An overview of the pharmaceutical industry of India
The pharmaceutical industry of India consists of the total value of pharmaceutical formulations sold in India. It is one of the major contributors in the healthcare industry. Indian pharmaceutical also plays a major role in the contribution of drugs globally. It provides many vaccines, generic drugs and other forms of treatment methods on global demand. In this article, the market size of the Indian pharmaceutical industry is compared in the global perspective.
India in the global pharmaceutical market
The Revenue generated by the Pharmaceutical companies all over the world has been increasing. In 2008 the global revenue from the pharmaceutical industry was 799 USD billion which has now escalated to 1105 USD billion in the year 2016. In the year 2008, the Indian pharmaceutical market contributes 1.21% of the global revenue generated by pharmaceutical companies all over the world. The Indian pharmaceutical companies are contributing 2.5% of the total revenue to the pharmaceutical global revenue in the year 2016. The global contribution of Indian pharmaceutical companies has almost doubled in eight years.
In India, the export of drugs is one of the major sources of revenue generation for the pharma industry. The Indian pharma industries are generating almost 55% of their total revenue from exports. A fair share of drugs is being exported to the various parts of the world like Bangladesh, Mexico, Poland, Colombia, U.S., and Argentina. The revenue generated by the Indian pharmaceutical industry as well as the export is following an increasing trend. The export revenue of Indian pharmaceutical increased by four times in eight years i.e. from 4.1 USD billions in the year 2008 to 16.49 USD billion in the year 2017. The total revenue has also increased from 9.7 USD billion in 2008 to 29 USD billion in the year 2017 (Trading Economics, 2018).
Pharmaceutical industry of India
The pharmaceutical industry is mainly divided into two segments i.e. API (Active Pharmaceutical Ingredients), Formulations and other pharmaceuticals. The export percentage of formulation drugs has increased over the past few years. Formulation drugs export percentage has increased from 55% in the year 2008 to 75.42 % in the year 2017. On the other hand, the API drugs export percent has declined from 44% in 2008 to 20 % in 2017. Formulation drugs account for almost 65%% of total pharmaceutical export from India while API contributes to 33% of the total pharmaceutical export from India (AIOCD, 2018).
The pharmaceutical industry is facing lower growth and profitability but even in these conditions, the pharmaceuticals industry have maintained an average growth rate of 6-7% for over 5 years. This is due to the fact that the demand for formulations drugs is increasing in the global market and India supplies 20% of the formulation drugs globally.
The pharmaceutical market size of India is expected to increase at 9-12% growth rate (FICCI, 2018). This will be a result of rapid urbanization, increase in consumer expenditure on the basic medicines and health insurance. This is also due to the fact that the currently available pharmaceutical companies are focusing on designing their portfolio on the basis of the chronic diseases that are highly prevalent in the population of the country i.e. cardiovascular disease, diabetes, depression, and cancer. Another factor that will lead to an increase in the growth rates of the pharmaceutical market will be the increasing focus on the production of generic drugs due to their high demand all over the world. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.
- AIOCD. (2018). AIOCD Pharma Softech Awacs. Retrieved September 15, 2018, from https://aiocdawacs.com/Default.aspx.
- FICCI. (2018). Trends & Opportunities for Indian Pharma. Retrieved from http://ficci.in/spdocument/22944/india-pharma-2018-ficci.pdf.
- IBEF. (2018). Indian Pharmaceuticals Industry Analysis: A Sectoral Presentation. Retrieved September 15, 2018, from https://www.ibef.org/industry/indian-pharmaceuticals-industry-analysis-presentation.
- Statista. (2017). Pharmaceutical market worldwide revenue 2001-2016 | Statistic. Retrieved September 15, 2018, from https://www.statista.com/statistics/263102/pharmaceutical-market-worldwide-revenue-since-2001/.
- Trading Economics. (2018). India Exports By Country. Retrieved September 15, 2018, from https://tradingeconomics.com/india/exports-by-country.