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Pharma Summit: Key takeaways

Sep 19, 2006

Indian pharma companies have been building a footprint in the global pharma market prompted by the introduction of the product patent law in the country and the fierce competition in the domestic pharma market. Against this backdrop, the CII had organized the Pharma Summit late last week, which discussed the opportunities for Indian pharma companies, which are competing globally. We attended the meet and the following are the key extracts of the same: Global opportunities: The introduction of the product patent law from January 1, 2005 has heralded a significant change in the Indian pharmaceutical industry. Not only has it intensified the efforts made by domestic pharma companies in making increasing strides in the global generic markets but has also prompted global pharma companies express renewed interest in the Indian markets by either launching products in the country or using India as a base to cater to the other global markets. Some of the opportunities are enumerated here as follows:

  • Generics: The generics market in the US and Europe continue to be lucrative for domestic pharma companies despite a highly competitive environment and pricing pressures. After a long time, domestic companies tasted success on the patent challenge front with Ranbaxy getting exclusivity for ‘Simvastatin 80 mg’, Sun Pharma for ‘Ultracet’ and Dr.Reddy’s being the authorised generic for ‘Simvastatin’ and ‘Proscar’. The industry continued with its dominant position with a 35% share of the global DMF filings and participated in every possible patent expiry opportunity.

  • CRAMS: India is fast becoming a leading hub for contract manufacturing and research (CRAMS) with advantages such as US FDA approved facilities, manufacturing capabilities, R&D base, superior IT skills, cost efficiency and a pool of skilled personnel. It must be noted that for both contract research and contract manufacturing, establishing relationships with global pharma companies is critical and Indian pharma companies are increasingly building long-term relationships with these companies. With strength in both APIs and formulations, Indian pharma companies are present across the value chain and consequently have the edge over their Western counterparts.

  • Acquisitions: Acquisitions at the global level have also been at the forefront in charting the growth path. A few acquisitions have catapulted Indian companies in the global league, namely Dr.Reddy’s acquisition of Betapharm, Ranbaxy’s acquisition of Terapia (both of these were in the generics space) and Nicholas Piramal’s acquisition of Avecia in the contract manufacturing space. Another notable feature was the fact that all these acquisitions were in the European region, which is turning to be the second most important region to drive growth after the highly competitive US market.

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