India is a country with a growing population and its per capita healthcare expenditure has increased at a CAGR of 10.3% from US$ 43.1 in 2008 to US$ 57.9 in 2015, and expected to rise by US$ 88.7 by 2020 (FICCI, 2018). The major drug market drivers are rising incomes, easier access to high-quality healthcare facilities, and greater awareness of personal health and hygiene.
The most common allergic diseases in India comprises of asthma, rhinitis, anaphylaxis, drug, food and insect allergy, eczema and urticaria, and angioedema. Approximately 20% to 30 % of the total Indian population suffers from at least one of these allergic diseases in India (National Family Health Survey, 2017). With respect to the socio-demographic conditions, it has been found out that allergy conditions are more prevalent in urban areas and that also is male dominant (Chandrika, 2016).
The majority of the research on allergy drug development needs to have teams of well-qualified researchers and inventors. This is associated and linked to the R&D expenditure capabilities of the pharmaceutical companies and adopting new-age technologies (Chakma et al., 2014). Increased expenditure on R&D for new technologies and human capital for better research to help develop new drugs and competitive to expand the Indian drug market.
The trend of the Indian drug market
The trend of the growth of the pharmaceutical industry indicates an exponential phase. In this regard, it also reveals that the drug market for allergy is also increasing. However, the expanding drug market comes from motivating and challenging market drivers specific to India (AIOCD, 2018). These motivating and challenging market drivers of the drug market comprises of:
- government policies,
- international policy,
- economic and financial stability,
- public relation,
- research and development expenditure,
- allergy prevalence and,
- research capability and resource availability.
Government policy is one of the most important drug market drivers
The Government of India forms and implicates policies for the development and innovation of the drugs in India. These policies are implemented to help the development of the drug market and also increase the export of drugs. According to an investigative report by the Indian Express, (2017), the main focus of the government while forming policies for regulating the drug market includes:
- standardization process made easy for the manufacturers,
- quality control to avoid duplications of the ingredients and,
- the convergence of the regulatory practices.
The collaboration of all the agencies make the process of drug development faster and also helps in avoiding the resource wastage by the repetition of the research in two places at the same time (WHO, 2017).
International policies also act as a market driver
The policy formation by the international authorities largely impacts the allergy drug manufacturers of India. India is also one of the ten largest generic drug exporters according to a report in 2018. Therefore, the pharmaceutical companies in India need to strictly follow the rules and regulations set by international organizations like:
- USFDA (US food and drug administration),
- World Health Organization (WHO), and
- EMA (European Medicine Agency).
Diligence to these the guidelines of international organizations allows achieving maximum export of allergic drugs with respect to sales volume and finances (CII, 2012).
These policies mainly determine the safety and efficacy of exported drugs. However, the policies turn out a bit challenging for the Indian drug manufacturers while following the regulations, costs of manufacturing, costs of applications, packaging of the drugs, and quality control (Business Today, 2017). However, the advantageous point of international policies includes a larger scope of drug export, increased revenue, and larger geographic market coverage.
Research and development expenditure as a market driver
Another important market driver of the Indian pharmaceutical sector is R&D expenditure by the government and FDIs. Increased government expenditures and FDI increases the capabilities of research and development (R&D) (Ho et al., 2017). Reports indicated that in FY2011-12, 5.8% of total income spent on R&D by Indian pharmaceutical industries, which increased to 9% in the year 2016-17 (Banerji & Suri, 2017). In addition, Banerji & Suri, (2017) also reported that 12.39% of the total patents granted comprise of drugs for human necessities. R&D expenditures by the leading Indian pharmaceutical companies have gone up significantly by 28.8% in 2014-15 and expect to rise by 30-35% in 2020. This increase results in greater revenue generation and improves international exports (Liu et al., 2017). Thus, R&D expenditure acts as one of the most important market drivers for the Indian drug market.
Public relations as a market driver
Public relations are an important aspect of the increase in the market size for the drugs in India. The main causes of allergic reactions in India consist of:
- household environment,
- tobacco smoke,
- genetic factors,
- exposure to polluting fuels, and
- intake of a substance that an individual is allergic to (FDA, 2017).
Therefore an awareness about these factors that leads to increasing the allergic diseases is very necessary. Public relations are also important for educating the people about the treatment options and preventive measures for various types of allergic reactions. Public relation by the pharma industry allows the general public to gain knowledge on the importance of drugs and medications for allergies.
Market drivers: motivation v/s challenges
The economic and financial stability is a significant market driver for the Indian drug market. The more economic support provided to the pharmaceutical industries for the drug production will lead to the efficient control of the allergy prevailing in the country. The healthcare sector in India will grow at a CAGR of 15% and touch US$ 158.2 billion in 2020 from US$ 78.6 billion in 2012 (IBEF, 2014).
The government’s intervention, R&D expenditure and capabilities, economic stability, allergy prevalence, and public relation acts as major market drivers for the allergy drug market. The market drivers that act as a major motivation for the drug market is the disease prevalence and public relations. On the other hand, the research and development, economic stability, and government role mainly act as a challenge for the allergy drug market. In India, very little attention is given to the research and development of new drugs. There is a huge communication gap in the government and private institutes that controls the drug formation.
However, the challenges occur due to a lack of major funds for research and development as well as lack of major allergy drug discovery in India. The least attention is given by pharmaceutical firms for the development of allergy drugs. However, these factors can be turned into motivation by giving more attention to R&D and innovation along with diligence for human necessities.
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- FDA (2017). Food Allergies: What You Need to Know. Retrieved September 15, 2018, from https://www.fda.gov/food/ingredientspackaginglabeling/foodallergens/ucm079311.htm.
- FICCI. (2018). Trends & Opportunities for Indian Pharma. Retrieved from http://ficci.in/spdocument/22944/india-pharma-2018-ficci.pdf.
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- National Family Health Survey (2017). NFHS-4 Fact Sheets For Key Indicators Based On Final Data. Available at: http://rchiips.org/nfhs/.
- The Indian Express. (2017). India to unveil new drug policy. Retrieved September 27, 2018, from https://indianexpress.com/article/india/india-to-unveil-new-drug-policy-officials-4664880/.
- WHO. (2017). Indian policies to promote local production of pharmaceutical products and protect public health CMYK Pantone EC Corporate Blue. Retrieved from http://www.who.int/phi/publications/2081India020517.pdf.
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