Growing at compounded annual growth rate of nearly 14% in the next few years, the Indian pharmaceutical market is expected to touch USD 40 billion by 2015, predicts the global management consulting major Mckinsey and Company.
Indian pharma market, which is currently valued at USD 20 billion, could see the figure almost double in next 5 years majorly propelled by the steady growth in the domestic segment. Related story: Indian pharma market sales up despite recession.
The domestic market which is growing at almost 10 to 14 per cent at present itself will provide US$ 20 to 24 billion in 2015 and the exports and contract manufacturing business, which are growing at 10 per cent per annum, will contribute to achieve the predicted growth.
Contract manufacturing business, which registered US$ 4 billion in 2007 is expected to reach 10 billion in 2015, with a 25 per cent growth rate. Contract manufacturing opportunity for India including for the international generic business is forecast to the level of US$ 18 to 20 billion.
Contract manufacturing of core products of multi nationals in India is anotheropportunity for domestic companies as that business itself could add US$ 7 to 8 billion by 2015.
India’s potential in R&D will be between US$ 8 to 10 billion by 2020.
McKinsey has presented the latest forecast in the India Pharma Summit 2009, jointly organised by Department of Pharmaceuticals, Government of India, Federation of Indian Chambers of Commerce & Industry (FICCI) and the event management group – United Business Media (UBM) at Mumbai.
By 2015, the manufacturing opportunity in India including for the international generic business and the contract manufacturing business will be at US$ 18 to 20 billion. Considering the current growth rates and the opportunities available and the positioning of Indian pharma in the global generic market, it is not hard to expect Indian pharma industry to reach US$ 40 billion by 2015, Palash Mitra, partner, McKinsey and Company Inc, was quoted as saying while presenting his study – Indian Pharma – Status and Opportunities for Production, Investment & Trade, in the Summit.
India, however,will have to address certain challenges in terms of patent protection, intellectual property rights and regulatory changes to achieve the goal, Mckinsey noted.
Gaps in healthcare spendings and infrastructure facilities, low insurance penetration, lack of certain specialised disciplines and capabilities in various areas, especially in R&D and aspects related to product quality are the major challenges posed on the industry at present.
Infrastructure is another key impeding on India’s path to progress. Capabilities in critical functional areas and infrastructure in manufacturing and research sectors require urgent strengthening.
Indian companies should shift their focus from market capture to market creation, by entering into rural or unexplored areas. The companies should also customise the India business model and should explore global scale partnerships with capable firms for future growth.