The industry has reached a stage where it can differentiate the `winners of today' from the `winners of yesterday'. With increasing interest from global honchos, good times beckon pharma firms.

The Indian pharmaceutical sector has come a long way meeting almost 95% of the country's pharmaceutical needs. The industry is very cost-effective and manufactures drugs for less than half of the US cost and conducts R&D for less than one-eighth of the US cost. The global output of the industry ranks 4th in terms of volume and 13th in terms of value. It has grown at a Compounded Annual Growth Rate (CAGR) of 13% from 2002-2007 and is estimated to grow at a rate of 16% annually over 2007-2011. The total worth of the industry is estimated at $10 bn at present.

The country has emerged as a key Contract Research and Manufacturing Services (CRAMS) hub and is playing a vital role in manufacturing as well as in drug development. Contract manufacturing offers multiple opportunities. Given the increased pressure on profit margins and increasing overheads, India is becoming a favorite R&D hot spot for global pharma companies. It is expected that with 10,000 manufacturing units by the year 2050, India will be among the top 10 nations in drug manufacturing.

The pharma majors emphasizing more on R&D and are moving up the value chain. The industry is witnessing a paradigm shift from being a mere generic drug manufacturing to innovation of new drugs. MNC pharma majors have begun to launch products from their parents' folio, such as Glaxo and Pfizer, which have started contributing to the top line. India occupies 22% space of the world generic drugs market. The generics industry continues to be the mainstay of the industry and is all set to expand its wings as a large number of drugs worth $65 bn have gone off patent in 2007are.

The Analyst Magazine, Indian Pharmaceutical Sector, Research and Development, R&D, Compounded Annual Growth Rate, CAGR, Contract Research and Manufacturing Services, Global Pharma Companies, Generic Drug Manufacturing, Dr. Reddy's Laboratories, New Drug Delivery Systems, NDDS, acquisition strategy, Mergers and Acquisitions, Global Generics Market, Intellectual Property Protection, IPP.