Growth Story of Pharma Companies in India
The pharma industry in India has witnessed a robust growth over the past few years. The country now ranks 3rd worldwide by volume of production and 13th by value production. It has shown tremendous progress in terms of infrastructure development, technology base creation and a wide range of products. The industry produces bulk drugs belonging to all major therapeutic groups requiring complicated manufacturing technologies.
Stages of growth
The evolution of pharma industry in India may be set into four stages.
- The first stage is the period before the year 1970 in which the Indian market was dominated by foreign companies with little domestic participation.
- The second stage (1970 to 1990) when several domestic companies started operations. The export initiatives were taken during this period.
- The third stage (1990–2010) was the period of when pharma industry in India launched operations in foreign countries.
- The fourth stage started after the Patents Act was amended in 2005 .This led to adoption of product patents in India and the Indian pharma companies became major generic drug manufacturers.
- The increase in FDI flows has helped in the expansion, growth, and development of the industry.
- The cost of manufacturing pharma products is less and effective comparing to other countries.
- The technology development and the highly skilled workforce is available
- The export of generic drugs to the developed markets is expected to increase.
- Immense scope to position India as a centre for international clinical trials
- Less investment in research and development and the product patent regime is one of the major threats to domestic Industry. To face this threat the industry is to take up R&D initiative aggressively.
- As compared to other expenditures by households the expenditure incurred on health care is negligible.
- The manufacture of low and fake medicines which are having low quality is a threatening to this industry.
- The future perspective of this industry is based on the high burden of disease, good increase in the higher disposable incomes of the individuals, improvements in health care infrastructure and improved health care financing.
- The companies are to adopt new business models and think of innovative ideas to the best satisfaction of the consumers.
- The Pharma companies in India may continue to grow organically and inorganically through alliances and partnerships.
- They have to focus on improving operational efficiency and productivity continuously.
- The developments in the health insurance, medical technology, and mobile telephony can help the growth of the pharma industry by removing financial and physical barriers to health care access in India.
With numerous strengths and a growing consumer class, the pharma industry in India may face certain legacy and new challenges, but it is expected to grow exponentially and continue to be an attractive investment.