GThesizeoftheIndianpharmaceuticalindustryisestimatedatRs.231billion,growingattheannualrateof17%(compoundedannualgrowthrateforFY1996-2001).GTheIndianpharmaceuticalindustryisthefourthlargestgloballyinvolumeterms,andisalmostself-sufficient.However,thegrowthinthebulkdrugssegmenthasbeenhigherthanthatinformulations,primarilybecauseofexports.GTherearearound20,053playersintheIndianpharmaceuticalindustry,whichhoweverischaracterisedbyanincreasingconcentrationatthetop.GMultinationalcorporations,whichhaddominatedtheIndianpharmaceuticalmarketintheinitialstages,havebeenexperiencingadeclineintheirmarketsharessince1970,followingintroductionoftheprocesspatentregime.GGovernmentencouragementofthesmall-scalesectortilltherecentpastpreparedthegroundforsmallpharmaceuticalunitstomushroomandflourish.Manysuchunitsbecamecontractmanufacturersfortheirlargercounterparts.GAsaconsequenceoftheexcesscapacityintheinternationalmarkets,bulkdrugpriceshavewitnessedasteepdeclineinalltheprominenttherapeuticsegmentseveninIndia.Thepricesofformulationsinthedomesticmarket,ontheotherhand,haveremainedsteadyorincreasedincertainsegmentssince1994-95.GIndia’sexportsofpharmaceuticalproductswereworthRs.87.3billioninFY2001,withasubstantialproportionofthetotalexportsbeingaccountedforbyoff-patentdrugs.DevelopedcountriesliketheUSandthosebelongingtotheEuropeanUnion,followedbyAsiannations,accountforthelargestproportionofIndia’sbulkdrugexports.ThemajordestinationsforformulationexportsincludedevelopingcountriesintheCommonwealthofIndependentStates,AfricaandAsiaevenassubstantialexportsarealsomadetotheUSanddevelopedEuropeancountries.GIndianimportsofpharmaceuticalproductsincreasedatthecompoundedannualgrowthrateofaround22%duringFY1991-2001totouchRs.29.8billioninFY2001.5ChapterHIGHLIGHTSINDIANMARKETSTRUCTURETHEINDIANPHARMACEUTICALINDUSTRYPage65PRODUCTANDTECHNOLOGYPRODUCTANDTECHNOLOGYPRODUCTANDTECHNOLOGYPRODUCTANDTECHNOLOGYPRODUCTANDTECHNOLOGYINDIANMARKETSTRUCTUREINTRODUCTIONTheIndianpharmaceuticalindustryhasachievedacompoundedannualgrowthrate(CAGR)of17%since1996toreachatotalturnoverofRs.23127billioninFY2001.Theindustryhasover20,000unitsreportedlyengagedinthemanufactureofpharmaceuticalproducts.AccordingtotheestimatesoftheOrganisationofPharmaceuticalProducersofIndia(OPPI),289firmsintheorganisedsector28accountforaround60%ofthetotaloutputoftheindustry.Further,around1,500companiesinthesmall-scaleindustry(SSI)andtinysectorsareengagedintheformulationsbusiness,accordingtotheOPPIestimates.ThetotalinvestmentinfixedassetsintheIndianpharmaceuticalindustryasattheendofFY2001stoodatRs.29billion,whichappearsverysmallcomparedwiththecapitalinvestmentglobally.ThesizeoftheIndianmarketforpharmaceuticalproductswasnegligibleintheearlydaysofIndependence,withtheproductionaddinguptoamereRs.4billioninvalueterms.Tillthe1970s,themultinationalplayersdominatedtheIndianindustrywithacumulativemarketshareofabout80%.Subsequently,topromotethedevelopmentofthedomesticpharmaceuticalindustry,theGovernmentofIndia(GoI)introducedregulatorynormsfavouringprocesspatents(asopposedtoproductpatents).Atthesametime,domesticdrugpricesweresetatverylowlevelsandhighimporttariffsimposed.Allthesemeasurescauseddomesticpharmaceuticalcompaniestoreporthealthygrowth,evenasthemarketshareofthemultinationalsdeclinedgradually.MarketsizeGloballyFourthinVolumeTermsTheIndianpharmaceuticalindustryisone...
