During this past November/December, I visited India with Jim Miller, the president of PharmSource. We made it a point to visit and tour through different CROs and also attended CPhI in Mumbai, India. The Indian pharmaceutical industry has been growing at double digits percent in the past five years, a significant increase over the 9% growth witnessed between 2000 and 2005. According to a joint report by the Federation of Indian Chamber of Commerce and Industry (FICCI) and Ernst and Young (E&Y) , five new opportunities will capture 45% of the market by 2020, growing from the $3-billion industry today to $14-18 billion in 2020. These include patented products, consumer healthcare, biologics, vaccines and public health.
Being the world's third largest producer of drugs by volume and the third largest drug R&D workforce, India is fast becoming the most preferred destination for contract research and clinical trials, says a study by an industry lobby. A joint study by the FICCI and E&Y also found clinical trials in India cost50-60% cheaper than in the developed markets.
"The Indian market is growing by leaps and bounds and is gearing itself to becoming one of the fastest growing clinical research destinations with a growth rate that is two-and-a-half times the overall market growth," the industry study said. The continued growth in Pharma R&D and generics manufacturing - as well as Contract Research & Manufacturing industry - is overwhelmingly visible when one walks through CPhI India Expo. When you visit CROs, you really tend to believe that there is enthusiasm as well as confidence amongst the entrepreneurs and the employees of the CROs, who keep themselves busy with work from the west (Europe and the U.S.) as well as from the emerging markets. Looking at some of India's Pharma R & D investments in infrastructure, I do feel that with some luck - and lots of smart work during the next decade - India's pharma industry could very well introduce its first NCE or NBE make a grand entry into the global market!
The country has a booming domestic pharma market that is growing at a rate of 12-14% annually. Additionally, the fact that India has 840,000 hospital beds in urban areas, over 600,000 English-speaking physicians and nearly 100,000 specialists, with many of them having been trained in the best global institutes, also adds to India's competitiveness.
The study said this was also a prime reason that nine of the top 15 global pharmaceutical and biotech companies have set up captive clinical research centers in the country. Interestingly, India constitutes 16% of the global population with 20% of the global disease burden.
Industry Trends: Global Scenario
According to pharma industry analysts, the global pharmaceutical market in 2011 is projected to grow 4-6%, exceeding $825 billion. The global pharmaceutical market is expected to grow at a 4-7% compound annual growth rate (CAGR) through 2013. This industry growth is driven by stronger near-term growth in the U.S. market and is based on the global macro economy, the changing combination of innovative and mature products apart from the rising influence of healthcare access and funding on market demand. Global pharma's market value is expected to expand to $975+ billion by 2013. Different regions of the world will influence the industry trends in different ways.
Asia-Pacific Pharmaceutical Market
Analysts also predict that the pharma market world over will experience significant shifts. Asia-Pacific region will emerge as the fastest growing market over the recent past. The reason for this positive shift can be attributed to the low costs and favorable regulatory environment. This region has experienced important developments regarding contract manufacturing, especially in generics and APIs. Increased R&D activities in the region have helped Asia-Pacific pharmaceutical industry to achieve an estimated market size of around $187 billion in 2009. Here, the pharmaceutical industry is expected to grow at a CAGR of around 12.6% during 2010-2012. It can, in fact, become the global API production hub in next few years.
If you look at the trend, pharmaceutical sales are growing at a fast rate in India, China, Malaysia, South Korea and Indonesia due to the rising disposable income, several health insurance schemes (ensuring the sales of branded drugs), and intense competition among top pharmaceutical companies in the region (boosting the availability of low-cost drugs). Even more, China's pharmaceutical market will continue to grow more than 20% annually, and will contribute 21% of overall global growth through 2013. India - third largest producer of pharmaceuticals across the world - is already an $8.2 billion pharmaceutical market. The Indian pharmaceutical industry is further expected to grow by 10% in the year 2011. I am sure the investment world is counting on India and China as the next geographies to bet upon for the real "growth markets" in the new decade!
Makarand (Mak) Jawadekar most recently served as Director, Portfolio Management and Performance at Pfizer Global R&D,until February 2010, when he opted for an early retirement after28 years at Pfizer Inc. He currently serves on several companies' advisory boards and also consults with bio/pharmaceutical companies for global outreach in emerging market regions. He can be reached at email@example.com.