PHARMACEUTICALS Indian Drugs & Pharmaceuticals sector has received cumulative FDI worth US$ 16.39 billion

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  • Table of Contents

    Executive Summary……………….….…….3

    Advantage India…………………..….…......4

    Market Overview …………….……….…….6

    Recent trends and Strategies……...…..…14

    Growth Drivers……………………..............18


    Useful Information……….......………….….30

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    Source: 1 FICCI - Trends & Opportunities for Indian Pharma 2018, Pharmexcil, Assocham and RNCOS

     Indian pharmaceutical industry supplies over 50 per cent of global demand for various vaccines, 40 per cent of generic demand in the US and 25 per cent of all medicine in UK1.

    Leading pharma producer

     Indian pharmaceutical sector is expected to grow at a CAGR of 22.4 per cent in the near future and medical device market expected to grow US$ 25 billion by 2025. India is the second largest contributor of global biotech and pharmaceutical workforce. The pharmaceutical sector was valued at US$ 33 billion in 2017.

    Among fastest growing industries

     India accounts for 20 per cent of global exports in generics. India’s pharmaceutical export stood at US$ 20.70 billion in FY20.

    One of the highest exports

     Indian healthcare sector, one of the fastest growing sectors, is expected to cross US$ 372 billion by 2022. Rapidly growing healthcare sector

     By FY25, India’s biotech industry is estimated to increase to US$ 100 billion. Robust growth in Biotech industry

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     Low cost of production and R&D boosts efficiency of Indian pharma companies, leading to competitive exports. Indian pharma export reached US$ 20.70 billion in FY20.

     India’s cost of production is approximately 33 per cent lower than that of the US.

     India’s ability to manufacture high quality, low priced medicines, presents a huge business opportunity for the domestic industry.

     Economic prosperity to improve drug affordability.

     Increasing penetration of health insurance to drive expenditure on medicine.

     With increasing penetration of pharmacies, especially in rural India, OTC drugs will be readily available

     Increasing private sector investments in R&D and acquisitions are driving the sector’s growth.

     Between 2008-19, the S&P BSE Healthcare Index has grown at 16.72 per cent.

     Pharma Vision 2020’ aimed at making India a global leader in end-to-end drug manufacturing.


    Source: PwC, McKinsey, Pharmaceuticals Exports Promotion Council of India Note: 2020 revenue forecasts are estimates of McKinsey, API - Active Pharmaceutical Ingredients, F – Forecast, OTC - Over-The-Counter

     Under Budget 2020-21, allocation to the Ministry of Health and Family Welfare is Rs 65,012 crore (US$ 9.30 billion)

     In this sector, 100 per cent FDI is allowed under automatic route.

  • Pharmaceuticals


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    Source: Dun and Bradstreet

    Active Pharmaceutical Ingredients/ Bulk drugs Formulations

    Branded Generics Branded Generics

     Cardiovascular

     Anti-Diabetes

     Gastro-Intestinal

     Neurological

     Anti-infectives

     Respiratory

     Pain

     Gynecology

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    Source: TechSci Research Notes: KAM - Key Account Management, CSO - Contract Sales Organisation

     Indian Patent Act passed in 1970  Several domestic companies start

    operations  Development of production

    infrastructure  Export initiatives taken

     Increased patent filings by pharma players  Likely adoption of newer sales models such

    as channel management, KAM and CSO  The National Pharmaceutical Pricing Policy,

    2012 (NPPP-2012)

     In Union Budget, 2016, FDI increased to 74 per cent in existing pharmaceutical companies and 100 per cent for new projects

     The Government of India unveiled 'Pharma Vision 2020' aimed at making India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments.

     Liberalised market  Indian companies increasingly launch

    operations in foreign countries  India a major destination for generic drug

    manufacturing  Approval of Patents (Amendment) Act 2005,

    which led to adoption of product patents in India

     2013: New Drug Pricing Control Order issued by Directorate of Food and Drugs this will reduce the prices of drugs by 80 per cent  2014: 100 per cent FDI allowed in medical device industry. The investment will be routed through

    automatic route  Leading Indian pharma companies are raising funds aggressively to fund acquisition in domestic as well as international market to increase their product portfolios  2015: India has 10,500 manufacturing units and over 3,000 pharma companies  National Health Policy Draft 2015 to increase expenditure in health care sector  Patent Act Amendment 2015, it includes amendments in Patent Act 2002

    1990-2010 2010- 20152010 2016onwards1970-90

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    Important Segments in Indian Pharmaceutical Sector

    Active Pharmaceutical Ingredients (APIs)

     Domestic API consumption is expected to reach US$ 18.8 billion by FY221.

     In April 2019, a high-level task force was constituted to create a roadmap for increasing domestic production of APIs. Currently India imports over 60 per cent of its APIs from other countries.

    Contract Research and Manufacturing Services (CRAMS)

     Fragmented market with more than 1,000 players

     CRAMS industry has posted 48 per cent CAGR between FY15-18 and expected to witness a strong growth over 25 per cent over 2018-21.


     The Government plans to allocate US$ 70 million for local players to develop Biosimilar.

     The domestic market is expected to reach US$ 40 billion by 2030.

     As on August 2019, the moving annual turnover (MAT) for biosimilar molecules sold in the domestic market stood at Rs 1,498 crore (US$ 214.31 million).


     Largest exporter of formulations in terms of volume, with 14 per cent market share and 12th in terms of export value.

     Double-digit growth is expected over the next five years

    Pharmaceutical industry

    Notes: OTC - Over The Counter,* including biologicals Source: 1 RNCOS, BMI, Datamonitor, Kemwell Biopharma, Chemical Pharmaceutical Generic Association, ICRA Report estimates,, DGCI&S

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    16.41 17.87 18.12








    2016 2017 2018 2019

    Source: Department of Pharmaceuticals, PwC, McKinsey, AIOCD AWACS, , IQVIA, CII

     India’s domestic pharmaceutical market turnover reached Rs 1.4 lakh crore (US$ 20.03 billion) in 2019, growing 9.8 per cent year-on-year (in Rs) from Rs 129,015 crore (US$ 18.12 billion) in 2018.

     Medicine spending in India is projected to grow 9-12 per cent over the next five years, leading India to become one of the top 10 countries in terms of medicine spending.

     India’s cost of production is significantly lower than that of the US and almost half of that of Europe. It gives a competitive edge to India over others.

     The Ayurveda sector in India reached US$ 4.4 billion by 2018 end and grow at 16 per cent CAGR till 2025.

     In May 2020, the Indian pharmaceutical sales grew 9 per cent y-o-y to Rs 10,342 crore (US$ 1.47 billion).

    Visakhapatnam port traffic (million tonnes)Annual Turnover of Indian Pharmaceutical Market (US$ billion) Visakhapatnam port traffic (million tonnes)Quarterly Growth in Indian Pharma Market (%)

    8.9 7.4


    7.8 9.2 9.3 9.7 9.5

    7.9 6.6

    11.5 9.5

    0.0 2.0 4.0 6.0 8.0

    10.0 12.0 14.0

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    Source: FCCI Indian Pharma Summit, 1KPMG US-India Dynamic June 2018, 2AIOCD

     1With 70 per cent of market share (in terms of revenues), generic drugs form the largest segment of the Indian pharmaceutical sector. Over the Counter (OTC) medicines and patented drugs constitute 21 per cent and 9 per cent, respectively

     The share of generic drugs is expected to continue increasing; domestic generic drug market is expected to reach US$ 27.9 billion in 2020

     Due to their competence in generic drugs, growth in this market offers a great opportunity for Indian firms

     Based on moving annual turnover, Anti-Infectives (13.6%), Cardiac (12.4%), Gastro Intestinals (11.5%) had the biggest market share in the Indian