The pharmaceutical industry in India ranks 3rd in the world in terms of volume and an impressive 14th in the world in terms of value. This makes it an important milestone in the pharmaceutical industry in the world. The information below highlights the important aspects of India’s pharmaceutical industry.
MARKET In 2015-2016 the industry recorded $50 billion with 47% of the money coming in from the retail sector. The market is highly fragmented with over550, 000 retail supply chains. The number has significantly increased with statistics showing retail suppliers have multiplied 4 fold in the past three decades. His however, does not apply in the prescriptions administered to consumers. In terms of global market the pharmaceutical industry in India holds about 1-2% share but it has been growing at a fast rate of 10% every year.
The industry has in the past few years experienced a major paradigm shift reason being the pharmaceutical companies in the past used to store their products in warehouses before distribution but the recent changes have seen to it that the Clearing and Forwarding Agents (CFAs) have taken charge of distribution. The CFAs are paid once or twice every year in respect to a certain percentage of the turnover as stipulated in the policy linking the CFAs and the pharmaceutical companies. After the CFAs the chain of distribution passes on to stockists who in turn avail the products to the retail pharmacies. The retail pharmacies eventually pass on the products to the consumers (patients).
The pharma franchise in India has policies that are mostly issued by the government and they most apply throughout the country. Some of these policies are:
The order contains the list of the price controlled drugs, procedure for fixation of drug prices and penalties for contravention of the stipulated prices. The price control order is meant to ensure that there is abundant supply of drugs, the drugs are provided at a reasonable price, and quality of the drugs meet the required specifications, promote rational use of drugs and strengthen the indigenous capability of production of drugs.
This policy indicates the norm in respect to the following intellectual property rights; copyrights, trademarks, geographical indications, and protection of undisclosed information about the product.
Indian pharmaceutical companies have started adapting to product development processes in the recent past. For quiet some years now these companies have made their way in the global market by identifying the generic competitors to patent drugs and following up with the necessary litigation to support the patent. Those who can afford it have set higher goals by planning to venture into molecular discoveries. The initial investment is high, but the hefty profit margins at the end of it all have lured multiple companies in the pharma franchise in India.
The pharmaceutical sector in India has been said to be uncertain and volatile, while in some cases it might be true the larger part of it is hogwash by global competitors. The sector has however risen up to the challenge and put measures such as price controls, compulsory licensing and changing the FDI policy.