Study says Indian Pharma needs to tap on emerging opportunities to grow

India pharma is emerging as a preferred destination for outsourcing drug discovery, clinical research and manufacturing functions.

A KPMG-CII report titled India Pharma Inc - An Emerging Global Pharma Hub released at the Pharma Summit 2008, highlights that the sector needs to further tap opportunities where the country can become a global pharma hub and help address challenges that it faces to get there.

The sector needs to shift from process innovation to building strong capabilities in discovery research that can drive India to a leadership position in the years to come.

Dramatic reduction in the approval of new drugs by FDA is one of the key challenges for the pharma sector.

Says Hitesh Gajaria, Sector Head – Pharmaceuticals, KPMG in India: “Amendments to India’s patent legislation in 2005 have proved to be a turning point which resulted in growth in the partnerships between Indian and foreign companies across a varied range of areas such as discovery research, development and manufacturing.”

“This market is projected to grow at a healthy compounded annual growth rate (CAGR) of 13% over the next four years to reach $73 billion by 2011.”

For many Indian companies, generics are still a key focus segment.

India has gradually established a dominant position through its aggressive global growth strategies and its steadily improving share in the export of Active Pharmaceutical Ingredients (APIs) and formulations.

More Indian companies are now exploring the Para IV strategy after having seen the success of the trendsetters in this space.

Also the product portfolios are being revamped to include niche and specialty products that are less susceptible to competition.

The sector is currently undergoing a challenging phase.

Firstly, a large portion of their revenues are at risk as drugs worth $47 billion are expected to go off patent in the US over the next three years.

Secondly, there has been an increased penetration of generics in global markets that have traditionally been dominated by innovator products.

The industry has also witnessed a considerable reduction in the number of new product approvals.

In 2007, the FDA approved just 19 new drugs, the lowest in 24 years.

Safety standards for new drug approvals have also become stricter as a result of the recent withdrawals and black-box warnings received by some high-profile drugs.