The changing business paradigms ushered in by globalization and liberalization over the last decade have prompted the Indian pharmaceutical companies to revisit their strategies for sustenance and future growth. While one cannot predict precisely, the speed or implications of impending transition, it is certain that the Indian pharmaceutical landscape is changing. Indian companies are trying to stitch together survival strategies, by setting up subsidiaries or by forming alliances with other generic US companies, getting regulatory approvals for their manufacturing plants and are increasing their presence in the regulated markets like the US and Europe.

This is the Cambrian era in the evolutionary history of $5.5bn domestic pharma industry. The Indian outfits with global ambitions are just starting to grow up. Expanding overseas generic market, rapid change in technology, an increasing domestic generics market, and a restrictive patent regime are challenging many of the well-established strategies in this field. Domestic pharma companies, even though they are following proven business models, are facing several new imperatives that are forcing them to rework their business strategies for growth and sustenance.

The sheer breadth and scope of the changes that are underway is mind-boggling. The industry is expected to touch US $25 bn by 2010 and $75 bn by 2020. A few big forces will power this transition. First, huge generic opportunity is pushing Indian pharmaceutical companies to shift their focus to western countries for sustained profitability. The generic market in most of these countries is poised for a quantum jump in the coming years with the regulatory authorities in EU and UK contemplating new measurers aimed at faster approvals for generics. Second, the overshooting drug development and lowering R&D productivity is shifting manufacturing bases of global pharma companies to countries like India that can produce quality products at low costs. Hence, huge opportunities are opening up for domestic companies that specialize in a particular aspect of the drug development process to contract out their specializations on a regular basis to global pharmaceutical companies.

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