rights

UNICEF: United Nations Children Emergency Fund

VAT: Value Added Tax

WAP: Weighted Average Price

WHO: World Health Organization

WTO: World Trade Organization


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10.3 Bibliography

Association of Biotechnology Led Enterprises (2012). Top 20 Industry Insights. BioSpectrum India. Available from: http://www.ableindia.in/pdf/reports24_10_survey.pdf.

Bhattacharjya AS and Sapra PK (2008). Health Insurance In China And India: Segmented Roles For Public And Private Financing. Health Affairs; 27(4): 1005–1015.

Department of Pharmaceuticals (2012a). Draft National Pharmaceuticals Pricing Policy, 2011. Department of Pharmaceuticals. Available from: http://pharmaceuticals.gov.in/mshT2810/FTY2.pdf.

Department of Pharmaceuticals (2012b). Annual Report 2011–2012. Department of Pharmaceuticals. Available from: http://www.pharmaceuticals.gov.in/. [Accessed September 26, 2012].

Food and Drug Administration (2012). About FDA-The coming changes will make the FDA's product safety and quality responsibilities formidable and more global in the years ahead. Food and Drug Administration. http://www.fda.gov/AboutFDA/CentersOffices/OfficeofGlobalRegulatoryOperationsandPolicy/GlobalProductPathway/ucm259754.htm [Accessed September 18, 2012].

Indian Credit Rating Agency Limited (2012). Indian Pharmaceutical Industry. ICRA. Available from: http://www.icra.in/Files/ticker/Indian%20Pharmaceutical%20Sector.pdf

Kalaskar PB, et al. (2012). Effective Marketing Strategies Makes All the Difference: A Study With Reference To Mankind Pharma. International Journal of Business and Management Tomorrow; 2(4): 1–7.

Ministry of Health and Family Welfare (2009). Family Welfare Statistics in India 2009. Available from: http://nrhm-mis.nic.in/UI/FamilyWelfare2009/03%20Section-A/03%20Sec-A-16-%281-70%29.pdf.

Ministry of Health and Family Welfare (2011). Family Welfare Statistics in India 2011. Available from: http://www.2cnpop.net/uploads/1/0/2/1/10215849/mohfw_statistics_2011_revised_31_10_11.pdf.

Novartis (2012). Arogya factsheet. Novartis. Available from: http://www.novartis.com/downloads/corporate-responsibility/arogya-factsheet.pdf.

Organization of Pharmaceutical Producers of India (2012). 46th Annual Report. OPPI. Available from: http://www.indiaoppi.com/memrfildat/publications834845dre/Annual%20Report%2046th%20AGM%202011-12_1.pdf.

Planning Commission Government of India (2012). Report of the Working Group on Drugs and pharmaceuticals for the twelfth five-year plan. Planning Commission. Available from: http://planningcommission.nic.in/aboutus/committee/wrkgrp12/wg_pharma2902.pdf

Reddy S (2007). Report on Steps to be taken by Government of India in the context of Data Protection Provisions of Article 39.3 of TRIPS Agreement. Ministry of Chemicals and Fertilizers Government of India. Available from: http://chemicals.nic.in/DPBooklet.pdf.

World Health Organization (2012). World Health Statistics, 2012. Available from: http://www.who.int/gho/publications/world_health_statistics/EN_WHS2012_Full.pdf [Accessed September 18, 2012].


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10.4 Research Methodology

GBI Research’s dedicated research and analysis teams consist of experienced professionals with a pedigree in marketing, market research, consulting backgrounds in the medical devices industry and advanced statistical expertise.

GBI Research adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and the Society of Competitive Intelligence Professionals (www.scip.org).

All GBI Research databases are continuously updated and revised. The following research methodology is followed for all databases and reports.

10.4.1 Coverage

The objective of updating GBI Research’s coverage is to ensure that it represents the most up-to-date vision of the industry possible.

Changes to the industry taxonomy are built on the basis of extensive research of company, association and competitor sources.

GBI Research aims to cover all major news events and deals in the medical industry, updated on a daily basis. The coverage is further streamlined and strengthened with additional inputs from GBI Research’s expert panel (see below).

10.4.2 Secondary Research

Secondary research was carried out on internal and external sources to obtain qualitative and quantitative information in the report.

The secondary research sources that are referred to in this report include but are not limited to:

Company websites, annual reports, financial reports, investor presentations and SEC Securities and Exchanges Commission filings.

Industry trade journals, scientific journals and other technical literature.

Relevant patent and regulatory databases.

National government documents, statistical databases and market reports.

News articles, press releases and webcasts specific to the companies operating in the market.

10.4.3 Primary Research

GBI Research conducts hundreds of primary interviews each year with industry participants and commentators in order to validate its data and analysis. A typical research interview fulfills the following functions:

It provides first-hand information on the market size, market trends, growth trends, competitive landscape, future outlook

Helps in validating and strengthening the secondary research findings; and

Further develops the analysis team’s expertise and market understanding.

Primary research involves email correspondence and telephone interviews, as well as face-to-face interviews for each market, category, segment and sub-segment across geographies.

The participants who typically take part in such a process include, but are not limited to:

Industry participants: CEOs, VPs, marketing/product managers, market intelligence managers and national sales managers;

Hospital stores, laboratories, pharmacies, distributors and paramedics;

Outside experts: investment bankers, valuation experts, research analysts specializing in specific medical equipment markets; and


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Key Opinion Leaders: physicians and surgeons specializing in different therapeutic areas corresponding to different kinds of pharmaceutical drugs.

10.4.4 Expert Panel Validation

GBI Research uses a panel of experts to cross-verify its databases and forecasts.

GBI Research’s expert panel comprises marketing managers, product specialists, international sales managers from medical device companies, academics from research universities, KOLs from hospitals, consultants from venture capital funds and distributors/suppliers of medical equipment and supplies.

Historic data and forecasts are relayed to GBI Research’s expert panel for feedback and adjusted in accordance with their feedback.

10.6 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means; electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GBI Research.

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