Indian pharma market to reach nearly $45 billion by 2018: Report

Indian pharmaceutical market is expected to reach a value of about $45 billion by 2018, growing at compounded annual growth of over 12% per annuam.

Indian pharmaceutical market, which is currently valued at $14.23 billion, will grow at a pace of compounded annual growth rate (CAGR) at 12.2 percent, to reach $44.99 billion by 2018, according to a new market research report from companiesandmarkets.com.

Pharmaceutical regulations are rapidly improving in India. In July 2009, the Indian Department of Biotechnology (DBT) planned to create a separate IP regulator for the biotechnology sector. The National Biotechnology Regulatory Board would be responsible for identifying and controlling drugs and vaccines which are developed from natural sources.

Drug Controller General of India (DCGI) has also identified six research and development (R&D) centers in which new drugs will be tested before they are launched.

In May 2009 the DCGI decided to centralize drug licensing withdrawing the powers given to state-level regulators to issue export quality licenses, which are called Certificates of Pharmaceutical Products.

DCGI’s move was designed to streamline and standardize procedures.

On the flip side, despite the enormous growth potential India’s intellectual property (IP) standards are still way below expectations.

India’s intellectual property IP regime is far below international standards, however, there are signs that the situation is changing.

In August 2009, health activists and some generic drug companies severely criticized the Indian Commerce Ministry’s decision to accept the Mashelkar committee’s recommendations to grant patents to new drugs.

Mashelkar Committee has recommended to allow patenting of incremental innovation under Section 3(d) of the Indian Patent Act, in the event that the candidate drug offers enhanced therapeutic efficacy. Patent experts supported the decision as it is in line with international norms.

Similarly, India’s pharmaceutical industry is gradually developing an undesirable reputation for acting as a hub for producing sub-standard medicines. During Q3 2009, regulators in the US and UK have blacklisted select batches of drugs made by firms based in the South Asian country.

While the scale of the seizures was small, BMI believes the implications are huge. Quality of manufacturing must improve, or demand for Indian-made pharmaceuticals will decrease.

The absence of some form of government-provided universal healthcare is another major draw back that could impede the growth of health care industry, especially, the health insurance sector.

India’s health insurance market is one of the most promising sectors in the world.

India-based Religare Enterprises’s signing of an agreement with Swiss Re to establish a joint venture with an initial investment of $100million in June 2009, further underscores the potential of India’s health insurance sector

Religare-Swiss Re operations are expected to start in 2010.Swiss Re was already present in the India health insurance market, holding a 26 percent stake (the maximum permissible) in TTK Healthcare Services, the report noted.