Updated on 23 May 2013
However, pricing pressures will not only come from increasing competition, but also from regulatory bodies. The new National Pharmaceutical Pricing Policy (NPPP), which is proposed to be implemented in the near future, could change the structure and dynamics of the Indian pharmaceutical industry. It is likely to impact the profitability of firms and would make new product introductions a challenging proposition. The Indian market, it should be noted, is already amongst the lowest priced in the world.
Another emerging trend, which will get more pronounced in the coming years, is that chronic therapies, such as diabetes, cardiovasculars, and products used to treat central nervous system ailments, are growing faster than acute therapy. Currently, the Indian pharmaceutical market is more than 60 percent acute with the rest being chronic.
The changing dynamics of the Indian pharma, calls for more collaboration rather than competition. Within a short span of eight years, Glenmark has made seven out-licensing deals with big pharma companies, which is a case in point. In the coming years, we will see more such collaborations with big pharma which will help Indian companies share risks and generate constant revenue.
Indian pharma companies also need to increasingly focus on their overseas businesses to drive growth. Patent expiry opportunities, coupled with efforts to contain healthcare spends, are likely to drive the generic market in developed markets like the US and Europe. On the other hand, affordability and availability will make a case for generics usage in the branded generic developing markets like Russia and Brazil. For example, in case of Glenmark, over 70 percent of our revenues comes from overseas or non-India operations.
In the coming years, innovation will be the key to success (and survival itself). The definition of innovation should expand beyond ‘reverse-engineering' to more challenging areas like new drug discovery and development. India is all set to enter the top 10 pharma markets of the world by 2015 (from its current position of 14th in terms of scale) and will continue to remain a priority market for all operating players. Competition will intensify in this market. The contract research and management services (CRAMS) opportunity will increase but making it profitable will depend on the way organizations are able to innovate the business model.
I am sure that just like in the past, the time has come for India to evolve and create a unique model that will benefit both patients and companies in our quest for providing quality and affordable medication for the entire world.