The industry was once tarnished
for making cheap clones of Western medicines and selling them in developing countries. However,
this is no longer the case; seasoned in the basics of medicine making, it is
now playing a significant role in the global drug industry. The strengthening
of patent law and the increasing cost pressures on name-brand drug makers
in the West are fueling the growth tempo of Indian drugs industry. The
industry achieved phenomenal progress over the years and is currently valued at
$21.4 bn. According to the consultancy KPMG, the industry is expected to grow at
a compound annual growth rate (CAGR) of about 18% till 2013-14. The
Indian pharma market has become the third largest in the world in terms of
volume and is ranked 14th in terms of value
at over Rs 1 tn. During 2009-10, Indian pharmaceutical was among the few
sectors that managed revenue growth despite the global economic recession.
Another positive development has been the development of biotechnology
sector in India.
Driven by increasing affordability, the industry is undergoing a
major transformation and is slated to move into the world's top-ten
pharmaceutical market by 2015. Until recently,
global pharmaceutical players have been incredibly proud, and never
outsourced from countries like India. However, analysts predict that everything in
the value chain will move to different parts of the world destinations, which are
cost competitive. India is going to be a major beneficiary because of this. The
pharma outsourcing is no longer confined to preclinical trials but has also moved to
the more sophisticated end of the drug making spectrum, including
research and development (R&D) for the global drug giants and even development
of proprietary medicines for Indian players. The global pharma giants
have shown high interest in India going by sustained economic growth,
healthcare reforms and patent-related regulations.
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