This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
The 20 companies examined in this report had combined sales of more than
US$17.4 billion in their most recently reported fiscal year, which generally concluded on
31st March 2012. Ranbaxy reported revenue of
Rs.99,769 million (
US$2,145 million) for the calendar year ended
31st December 2011, making it the leading company in terms of revenue. Of the companies listed, 18 reported improved sales over 2010/11.
New Guidance on Biosimilar Manufacture
In 2012, new "Guidelines on Similar Biologics" were published. The Guidelines were prepared by the Central Drugs Standard Control Organisation and the Department of Biotechnology, and lay down the regulatory pathway for a biologic claiming to be similar to an already authorised reference biologic. The Guidelines apply to both locally-developed and imported products, although the precise approval process differs in each case. The document notes that a reduction in testing and data requirements at the preclinical and clinical level is likely to be possible for a biosimilar, however, 'it is essential that the testing of the similar biologic be sufficient to ensure that the product meets acceptable levels of safety, efficacy and quality to ensure public health'.
A number of Indian companies are active in the biologics segment of the pharmaceutical market. Leading indigenous biotechnology companies include Biocon and Panacea Biotech, which ranked first and third in terms of revenue in the BioSpectrum-ABLE Biotech Industry Survey 2010. The Serum Institute of
India was in second place. Unsurprisingly, the Indian biotech industry has its sights set on the regulated biosimilars markets of the EU and US. However, no Indian company has yet achieved a biosimilar approval in the EU and the US market remains in its infancy. A more realistic target for most companies, at least for the time being, is the domestic and emerging markets for biosimilars.
Where have all the outbound mergers gone?
Many Indian companies have pursued an aggressive acquisition policy in order to accelerate market growth or acquire manufacturing capacity. Prior to the economic downturn in 2008, this policy could be clearly seen with 10 acquisition/controlling stake deals announced in the year. Pressure on prices and variable performance have firmly put a lid on this activity, Sun Pharma's eventual control of Taro being one of the few deals to go through since. Inward investment has equally been affected as interest in Indian companies has cooled. Matrix – one of the more acquisitive companies – was purchased in 2007 by Mylan. Now rebranded Mylan Laboratories, one of the better known names in
India pharma has now gone.
Focus on...current and future marketsIndia's domestic market: not achieving necessary growth
With a population of over one billion and a growing middle class in excess of 300 million people with disposable income and increasing healthcare expectations, the domestic formulations market has enormous potential for growth. But
India is a country of wide economic divide and while a growing number of people can afford to pay for good quality private healthcare, for the bulk of its vast rural population all but basic healthcare provision will remain out of reach for the foreseeable future. However, domestic pharmaceutical companies are reporting increased penetration in smaller towns and rural areas. Rising household income and improvements in health infrastructure and delivery systems will continue to support long-term growth in the pharmaceutical market. Nevertheless,
India's domestic market will not grow at the required rate to sustain the industry's revenue needs and production capacity and so Indian pharma companies will remain export focused in the medium term.
INTERNATIONAL DEVELOPMENTS US Market: the prize market for Indian companies The
USA remains the largest generic market and the most sought after target for Indian companies involved in the generic business, and market growth has been sustained in recent years by a large number of patent expirations. As the Indian majors have gained experience in the US, they have been able to exploit opportunities provided by Paragraph IV filings and specialty generics with fewer competitors. Over the last decade the number of ANDAs approved increased dramatically. During the three year period between
January 2002 and
December 2004, the FDA approved 72 ANDAs for Indian pharmaceutical companies and their US subsidiaries and the numbers have increased year-on-year, to peak at 132 in 2008. Since then, the number of annual approvals has dropped slightly, to 119 in 2011 and 127 in 2012.
UK: One of Europe's strongest generics markets
Over 80% of prescriptions in the mature UK market are fulfilled generically. The UK has always been a focus for Indian companies with nine companies running 11 manufacturing sites. Between
January 2009 and
January 2010, Indian companies had more than 260 marketing authorisations approved by the UK's Medicines and Healthcare Regulatory Agency (MHRA) for a wide range of products. During this period, Ranbaxy received 55 approvals; Dr Reddy's received 54; Aurobindo received 39; and Lupin received 25.
Europe: wider generic adoption is good news for Indian companies
The UK and
Germany have been promoting generic use as a way of containing healthcare costs for years and a number of Indian companies are active in these markets. Others, such as
Spain, have more recently begun to explore the use of generics to curtail burgeoning drug bills. Government initiatives have been introduced to increase the use of generics and reduce prices as part of wider austerity measures. These generic markets are still relatively small but growing and there are a number of Indian companies currently monitoring them. When will they act and will prevaricating harm their long-term potential?
Russia: an import dependent market which is to the advantage of Indian companiesRussia is an important market for
India's pharmaceutical industry. In 2012, the Russian pharmaceutical market was estimated at
US$26,551 million at retail prices. The market is characterised by strong import growth which roseby a CAGR of 18.7% in US dollar terms over the 2007-11 period. The heavy reliance on imports has been to Indian companies' benefit and
India's pharmaceutical exports to
Russia amounted to
US$534 million in 2011, of whichUS$517 million were retail formulations – this makes Russia India's second most important export market after the
USA. Among the leaders in this trade were Dr Reddy's in gastrointestinal, cardiovascular and anti-infective drugs,while the leading areas for the company with biosimilars are immunology and oncology. Glenmark Russia is among the top 20 pharmaceutical companies in the dermatology segment and one of the fastest growing pharmaceuticalcompanies in
The generics market in
South Africa has grown markedly in recent years as the government has continued to promote the low-cost sector as a means of improving access to medicines for the country's vast poor population.
South Africa amounted to
US$310 million in 2011, of which
US$267 million were retail formulations. To illustrate Indian company success, Lupin stated in its 2012 annual report that it was one of the fastest growing of
the top ten companies in
South Africa, recording growth of 40% in revenues to
Rs.2,554 million (
US$55 million) from its subsidiary, Pharma Dynamics. The company ranked fifth among generic pharmaceutical companies in
India as a research base: balancing need and research investmentIndia's acknowledged strengths make it an ideal regional base, particularly for R&D and for commercialisation in select markets in which
India already has a significant presence. With its vast population, comparatively low cost, fast turnaround and expertise in statistical analysis,
India is also an attractive base for Phase III clinical trials.
Several multinationals are already using or plan to use
India as a base for clinical research, particularly for specific diseases with a significant local patient base, such as tuberculosis. Companies such as GSK and Eli Lilly have been collaborating with domestic companies for R&D, while others have been utilising Indian contract research organisations. In the future, it is likely that an increasing number of companies will set up research centres in
India and use the country as a hub for multi-centric global trials. Others will take advantage of the services offered by
India's emerging CROs.
The Foreign Direct Investment (FDI) policy, introduced in 2001, allows 100% FDI in the pharmaceutical industry. By 2011, however, the move aimed at encouraging foreign investment had become a cause for concern and the FDI policy was placed under review.