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Thursday 21st June 2018

Indian drug sales suffer

13th May 2009

Economic conditions in the US have affected the Indian pharmaceutical industry, leading to calls for government intervention.


The industry is the worst hit by the depression: from October, 2008 to the end of February this year Indian drug exports fell by almost 40%.

In addition, the Indian Ministry of Industry and Commerce has told the government that it must strive to bolster the country's drug companies from the threat of takeover by multinational corporations.

In a report by a special task force, the Ministry said that changes to Indian intellectual property laws made at the beginning of 2005 have left drugmakers more exposed and vulnerable than before.

The task force said India's pharma industry was in a state of fragmentation, and that takeover by multinational firms would adversely affect the interests of the nation.

It said there was an argument to be made in favour of internal consolidation.

India needed to develop stronger companies that had width and depth in market access and  manufacturing, as well as in research and development.

The report said that while India was undisputedly a leader in the global pharmaceutical industry, several untapped business segments and markets exist, and the room to enhance the country’s pharmaceutical exports is vast.

The proposed solution was to seize some portion of the US$123 bilion market currently protected by copyright law that is set to expire in 2013.

If India were to take only 15% of this market, that would equate to US$18.4 billion in sales.

Furthermore, if India and China were to seize up to 40% of the market in clinical trials, finished dosage formulations, intermediaries, and active pharmaceutical ingredients (APIs), then India alone would see US$300 million in economic gains.

The report said that India was in a position to emerge as a global leader in pharmaceuticals, due to the low cost of starting or running a business there, and that the country also had plenty of the necessary experience in manufacturing, research and development to put the Ministry's proposal into action.

It said that India was in a position to emerge as the health keeper of the world, and that it must strengthen its reputation in the world of pharmaceuticals, especially because third world countries regard it as a cheap source of alternatives to expensive health care.

With over one billion people of its own to care for, India needed to develop a viable strategy to maintain the current dominance in chemistry, develop biology and to create drugs that could help the nation, the report said.

Indian pharmaceutical exports grew at a compound annual rate of 17.8% during the five years to 2008, and the domestic market is expected to increase by an annual average of 9.9% to 2010, decreasing slightly to 9.5% until 2015.

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