PHARMACEUTICALS

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SUMMARY
  • At the same time, Indian pharmaceuticals market is expected to touch USD 55 billion by 2020 from USD 36.7 billion in 2016, growing at a compound annual growth rate (CAGR) of 15.92 per cent
  • By 2020, India is likely to be among the top three pharmaceutical markets by incremental growth and sixth largest market globally in absolute size
  • There are over 10,500 manufacturing units and 3,000 pharma companies in India. Over 60,000 generic brands exist across 60 therapeutic categories
  • India accounts for 20% of global exports in generics, making it the largest provider of generic medicines globally. Indian vaccines are exported to 150 countries
REASONS TO INVEST
  • Indian Health Care is expected to rise at a rate of CAGR of 29% during 2015-20 to US $280 billion with rising income, greater health awareness, increased precedence of lifestyle diseases and improved access to insurance
  • The new National Health Protection Scheme will provide hospitalization cover to over 100 million poor and vulnerable families. Finally, the scheme will provide coverage up to USD 7,700 per family per year for secondary and tertiary care hospitalization
  • Medical tourism to India is on a rise, primarily due to its expertise in cardiac and orthopedic procedures, in addition to other specialized areas like neuro-surgeries, cancer treatment and organ transplantation
  • Drugs worth USD 130 billion are expected to go off patent between FY17 to FY22, presenting a huge market opportunity for Indian manufacturers
  • With increasing penetration of chemists, especially in rural India, OTC drugs will be readily available.
  • Pharma companies have increased spending to tap rural markets and develop better infrastructure. The market share of hospitals is expected to increase from 13.1% in 2009 to 26% in 2020.
  • Over USD 200 Billion is to be spent on medical infrastructure in the next decade.
  • Following the introduction of product patents, several multinational companies are expected to launch patented drugs in India.
  • India’s cost of production is significantly lower than that of the USA and almost half of that of Europe.
  • Presence of a skilled workforce as well as high managerial and technical competence.
STATISTICS
  • India’s total exports of Pharmaceuticals (APIs, Generics and Alternative system of medicine) during 2016-17 was USD 16.8 billion
  • India has a market share of almost 42% of Generic drugs produced globally, a market size of Africa and Middle East put together.
  • North America is India’s largest export market, receiving over 34% of India’s pharmaceuticals exports. Africa is the second largest, receiving over 19% of India’s exports.
  • The Indian pharmaceutical industry is largely dominated by generics drugs as the industry earns around 70% of its revenues from the same.
  • India’s Pharmaceutical industry has filed the highest number of Drug Master Files (DMFS) with USFDA and by the end of year 2016, number of filings stands at 3,950. India’s Abbreviated New Drug Applications (ANDAS) totaling over 4,000 by June 2017.
FDI POLICY
  • 100% FDI has been allowed through automatic route for Greenfield pharmaceuticals projects
  • For Brownfield pharmaceuticals projects, FDI has been allowed up to 74% through automatic route and beyond that through government approval
SECTOR POLICY

Provisions of Budget 2018-19

  • The allocation to the Ministry of Health and Family Welfare has increased by 11.5 per cent to USD 8 billion
  • In a bid to make healthcare more accessible, new Health and Wellness centres are being established with USD 185 Million already allocated. These centres will provide essential drugs and diagnostics services free of cost. The centres are also designed to provide comprehensive health care, including treatment and medication for non-communicable diseases as well as maternal and child health services.
  • The numbers behind the world’s largest government funded health care programme are staggering: It will provide hospitalization cover to over 100 million poor and vulnerable families. The scheme will provide coverage up to USD 7,700 per family per year for secondary and tertiary care hospitalization.
  • The increased expenditure on healthcare is expected to benefit the pharmaceutical sector as well

The National Pharmaceutical Pricing Policy, 2012 (NPPP-2012) has been notified on December 7, 2012. The salient features of the NPPP-2012 are as under:

  • The regulation of prices of drugs on the basis of the essentiality of drugs as specified under the National List of Essential Medicines (NLEM) – 2011.
  • The regulation of prices of drugs on the basis of regulating the prices of formulations only.
  • The regulation of prices of drugs on the basis of fixing the ceiling price of formulations through Market Based Pricing.
  • The provision of exemptions to drugs manufactured through indigenous R&D from price control for five years.
  • A Drug Price Control Order 2013 has been notified in May 2013 to implement the provisions of NPPP-2012.
FINANCIAL SUPPORT

Research & Development

  • Weighted tax deduction of 200% under section 35 (2AB) of the Income Tax Act for both capital and revenue expenditure incurred on scientific research and development. Expenditure on land and buildings are not eligible for deduction.
INVESTMENT OPPORTUNITIES
  • Emerging segments such as Biosimilars and Specialty drugs
  • Contract Research and Manufacturing Services (CRAMS)
FOREIGN INVESTORS
  • Teva Pharmaceuticals (Israel)
  • Nipro Corporation (Japan)
  • Procter & Gamble (USA)
  • Pfizer (USA)
  • Glaxo Smith Kline (UK)
  • Johnson & Johnson (USA)
  • Otsuka Pharmaceutical (Japan)
  • AstraZeneca (Sweden-UK)
KEY ACHIEVEMENTS
  • Indian Drugs and Pharmaceuticals Limited (IDPL), Gurgaon modernized for mass production of drugs for diabetes, oncology, nephrology and cardiology
  • 1143 Jan Aushadi stores are operationalized
  • Coronary Stents price reduced by 85%
  • ‘Pharma Data Bank’ launched to facilitate online filing of mandatory returns
  • Pharma Jan Samadhan & Pharma Sahi Daam launched
  • 11 National Institutes of Pharmaceutical Education & Research (NIPERs) approved
SOURCES
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