Report from India

The Asian nation is strategizing to take the lead over its regional competitors in pharmaceutical exports.
Feb 02, 2012
By A. Nair
Volume 36, Issue 2

With the $12-billion valued Indian pharmaceutical industry expected to grow at an compound annual growth rate (CAGR) of 16%, the Indian government plans to capitalize on the growth potential in an effort to beat the competition from its Asian counterparts in the generic-drug and API manufacturing market.

Plans to increase pharmaceutical exports

"The idea is to double pharmaceutical exports to $25 billion by 2013–2014,'' says India's Health Minister Ghulam Nabi Azad. The Indian pharmaceutical sector has already emerged as one of the major contributors to the country's overall exports, with earnings rising from a negligible amount in the early 1990s to a value near the $12-billion mark. With generic-drug exports to the United States and Europe likely to increase, Azad says the time has come for India to be recognized as a global pharmaceutical manufacturing leader.

India's Department of Commerce has advised its Pharmaceuticals Export Promotion Council (Pharmexcil) to undertake a Brand Pharma India campaign to improve the sector's global positioning. The campaign will raise awareness of the Indian pharmaceutical-sector success story and acquaint international audiences with India's growing expertise in generic-drug manufacturing. A component of the campaign will focus on improving the global perception of quality standards in India; much attention has been paid to counterfeit drugs in the region of late and the country is working to put an end to such practice.

"We need to establish India firmly as the first choice partner for the entire global pharma fraternity and with regards to the entire spectrum of pharma services. If aggressive growth drivers kick in, the domestic market is primed to reach $74 billion at a CAGR of 20% within no time,'' says P.V. Appaji, executive director of Pharmexcil.

In 2010, India exported $10.3 billion worth of pharmaceutical products, registering 17.5% growth since 2009. By March 2012, exports are likely to record a growth of 19%, says Appaji. India's largest export destination is still the US, followed by the United Kingdom, Germany, South Africa, and Russia. Segment-wise, generic drugs account for 58% of total exports, APIs account for 40%, and traditional medicines account for the remaining 2%.

"We need to aggressively promote export growth of high value products that have a strong domestic manufacturing base. This will be the lynchpin of our overall export growth strategy,'' says Union Minister of Science and Technology and Earth Sciences Vilasrao Deshmukh. He added that, with help from the government, India could easily take a large share of the API market from Europe.

India is currently at par with Europe in terms of the number of type II drug master file (DMF) applications submitted. In the second quarter of 2011, Europe filed 3150 DMFs and India filed 3084 to their respective authorities. "Moreover, the quarter-on-quarter DMF filing rate of India is slightly higher than Europe. The rate is continuously increasing,'' says Tarun Shah of MP Advisors, a specialized healthcare investment advisory firm based in Vadodara, Gujarat.

Glen Saldanha, chairman of Glenmark Pharmaceuticals based in Mumbai, agrees. "Today, many Indian firms have already established themselves as leading API manufacturers and generic players in the US and other western markets. Indian firms have made their presence felt in developed markets and if we continue to do quality work, then gaining market share in these markets should not be difficult. Government impetus is bound to boost the process.''

Incidentally, Glenmark has transitioned from supplying APIs to semi-regulated markets to servicing the regulated markets. The company claims it has the unique distinction of servicing nearly all the leading generic-drug manufacturers in the US.

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