India Pharmaceuticals and Healthcare Industry Update Quarter 3 2012

  • June 2014
  • -
  • Business Monitor International
  • -
  • 149 pages

Includes 3 FREE quarterly updates

BMI View: India's pharmaceutical regulator should drop its requirement for local clinical trials in order for a new medicine to receive approval. The country does not have the necessary number of trained professionals to effectively monitor the costly and timely process. Patients would benefit from more rapidly introduced pharmaceuticals, and drugmakers would also see higher commercial upside if the requirement was withdrawn. Like most other emerging industries, India should follow the guidance of regulatory agencies in developed states, namely the US Food and Drug Administration and the European Medicines Agency. If a country insists on local clinical trials ahead of approval, it must have the resources to do so as the Japanese Ministry of Health, Labour and Welfare does.

Headline Expenditure Projections
- Pharmaceuticals: INR730bn (US Dollar 15.6bn) in 2011 to INR846bn (US Dollar 17.4bn) in 2012; +15.9% in local currency terms and +11.5% in US dollar terms. Our projection is unchanged from Q212.
- Healthcare: INR3,353bn (US Dollar 71.8bn) in 2011 to INR3,748bn (US Dollar 77.3bn) in 2012; +11.8% in local currency terms and +7.6% in US dollar terms. Our projection is unchanged from Q212.
- Medical devices: INR139bn (US Dollar 3.0bn) in 2011 to INR156bn (US Dollar 3.2bn) in 2012; +12.2% in local currency terms and +8.0% in US dollar terms. Our projection is unchanged from Q212. Risk/Reward Rating: India’s Pharmaceutical Risk/Reward Rating (RRR) score has dropped from 56.0 in Q212 to 54.4 in Q312 due to falls in its market risks and country risks scores. As a result, India’s position on the proprietary ranking system is now 10th out of 18 countries, falling a position behind New Zealand.

Headline Expenditure Projections

- In May 2012, the upper house of the Indian parliament, Rajya Sabha, strongly criticised the operations of the Central Drugs Standard Control Organisation. It cited several shortcomings, including understaffing, lack of qualifications among key personnel, acting in the interests of commercial entities, approval of medicines that are banned in other industries, substandard postmarketing surveillance activities, and a failure to demand local clinical trials for drugs to be approved.
- The Indian Controller General of Patents Designs and Trademarks granted its first compulsory licence for a patented pharmaceutical in March 2012. Local firm Natco Pharma is now allowed to sell the anti-cancer agent sorafenib, which is the active ingredient in GermanyIndia based Bayer's Nexavar in return for a 6% royalty to the originator. Bayer was 'disappointed with the decision' and launched an appeal in May 2012.
- In March 2012, Roche planned to introduce two cheap cancer drugs to the Indian industry . The strategy comes after the Indian government confirmed it would take patent exclusivity rights away from industry players who employed pricing strategies that put drugs out of reach for most citizens in the country.
- In March 2012, the Indian Department of Pharmaceuticals (DoP) decided to abandon the controversial market -friendly National Pharmaceutical Pricing Policy (NPPP). The NPPP was designed to cap the retail prices of 348 necessary medicines at the average price of the three bestselling brands and to stick with the production cost as the benchmark.

BMI Economic View:
A modest growth print of 5.3% year-on-year in Q4 FY2011/12 (January-March) and soaring twin deficits in the fiscal and current accounts have convinced consensus to dramatically derate India's economic outlook, with most calling for much weaker headline expansion in the current fiscal year. While the current state of play appears dire, we still see sufficient evidence to suggest that the investment cycle has bottomed out and that economic growth will re-accelerate within a couple of quarters. Our core view is that real Gross Domestic Product growth will come in at an improved 6.9% in FY2012/13, up from a nine-year low of 6.5% in the previous fiscal year.
BMI Political View: While India's 60-year-old democracy has withstood the test of poverty, the coming decade will show whether it can withstand the test of rising prosperity. Against a backdrop of economic growth, India's government will need to work even harder to combat poverty and inequality, invest in education and infrastructure, and clamp down on corruption in order to satisfy an increasingly cognisant electorate. Meanwhile, icy relations with neighbouring Pakistan and growing competition with China will continue to dominate India's international agenda. Failure to address these shortcomings could see social disharmony and pockets of fundamentalism continue to ferment at the grassroots level.

Table Of Contents

Industry SWOT Analysis ..... 7
India Pharmaceutical Industry Environment and Risk Analysis ... 7
India Political Environment and Risk Analysis ......... 8
India Economic Environment and Risk Analysis ....... 8
India Business Environment SWOT ....... 9
Pharmaceuticals Risk/Reward Ratings .... 11
Data : Asia Pacific Pharmaceutical Risk/Reward Ratings, Q312 11
Rewards ....... 12
Risks .. 12
India - Industry Summary ........ 13
Regulatory Environment........ 14
Data : Department Of Pharmaceuticals’s Reponsibilities . 16
Pharmaceutical Advertising ....... 17
Pharmacovigilance 18
IP Regime .... 18
Data : History Of The Indian Patent System .. 19
Patent Disputes ...... 22
Counterfeit Medicines ...... 23
Pricing Policy ........ 24
Compulsory Licences ....... 27
Industry Trends And Developments ........ 28
Epidemiology ......... 28
Healthcare Segment .. 30
Healthcare Funding ......... 32
Healthcare Insurance ...... 33
Research And Development ....... 33
Clinical Trials ........ 34
Foreign Direct Investment ......... 35
Traditional Medicines ...... 36

Market Projection Scenario ... 37
Overall Industry Projection .. 37
Data : Pharmaceutical Sales Indicators from 2008 to 2016 38
Key Growth Factors - Market .. 39
Data : Healthcare Expenditure Indicators from 2008 to 2016 ...... 40
Data : Healthcare Governmental Indicators from 2008 to 2016 .. 41
Data : Healthcare Private Indicators from 2008 to 2016 .... 41
Key Growth Factors - Macroeconomic ......... 42
Prescription Drug Industry Projection ..... 48
Data : Prescription Drug Sales Indicators from 2008 to 2016 ...... 49
Patented Drug Industry Projection 50
Data : Patented Drug Industry Indicators from 2008 to 2016 ......... 51
Generic Drug Industry Projection ... 52
Data : Generic Drug Sales Indicators from 2008 to 2016 ... 53
OTC Medicine Industry Projection 54
Data : OTC Medicine Sales Indicators from 2008 to 2016 .. 55
Pharmaceutical Trade Projection 56
Data : Exports and Imports Indicators from 2008 to 2016 .. 58
Medical Device Industry Projection ......... 59
Data : Medical Devices Sales Indicators from 2008 to 2016 ......... 61
Key Risks To BMI’s Projection Scenario 62

Competition Overview ......... 63
Key Pharmaceuticals And Healthcare Market Developments .... 63
Company Profiles ......... 64
Local Firms ... 64
Cipla .. 64
Ranbaxy Laboratories ...... 66
Dr Reddy’s Laboratories . 68
Aurobindo Pharmaceutical ........ 70
Multinational Firms . 72
Pfizer . 72
GlaxoSmithKline .... 74
Novartis ....... 76
Sanofi India . 78
Merck and Co . 80
Demographic Outlook .. 82
Data : India's Population By Age Group, 1990-2020 ('000) ........ 83
Data : India's Population By Age Group, 1990-2020 (% of total) ......... 84
Data : India's Key Population Ratios, 1990-2020 ... 85
Data : India's Rural And Urban Population, 1990-2020 ... 85
Glossary .... 86
BMI Methodology ......... 88
How We Generate Our Pharmaceutical Market Projections ........ 88
Pharmaceuticals Risk/Reward Ratings Methodology......... 89
Ratings Overview ... 89
Data : Pharmaceutical Business Environment Indicators . 90
Weighting ..... 91
Data : Weighting Of Components ........ 91
Sources ........ 91

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