INVEST INDIA : Opportunities in the World's Largest Democracy

Pharmaceuticals &
Biotechnology

OVERVIEW

SIZE

The Indian Pharmaceutical industry is about US$13 billion (2006-07 revenues)
India occupies a significant position in the world pharma market
- 8% by volume (fourth largest in the world) and 1% by value
- The pharma industry exports over US$6 billion. It ranks 17th in terms of export value
India has a low per capita annual spend of US$5 on pharma products and ranks 67th in the world
India accounts for 22% of the global generics market
India has a nascent but rapidly growing Biotech industry - US$2.1 billion in revenues in 2006-07
- 58% of revenue from exports

STRUCTURE

The Pharmaceutical industry in India is fragmented with over 3,000 small/medium sized generic pharma manufacturers
- International pharmaceutical majors like Pfizer, Johnson & Johnson, Glaxo SmithKline and Novartis have an established presence in India
The Biotech industry is seeing the emergence of several domestic private players with world-class capabilities
- International majors like Monsanto, Syngenta and Aventis are already in India and are focusing on the Bio-agriculture segment

POLICY

FDI up to 100% is permitted through the automatic route for the manufacture of drugs and pharmaceuticals provided the activity does not attract compulsory licensing or involve the use of recombinant DNA technology and specific cell/tissue targeted formulations
The Patent (Amendment) Act enacted in April 2005 introduces product patent regime for food, chemical and pharmaceutical products – TRIPs compliant
Consolidation likely in the fragmented Pharma industry due to recent legislation and policy updates
- Good Manufacturing Practices (GMP) outlined in Schedule M to the Drugs and Cosmetics Rules revised
- Manufacturing units are required to comply with the WHO and international standards of production

Major players and presence in value chain

Company	Revenues¹ (FY 07, US$ million)	Value Chain Presence
		R & D	Manufacturing	Marketing
Domestic Private Players
Ranbaxy (CY 07)	1,498
Dr. Reddy’s	1,617
Cipla	877
International Private Players (CY 06)
Glaxo SmithKline India	387
Pfizer - India	167
Novartis - India	135

¹Revenues in India, consolidated
Source: Capitaline Database, Company web-site

OPPORTUNITY


Pharma Industry is growing at over 20% p.a.	India is emerging as a hub for biotech research

OUTLOOK

The Indian Pharmaceutical industry (including exports) is expected to grow at 24% p.a. till 2010
- The pharma industry is expected to grow to US$25 billion by 2010
The Biotech industry is projected to grow at a CAGR of 33%, with India expected to have a significant share of the global market

POTENTIAL

India is an attractive global sourcing destination for pharmaceuticals
- Availability of low-cost, high-quality production and regulatory compliance
- Large and growing US FDA-approved plant capacity
- Synthetic chemistry talent for early stage compound development
- Low cost of research and world-class testing facilities
  - Cost of a research scientist in India is only about 1/6th to 1/4th of that in USA
Major opportunities in pharmaceuticals are in the following areas:
- Marketing of Patented Drugs
- Contract Research and Manufacturing (CRAM)
- IT-enabled services including clinical/market data analysis
- Clinical trials: revenues to grow from US$70 million (2002) to US$1-1.5 billion by 2010 driven by a 60% cost advantage and large gene pool for trials
Major opportunities in Biotechnology are in the areas of Bio-informatics, Bio-pharma, Bio-agri and Bio-services
Many international biotech companies like Chiron Corp, GSK and Sigma Aldrich Corp have expressed interest, especially in Bio-manufacturing
Organised pharma retail is at a nascent stage in India with several corporates expressing interest in making an entry

For additional information: Department of Pharmaceuticals, Ministry of Chemicals and Petrochemicals (http://www.nic.in/cpc), Organisation of Pharmaceutical Producers of India, Indian Drugs Manufacturers Association (http://www.indiaoppi.com, http://www.idma-assn.org), Department of Biotechnology, Ministry of Science and Technology (http://dbtindia.nic.in), All India Biotech Association (http://www.aibaonline.com)