Sep 23, 2009|
Indian pharma's growing clout
According a report prepared by Ernst & Young, India's pharma market which is pegged at US$ 7 bn currently is likely to reach US$ 20 bn by 2015 and move into the world's top 10 markets. The report further states that MNCs with patented drugs could account for US$ 8 bn in the domestic pharma market which works out to be nearly 8-10% of the total market. The reasons that have been cited for the same are the introduction of the product patent law and the fact that the population in the highest income class is expected to grow to 25 m in 2015 from 10 m at present. The latter especially is expected to drive the affordability of high value patented drugs. Further clinical trial research is also gaining significant prominence in the country due to its cost advantage as costs are typically 40-60% lower than in the developed countries and around 20% lower than those in the other emerging economies.
Having said that, while the product patent law has been a major landmark in the domestic pharma market there are still various anomalies in the same. As a result of this, MNC pharma companies are not launching products in the domestic market at a fast pace as was originally envisaged. Besides, since the prices of certain drugs are under the purview of the DPCO, MNC pharma companies will have to negotiate for the prices of their patented drugs even if the highest income class is able to afford the same. Thus, while the potential for the domestic pharma market to grow is immense, it remains to be seen how it will pan out by 2015.
India's GDP to grow 6%
India's GDP growth in FY10 has been a matter of contention with the main point of discussion being whether India will be able to register a growth of 6%. Just when the country was beginning to get its act together after a relatively tepid growth in FY09, deficient monsoons this season turned the tables and many were compelled to re-look at the assumptions that were made for India's growth this fiscal. While the CMIE and the UNCTAD are of the opinion that the growth this fiscal will be a tad below 6%, the government and the RBI are confident that India will be able to log in a growth of 6% plus. The Asian Development Bank (ADB) seems to concur with the latter and has raised India's FY10 growth forecast to 6% on higher public spending, stronger factory output and improved business confidence. However, this comes with a caveat and that the fiscal deficit is rising.
Further, the ADB expects Indian economy to grow by 7% from the previously estimated 6.5% in FY11 on hopes of better rainfall and a rebound in exports. The ADB is of the opinion that India's growing fiscal deficit (6.2% of GDP in FY09), following a public expenditure-led growth strategy, poses a risk to the economy and could crowd out private investment. While the Indian government aims to bring down this deficit to 5.5% in FY11 and further to 4% in FY12, it will be a challenging task indeed!
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 17, 2017
PersonalFN simplifies the mutual fund account statement for you.
Aug 17, 2017
A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.
Aug 17, 2017
Mr Trump is in the White House and the gods are in their heavens; what's not to like?
Aug 16, 2017
All across the country, the old gods become devils. New, gluten-free gods take their places...
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 4, 2017
The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407