India's pharmaceutical sector - A Complete Study

India's pharmaceutical sector is gaining its position as a global leader. The pharma market in India is expected to touch US$ 74 billion in sales by 2020 from the current US$ 11 billion, according to a PricewaterhouseCoopers (PwC) report.

Growth of Indian pharma companies will be driven by the fastest growing molecules in the diabetes, skincare and eye care segment, as per a report by research firm, Credit Suisse. The market share of a drug company is directly related to the number of fast growing molecules in the company's pipeline, the report highlighted.

The Indian pharmaceutical market is poised to grow to US$ 55 billion by 2020 from the 2009 levels of US$ 12.6 billion, as per a McKinsey & Company report titled "India Pharma 2020: Propelling access and acceptance realising true potential". The industry further holds potential to reach US$ 70 billion, at a compound annual growth rate (CAGR) of 17 per cent.

Sector Structure/ Market Size

The Indian pharmaceutical market is expected to grow at a CAGR of 15.3 per cent during 2011-12 to 2013-14, according to a Barclays Capital Equity Research report on India Healthcare & Pharmaceuticals.

The outlook on the Indian pharmaceutical industry remains favourable, according to a report by ICRA and Moody's. Domestic formulation market stood at Rs 58,300 crore (US$ 10.54 billion) and has been ranked third in terms of volume and tenth in terms of value, globally. From 2011, trends are changing, MNCs are focusing on chronics, branded generics and launching patented products, besides expanding their field force and focusing on tier-II as well as tier-IV towns. Domestic market grew at 15 per cent, while pharma multinational companies (MNCs) revenue grew at 18.7 per cent.

Exports

India's exports of drugs, pharmaceutical and fine chemicals grew by 27 per cent to Rs 60,000 crore (US$ 10.85 billion) for the year ended March 2012, according to data compiled by Pharmaceutical Exports Council of India (Pharmexcil). Moreover, the size of the Indian formulations market, which currently stands at around Rs 62,000 crore (US$ 11.21 billion), is growing at 15-20 per cent annually.

"India-Brazil health and pharmaceutical collaboration holds the potential of being key contributor for assuring affordable healthcare for our people," as per Mr Anand Sharma, Union Minister for Commerce, Industry and Textiles. Mr Sharma further called for better understanding between the pharmaceutical regulatory regimes in the two countries.

The Export-Import (Exim) Bank of India has agreed to provide loans to fund the setting up of common infrastructure facilities at Sriperumbudur, Tamil Nadu, which will help boost exports of medicine products from India.

Growth

India will see the largest number of merger and acquisitions (M&As) in the pharmaceutical and healthcare sector, according to consulting firm Grant Thornton. A survey conducted across 100 companies has revealed that one-fourth of the respondents were optimistic about acquisitions in the pharmaceutical sector.

The cumulative drugs and pharmaceuticals sector attracted foreign direct investments (FDI) worth US$ 9,596 million between April 2000 to May 2012, according to the latest data published by Department of Industrial Policy and Promotion (DIPP).

Generics

India tops the world in exporting generic medicines worth US$ 11 billion. Currently, the Indian pharmaceutical industry is one of the world's largest and most developed, according to Mr Srikant Kumar Jena, Union Minister of State for Chemicals and Fertilisers.

Generics will continue to dominate the market while patent-protected products are likely to constitute 10 per cent of the pie till 2015, according to McKinsey report 'India Pharma 2015 - Unlocking the potential of Indian Pharmaceuticals market'. Hyderabad-based generic drug maker, Natco Pharma Ltd has launched a cheaper generic version of Bristol Myers Squibb's blood cancer drug Sprycel at a fraction of the innovator pricing. Natco launched Dasatinib at a pricing of Rs 9,000 (US$ 162.75) for a month's supply against Bristol pricing of around Rs 160,000 (US$ 2,893.31).

Multinational drug companies are showing a healthy growth in the Indian market setting a new trend. Out of 25 top medicine brands by sales last year, 13 were global drug major such as Pfizer, GSK and Novartis. Brand-building exercise is fast becoming more evident in a predominantly generic Indian medicine market, as per a market research entity AIOCD AWACS' report.

Diagnostics Outsourcing/ Clinical Trials

"The Indian healthcare devices market is part of our focus on emerging markets. The Hyderabad centre will enable us to improve product time to market and create valued-innovation," highlighted Robert Frechette, Vice-President (Engineering Services), Covidien. The value of the Indian medical devices market is estimated at US$ 4 billion, and is clocking a growth rate of 15 per cent annually, he added.

The Indian pharmaceutical companies can be of immense value in providing affordable healthcare, especially in countries such as Japan. India also has a vast pool of trained pharmaceutical scientists, doctors and researchers, which opens up avenues for joint collaborative research for new drug discoveries along with joint intellectual property rights (IPRs).

The clinical pharmacology unit of GVK Biosciences at Ahmedabad has cleared an audit conducted by US Food and Drug Administration (FDA). The facility carries out important scientific studies related to drug development for pharma customers (drug companies, research institutes, etc).

Investments

• Suven Life Sciences Ltd has got four product patents one each from Australia, Canada, Korea and New Zealand for their new drug molecules (New Chemical Entities). The new drug molecules are used for disorder treatment related to Neuro-degenerative diseases
• Aurobindo Pharma has received USFDA approval to manufacture and market montelukast sodium tablets and montelukast sodium chewable tablets for treatment of asthma in the US market
• US-based drug development player, CritiTech Inc has joined hands with Hyderabad-based formulation development services company, Finoso Pharma Pvt Ltd to set up a 50:50 joint venture (JV) - Finotech Pharma. The JV company is being set up with an initial investment of US$ 1 million
• Venus Remedies has secured its third US patent for its novel antibiotic product Potentox. The new drug is an antibiotic adjuvant entity and is considered effective in case of hospital acquired pneumonia and febrile neutropenia infections
• Israel's Teva Pharmaceutical Industries and Procter & Gamble (P&G) plan to enter India through a joint venture (JV) by setting up their first manufacturing facility at Sanand, Gujarat, with an initial investment of Rs 250 crore (US$ 45.21 million)
• Onco Therapies, a wholly owned subsidiary of Strides Arcolab, has received two USFDA approvals for 'Fluorouracil Injection USP'. Fluorouracil is a chemotherapy drug which interferes with cells making DNA and RNA, and stops the growth of cancer cells
• Mankind Pharma Ltd is set for a major turnaround over the next two to three years. "We are planning to launch 15-16 products in the chronic therapy segment this financial year", as per R C Juneja, CEO and Chairman, Mankind Pharma
• Venus Remedies Ltd has launched a nanotechnology based 'ready-to-use' single vial Docetaxel in the domestic market. The medicine will be an important tool in the cancer drug industry

Government Initiatives

The Union Budget for 2012-13 was announced by Mr Pranab Mukherjee, the Union Finance Minister. Highlights of Union Budget 2012-13:

• It is proposed to extend concessional basic customs duty of 5 per cent with full exemption from excise duty/CVD to six specified life-saving drugs/ vaccines. These are used for the treatment or prevention of ailments such as HIV-AIDS, renal cancer, etc
• Probiotics are a cost-effective means of combating bacterial infections. It is proposed to reduce the basic customs duty on this item from 10 per cent to 5 per cent
• Basic customs duty and excise duty reduced on Soya products to address protein deficiency among women and children. Basic customs duty and excise duty reduced on Iodine

Furthermore, a 'Pharma Vision 2020' has been prepared by the Department of Pharmaceuticals, for making India one of the leading destinations for end-to-end drug discovery and innovation and for that purpose, the department will provide requisite support by way of world class infrastructure, internationally competitive scientific manpower for pharma research and development (R&D), venture fund for research in the public and private domain and such other measures.

Road Ahead

On the back of increasing middle-class population base, improvements in medical infrastructure and the establishment of IP rights, the Indian pharma industry is estimated to grow manifolds.

"India is a unique market, always very intriguing. India presents challenging paradigms and gives tremendous opportunities. I see the healthcare sector as one of the biggest business opportunities," as per Terri Bresenham, President and CEO, GE Healthcare India, and MD, Wipro GE Healthcare. India is the first country to have a large number of multinational healthcare providers, added Bresenham.

Pharmaceutical companies such as Cipla, Ranbaxy, Dr Reddy's Labs and Lupin might soon be part of the government's ambitious 'Jan Aushadhi' project. In an attempt to commercialise the project, the government is likely to rope in the private sector to bulk-procure generic drugs from them. There are 117 Jan Aushadhi stores across the country and the plan is to expand to at least 600 in the next two years and 3,000 by 2016.

Exchange rate used INR 1= US$ 0.01808 as on August, 2012

References: Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP), Press Information Bureau (PIB), Media Reports, McKinsey Report, Pharmaceuticals Export Promotion Council

5 Golden Rules

5 Golden Rules for Your Business Email !

"One shit deal…" This phrase got one of the largest investment companies in the world in a messy soup during the Global Financial Crisis. One of their employees wrote this to another in an email, which was used against them in the court of law. Well, that’s that…

Read on to know how you can avoid such blunders and a few rules that you should follow for your business email.

Communicate, Don’t Express

If you are writing an email to a client, customer or an employee, make sure that you communicate in that email. There is absolutely no reason why you should be expressive and generate a certain tone in the email.

For example, if you want to praise an employee for a job well done, you can write "You have done well this month. We appreciate your efforts" instead of "Wow! You’ve done a splendid job. How I wish you worked like this every month!" Use this rule for your business emails because being expressive in an email may feel warm, but that’s not why we’re here to do business, are we?

Some of you may disagree to what I just said, however, it is a habit and this emotive or overtly expressive communication may also lead you to write something exactly like "One shit deal…"

Keep it to the Point

"Hi John. How are you? Did you have a good vacation in Bangkok? I hope you visited the places I recommended and had lots of fun, if you know what I mean. You must show me pictures the next time we meet. Oh wait, don’t bother. I’ll check them on your facebook. Anyways, getting to the point, I wanted to speak to your regarding a recent business deal with one of your clients…."

If your emails read like this, stop! This rule for your business emails is critical because remember that your emails can be printed in any office around the world. Do you really want your clients or customers to read about your suggestions to John regarding his Bangkok trip?

Business emails should be to the point and address the issues they are meant for. Nothing more, nothing less.

Don’t write anything that can cause a legal burden

It is easy to get carried away in the heat of the moment and write something on the lines of "…We’ve done all we could. It is unfortunate you don’t like our product. But we can’t help you anymore"to an irate customer. But have you thought of the legal repercussions?

You could be sued for negligence or lack of customer support (although in India, the “suing” concept is still not there).

This rule for business emails is all about keeping the relevant legal framework in mind before hitting the send button. If you didn’t know already, your emails can be used against or for you in the court of law as written documentation proof.

So choose your words carefully when you write that next email from your business account.

Avoid personal forwards

Business email accounts are meant for professional emails only. No matter how funny or witty your forwards are, restrict them to your personal email id.

Believe us, no one wants to read about that funny husband-wife joke when they’re stressing about a critical business deal.

Always double check the recipients

Your emails could damage the goodwill or privacy of your business if it gets sent to the wrong recipient. If you think this advice regarding rules that you should follow for your business emails is meant for amateurs only, think again.

You don’t want internal communication floating around to your customer, or a conversation with your manager to reach your boss, do you?

In addition to the above mentioned rules to follow for business email, make sure you don’t use “sms lingo” in business emails or text messages. A ‘u’ instead of a ‘you’ could potentially break your business deal with a client. And yes, last but not the least – always make sure your spell-check is on – Spelling Mistakes in Business Email is a crime!

TATA: Into School education space

Tatas may venture into school education space

The Tata group is planning a major entry into the Indian educational space, sources said. E-learning-focused group company Tata Interactive Systems (TIS) may soon unveil a strategy for setting up preschools across the country. Though the initial plan is to set up preschools, the long-term vision of the group is to have K12 schools (catering to students from standards one to twelve) in Tier 1 cities.

It is learnt that TIS may unveil its mega plan within the next two weeks. The group may invest close to Rs 1,000 crore in what will be its first major commercial venture in the education space. Most Tata companies look at education from a corporate social responsibility point of view.

Education in India is mainly provided by the public sector, with control and funding coming from three levels — Central, State and local. It is only recently that corporate biggies such as Zee, the Yash Birla Group and HDFC have publicly evinced interest in this burgeoning space. Effectively, the unlisted TIS is taking the cue from rival e-learning firms such as Educomp, Everonn and Core Projects & Technologies which have charted a similar diversification strategy.

TIS' solutions have been deployed at more than 60 ‘Fortune 500' companies, leading educational institutions and government departments across India, the Middle East, the US and other countries, says the company Web site.

Pie, large enough?

Industry sources feel that the Tata's move will help organise India's fragmented education market. But, then, is the pie large enough for so many players?

In India, 90 million children go to school every year and there are 7.5 million new enrolments annually. Given that each preschool can accommodate maximum 200 students, around 30,000 preschools are required to meet the demand.

According to estimates, the Government invests three per cent of its GDP on education while consumers spend more than $40 billion on private educational institutions and services.

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