march 2005 indian pharmaceutical industry riding a growth wave
TRANSCRIPT
March 2005
Indian Pharmaceutical Industry
Riding a Growth Wave
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
India - An Introduction
Population
States/UTs
Geographical Area
Languages recognised
Business language
Per Capita Income**
GDP**
Over 1 bn
35
3.3 mn sq kms
22
English
US$ 534
US$ 650 bnSource:CSO Statistics**(at factor cost & at current prices)
1USD=43.54 INR (as on July 4, 2005)
March 2005
India - Fast pace Growth
Largest democracy
4th largest economy by PPP index
6th largest energy consumer
ForEx reserves skyrocket from US$ 42 bn (2001) to
US$ 133 bn (February, 2005)
GDP growth to continue between 6-8%
3rd largest economy by 2050: Goldman Sachs
Leading in IT & BPO
Oil & Gas and Biotechnology sunrise industries
March 2005
India - Leading the world
Hero Honda - largest manufacturer of motorcycles
Moser Baer - 3rd largest optical media
manufacturer in world
Pharmaceutical Industry - 4th largest in world
Walmart, GAP, Hilfiger sources more than
USD 1bn worth apparel from India
100 Fortune 500 have set R&D facilities in India
including GE, Delphi, Eli Lilly, HP, Heinz and Daimler
Chrysler
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Pharma Market
Volume – wise 8% of global market
4th largest in the world
CAGR(1995-2002) 16.6%
Exports 23%
CAGR(1995-2002)
Size (2002-03) US$ 7 bn
Share of formulations 80%
Size 2010 (estimated) US$ 25 bn
March 2005
Exports
CAGR (over last decade ) 26%
Rate of growth (2003) 21%
Export destinations US, Germany, Russia, UK and China
India - Net exporter of pharmaceutical products
Exports (2002-2003) US$ 2.8 bn
March 2005
Increased R&D Focus
Shift from business-driven research to research-driven business
March 2005
Increasing R&D Spend
1996 -2002
Annual recurring R&D expense growth rate 32.3% yoy
March 2005
Resurgence of FDI
100% automatic FDI approvals
to aid increased investment in
R&D infrastructure by MNCs
Resurgence of FDI in the Pharma Sector
Source: CMIE
March 2005
Quality Assurance in Manufacturing
India has the highest number of USFDA approved plants outside the US
GMP compliant
Approved by international bodies - US FDA, UK MCA,
South African MCC
Manufacturing facilities
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Domestic Players
Ranbaxy Largest pharma company in India;Laboratories Annual revenues of US$1bn
Dr Reddy’s Indian company with presence in Laboratory more than 50 countries
Cipla One of the lowest cost manufacturer of anti-HIV drugs in the world
Wockhardt Largest Indian pharmaceutical company in UK
Nicholas Piramal Aggressively investing in R & D
March 2005
MNC Presence in India
GlaxoSmithKline Leads in 6 of the 10 therapeutic categories
Pfizer Owns the two largest selling brands in India
Astra Zeneca Involved in cardiovascular,respiratory, maternal healthcare & pain control and anasthesia
Aventis Indian manufacturing sites identified as potential global sourcing unitsby global parent company
March 2005
MNC Presence in India
Novartis Collaborations with Dr Reddy’s and Torrent
Wyeth Contract-manufacturing tie-upwith Indian major Bharat Biotech
Sanofi-Synthelabo Present in cardiology, thrombosis & neuropsychiatry
Roche Already invested US$ 20 mn in India and plans additionalUS$ 7.35 mn in 2004-05
Merck Leader in laboratory reagents market in India
March 2005
MNC Activity in India
Novartis AG seeking tie-ups with Indian companies
Bristol-Myers to enter India again
Aventis’s Goa unit to be sourcing hub
Pfizer India doubles research investment in India
AstraZeneca, Glaxo to make India R&D hub
Chiron to make India its Asian hub
Bayer AG to make India sourcing hub
Eli Lilly to make India sourcing hub
German major Boehringer Ingelheim to enter India
India to be Roche's global hub for bulk drugs
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
USD 70 mn market (2001-02)
Growing at 20% per annum
Outsourcing - fastest growing
area for new investment
US$ 1 bn opportunity by 2010
Clinical research
Invest in India
Contract Research
March 2005
Invest in India
Custom synthesis Largest pool of trained analytical
and development chemists
Excellent track record of innovation
US FDA approved manufacturing
facilities
30-50% cost savings
March 2005
Invest in India
Global Outsourcing opportunity
worth US$ 15 bn by 2010
Global majors to outsource
manufacturing from India
API sourcing and
contract
manufacturing
March 2005
Invest in India
Pre clinical testing Superior and low cost chemical synthesis skills advantages
Clinical trials India to be an outsourcing centre for conducting low cost clinical trials
Collaborative R&D
GlaxoSmithKline has R&D alliance with Ranbaxy Laboratories
March 2005
Export from India
Source: SSKI
Exports drive growth for Indian pharmaceutical majors
March 2005
Export from India
Generics - The key driver for export growth
Source: SSKI
March 2005
Partner with India
Marketing alliances - A win-win strategy
Increased market penetration
Zydus Cadila has strategic agreement with Schering AG
Nicholas Piramal has 5 year strategic alliance with
Biogen Idec
March 2005
Partner with India
Process reengineering expertise
Low-cost scientific manpower available
Low capital requirement for NDDS research
Fast clearances from regulatory authorities
New Drug Delivery System (NDDS)
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Advantage India
Excellent chemical synthesis skills
Successful scaling up of laboratory processes to plant-size
Cost-effective and commercially viable non-infringing
processes
Pool of low-cost and highly skilled medical professionals
Manufacturing facilities of international standards
Quick absorption of new technology
March 2005
Indian Pharmaceutical Act
Reduction in number of drugs under price control to 28 as
against 74
100% foreign investment automatically permitted
Abolishment of industrial licensing for bulk drugs,
intermediates and formulations
Automatic approval for Foreign Technology Agreements
March 2005
Regulatory Scenario
IPR/Patent regulations
Product patent regime to be implemented by Jan 1 2005
in compliance with TRIPS
Price regulations
Price controls decline substantively
Product and quality regulations
2 8
3 7 0
1 4 3
7 4
1 9 7 9 1 9 8 7 1 9 9 5 2 0 0 5
(E)
2 8
3 7 0
1 4 3
7 4
1 9 7 9 1 9 8 7 1 9 9 5 2 0 0 5
(E)
March 2005
Policy Incentives
Tax exemptions at par with IT
Reduction in peak custom duties from 30% to 25%
Increase on rate of depreciation on life saving
equipment from 25% to 40%
Income from royalty on drugs licensed to foreign
companies exempted from tax
Tax holiday for R&D companies
March 2005
Key Features
• 22% increase in allocation under the National Rural Health Mission
• Formation of a SME Growth Fund to provide equity support to small & medium units in the pharmaceutical & biotechnology sectors.
• Import duty on select equipments used in pharmaceutical & biotech research reduced from 20% to 5%.
• 150% weighted deduction on R&D expenditure
Union Budget 2005-06
Fillip to R&D initiatives
March 2005
Pharmaceuticals
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Contact in India
Confederation of Indian Industry (CII)
23, Institutional AreaLodi RoadNew Delhi – 110003
Tel 0091 11 24629994-97Fax 0091 11 24626149/24615693Email [email protected]