Marksans Pharma

Home

Career

	Industry Info

Global Pharmaceuticals Market

Size of the global pharmaceutical market was US$ 602 bn. The market has grown at a CAGR of nearly 11% during 1998-2005.

The pharmaceutical markets worldwide can be classified as Regulated, Semi Regulated and Non Regulated markets.

	The regulated markets constitute 88% of the global pharmaceutical market.
	The semi and non regulated markets of Asia, Africa, Australia and Latin America have been growing at a rapid pace (registering double digit growth in 2005) highlighting the tremendous market potential of these regions.

Global Sales 2005 : US$ 602 billion

Leading therapeutic segments in the Global Pharmaceutical Market

	Cholesterol and Triglyceride reducers (i.e. Statins) has consistently been one of the top selling therapeutic segments followed by cytostatics (a class of drugs used for treating cancer through chemotherapy).
	The top 10 therapeutic segments accounted for nearly 33% of the total global audited pharmaceutical sales during 2005.

Audited World Therapy Classes	2005 sales (US $ bn)	% of Global Audited Sales	% Growth Y-0-Y (Const. $)
Cholesterol & Trigllyceride Reducers	32.4	5.8	6.8
Cytostatics	28.5	5.1	18.6
Antiulcerants	26.7	4.8	3.8
Antidepressants & Mood Stabilizers	19.8	3.5	3.9
Antipsychotics	16.2	2.9	10.7
Angiotensin-II Inhibitors	14.2	2.5	18.1
Erythropoietin Products	12.3	2.2	6.3
Calcium Antagonists Plain	11.9	2.1	2.2
Anti-Epileptics	11.6	2.1	0.9
Oral Antidiabetics	10.7	1.9	6.9
Total Leading Therapy Classes	184.3	32.9	7.1

The top 10 Pharma companies are facing prospects of slowdown in sales as a large number of blockbuster drugs that they possess are going off patent.

According to McKinsey & Company report (“India Pharma 2015), the following trends are expected to influence the growth of the Indian pharmaceuticals market over the next decade: doubling of disposable incomes and the number of middle-class households, expansion of medical infrastructure, greater penetration of health insurance, rising prevalence of chronic diseases, adoption of product patents, and aggressive market penetration driven by the relatively smaller companies.

Top 14 Pharmaceuticals Markets, 2005		Top 14 Pharmaceuticals Markets, 2015
US $ billion		US $ billion

Indian Pharmaceutical Industry

India accounts for less than two per cent of the world market for pharmaceuticals, with an estimated market value of US$10.4 billion in 2007 at consumer prices, or around US$9 per capita.

	Espicom's market projections put the market at US$15.6 billion by 2012 by assuming a modest but sustainable market growth of around 8.4% per year.
	However, McKinsey has predicted that just the Indian domestic market alone is expected to grow from US$6.3 billion in 2005 to about US$20 billion by 2015.

Business Strategies followed by Indian Pharmaceutical Companies

Domestic Market

	Nearly 80 per cent of the Indian retail market is made up of branded generics and the remainder is made up by pure generics and OTC products.
	There have been a number of regulatory developments since 2005 including the implementation of VAT, a shift in excise duty levy to MRP based levy and the enactment of the product patent regime.
	The number of cases of vaccine preventable diseases has also been greatly reduced while the prevalence of lifestyle diseases has been increasing.
	The Indian pharmaceutical market is ranked 14th in the world in terms of volume.
	According to McKinsey, the market size of US$6.3 billion in 2005 is expected to grow to about US$20 billion by 2015 (CAGR of 12.3%).

Retail Pharmaceuticals market in india*

US $ billion

Domestic Formulation Market

	Key therapeutic segments like pain/ analgesics and anti-Infectives witnessed strong growth due to the rise of dengue and chikungunya. Other fast growing segments like anti-diabetic, gastro, neuro/ CNS and respiratory segments also performed well due to the rising incidence of lifestyle diseases.
	The rural markets grew by over 40 percent during the calendar year 2006. The higher growth in acute therapy segments – pain/ analgesics and Anti-Infectives can be attributed to the fact that epidemics (dengue & chikungunya) were more prominent in rural areas.

Prevalence rates of key chronic diseases in india

Percent of population

Source: NCMH background papers, 2005; Central Bureau of Health Intelligence; WHO; Decision Resources; McKinsey analysis

Domestic Formulations - Performance by Therapeytic Segments

Note: The size of the bubble depicts the sales of the therapeutic segment in Rs. Billion

Top Drug Classes in the Domestic Market

	The Anti-Infective segment accounts for ~ 18% of the total formulations market. The key drug classes among anti-Infectives are cephalosporins, penicillins and quinolones. The cephalosporin segment alone accounts for 41% of the total anti-Infectives market and is the highest growing category. The leading players in this segment face stiff price competition from mid sized players.
	The respiratory segment contributes ~ 9% to the total formulations market. Cipla is the leading player in this category and controlled ~ 49% in 2006. Cough preparations grew by 22% in 2005-06.
	The fastest growing segment in the Gastro Intestinal category are the anti-peptic ulcerants (grew by ~ 24% in 2005-06). The prevalence of ulcers in India is very high – estimated at about 4 – 10 per 1000 people.
	Oral anti-diabetic has been one of India 's highest growing drug classes in the last 5 years. It continues to show high potential with the number of people with diabetes expected to touch ~ 57 million by 2025 according to WHO estimates.
	The therapies for cardiovascular ailments involve primarily the control of blood pressure and cholesterol. Major drug classes for controlling blood pressure (anti-hypertensives) are diuretics, calcium antagonists, beta blocking and ACE inhibitors.
	Anti-depressants accounted for 17% of the total revenues of the CNS segment in 2005-06. The potential market for anti-depressants can be gauged from the fact that one in every 15 adult Indians suffer from depressive illnesses and at least 10% of the population suffering from depression requires professional and medical help according to a study by National Institute of Mental Health and Neuro Sciences (NIMHANS).

Indian Pharmaceutical Industry

Generic Exports

	The global generics market is expected to continue growing rapidly due to the underlying demand drivers like an aging global population, growing healthcare expenditure and low generic penetration across large geographical areas.
	Currently the Indian industry is estimated to account for 22% of the world generics market which is expected to reach 30% according to the forecasts of Assocham.
	USA , the largest generics market globally, is also the single largest export market for Indian generics. The Japanese market is poised to become an important destination for many global generic players with the introduction of generic substitution in 2006. Low production costs give India an edge over other generics-producing nations, especially China and Israel .

CRAMS

	Rising pricing pressure on global revenues and falling trend in R&D productivity is making it imperative for global pharma players to increase outsourcing to sustain profitability.
	Custom manufacturing operations in India or China offer unparalleled cost advantages and increasing pricing pressures is forcing innovators to minimize manufacturing costs and shift operations to India and China .
	Indian custom manufacturing players have been aggressively acquiring custom development companies in the EU in order to gain access to a wide gamut of valuable client relationships, which would have been difficult to obtain otherwise.
	India is also an apt destination for outsourcing of research services due to its large population with relative underexposure to drugs, significant cost advantage and the availability of well qualified investigators.

Discovery R&D

Leading Indian companies have started to look beyond generics and are investing in discovery R&D (NCE/ NDDS research) for sustainable long term growth. The discovery R&D pipeline of Indian pharma players has been seeing a steady build up over the years.

Company	Overview of discovery R&D programme
Dr Reddy's Labs	2 NCEs in Phase II and another 4 NCEs in Phase I along with a significant number of pre-clinical candidates. Also partnering with innovative companies on specialty drugs; has a very strong biogenerics programme
Sun Pharma	One NCE in Phase II trials in USA ; Also focused on 3 other NCE projects and 4 very promising NDDS platforms
Ranbaxy	Has out-licensed a novel statin to PPD Has 1 Malaria NCE in Phase II
Biocon	Conducting clinical trials on Oral Insulin and Monoclonal Antibody for inflammation Has launched another Monoclonal Antibody for head and neck cancer
NPIL	Has 1 oncology NCE in Phase II and plans to have 7-8 NCEs in clinical trials over the next few quarters
Lupin	Conducting phase II trials on the anti-psoriasis NCE
Glenmark	Has out-licensed 2 of its NCEs to global pharma companies