Indian pharmaceuticals market is expected to touch US $55 billion by 2020 from the current level of US $36.7 billion in 2016 growing at a compound annual growth rate (CAGR) of 15.92%, according to ASSOCHAM-IITTM joint study.
Indian pharmaceuticals market increased at a CAGR of 17.46% during 2005-16 with the market increasing from US $6 billion in 2005 to US $36.7 billion in 2016.
By 2020, India is likely to be among the top 3 pharmaceutical markets in terms of incremental growth and 6th largest market globally in terms of absolute size, noted the study titled ‘Medical Value Travel (MVT),’ jointly conducted by ASSOCHAM and research firm, Indian Institute of Tourism and Travel Management (IITTM).
The Union Cabinet has given its nod for the amendment of the existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100 % under the automatic route for manufacturing of medical devices subject to certain conditions.
The drugs and pharmaceuticals sector attracted cumulative FDI inflows worth US$ 13.85 billion between April 2000 and March 2016, according to data released by the Department of Industrial Policy and Promotion (DIPP).
Some of the Major Investments in the Indian Pharmaceutical Sector are as follows:
- India’s largest drug maker Sun Pharmaceutical Industries Limited has entered into a distribution agreement with Japan’s Mitsubishi Tanabe Pharma Corporation to market 14 prescription brands in Japan.
- Syngene International Limited will be setting up its fourth exclusive Research and Development (R&D) center named Syngene Amgen Research and Development Center (SARC) for a US-based biotechnology company Amgen Incorporation in Bengaluru.
- India’s third largest drug maker Lupin Limited plans to file its first biosimilar Etanercept for approval in Japan, world’s second largest drug market, in 2017.
- Rubicon Research Pvt Ltd, a contract research and manufacturing services firm, is in advanced talks with Everstone Capital and a few high-net-worth Individuals (HNI) to raise up to Rs 240 crore (US$ 35.79 million), which will be used to increase the company’s manufacturing capabilities.
- Lupin Ltd plans to acquire a portfolio of 21 generic brands from Japan-based Shionogi & Co Ltd for Rs 10.08 billion (US$ 150.3 million), which will help to strengthen its presence in the world’s second largest pharmaceutical market.
- International Finance Corporation (IFC), the investment arm of the World Bank, plans to invest upto US$ 75 million in Glenmark, which is looking to raise around US$ 200 million for expansion and the launch of several new products in India and other emerging markets over the next three years.
- Cipla Limited plans to invest around Rs 600 crore (US$ 89.47 million) to set up a biosimilar manufacturing facility in South Africa for making affordable cancer drugs and growing its presence in the market.
- Rusan Pharma, a firm which specialises in de-addiction and pain management products, plans to invest Rs 100 crore (US$ 14.91 million) in a R&D centre and a manufacturing unit in Kandla, located in Kutch District in Gujarat.
- The Medicines Patent Pool (MPP) has signed a licencing agreement with six Indian drug makers for the generic manufacturing of four antiretrovirals (ARV) and hepatitis C direct-acting antiviral drug Daclatasvir.
- Dr Reddy’s Laboratories, one of the major pharmaceutical companies of India, has entered into a strategic collaboration agreement with Turkey-based TR-Pharm, to register and subsequently commercialise three biosimilar products in Turkey.
- Lupin has completed the acquisition of US-based GAVIS Pharmaceuticals in a deal worth US$ 880 million, which is expected to enhance its product pipeline in dermatology, controlled substances and high-value speciality products.
- Cipla Ltd, one of the major pharmaceutical and biotechnology companies in India, has acquired two US-based generic drug makers, InvaGen Pharmaceuticals Inc. and Exelan Pharmaceuticals Inc., for US$ 550 million, which is expected to strengthen Cipla’s US business.
- Emcure Pharmaceuticals has acquired Canada’s International Pharmaceutical Generics Ltd and its marketing arm Marcan Pharmaceuticals in order to boost its global expansion drive.
- Cipla announced the acquisition of two US-based companies, InvaGen Pharmaceuticals Inc. and Exelan Pharmaceuticals Inc., for US$550 million.
- Glaxosmithkline Pharmaceuticals has started work on its largest greenfield tablet manufacturing facility in Vemgal in Kolar district, Karnataka, with an estimated investment of Rs 1,000 crore (US$ 149.11 million).
- Lupin has acquired two US based pharmaceutical firms, Gavis Pharmaceuticals LLC and Novel Laboratories Inc, in a deal worth at US$ 880 million.
- StelisBiopharma announced the breakthrough construction of its customised, multi-product, biopharmaceutical manufacturing facility at Bio-Xcell Biotechnology Park in Nusajaya, Johor, Malaysia’s park and ecosystem for industrial and healthcare biotechnology at a total project investment amount of US$ 60 million.
- Strides Arcolab entered into a licensing agreement with US-based Gilead Sciences Inc to manufacture and distribute the latter’s cost-efficient TenofovirAlafenamide (TAF) product to treat HIV patients in developing countries. The licence to manufacture Gilead’s low-cost drug extends to 112 countries.
According to joint report, Indian Health Care is expected to rise at a rate of CAGR of 29% during 2015-20 to US $280 billion with rising income, greater health awareness, increased precedence of lifestyle diseases and improved access to insurance,
The year 2015 witnessed the growth of 140% of foreign tourist’s arrival on medical visa from the year 2013, where more than 50,000 people visited India on medical visa. This number rose to approx 1,34,000 in 2015. In fact, the number of foreign tourist’s arrival on a medical attendant visa also doubled from 2013 to 2015, increasing from 42,000 odd in 2013 to more than 99,000 in 2015, adds the study.
The study reveals that in the first 6 months of 2016 alone, close to a lakh foreign tourists arrived on a medical visa thereby making it a very lucrative market. The top most countries availing medical visa were Bangladesh, Afghanistan, Maldives, Republic of Korea and Nigeria.
The majority of the patients coming to India for treatment are from the the Middle East, Africa, Bangladesh, Afghanistan, Maldives, Pakistan, Bhutan and Sri Lanka for its expertise in Cardiac and Orthopaedic procedures, in addition to other specialized areas like Neuro-surgeries, Cancer treatment and Organ transplantation. India is also attracting medical tourists looking for the traditional system of medicine available in India, noted the study.
Holistic Medical Services in India, such as :
- Ayurveda, and Homeopathic treatments (AYUSH) also serve as a huge attraction.
There are few accredited hospitals in India. Thailand being a smaller nation has 55 JCI accredited medical facilities. Lack of enough accredited medical facilities decreases the supply potentials of India as a medical tourism hub. Though the cost of treatment in India is less but there is high cost of accommodation which creates a barrier for low income group patients. There is also lack of proper regulatory and review framework related to medical tourism giving way to many legal and ethical issues.
Many problems arise due to lack of synergy between various stakeholders. Stringent medical visa rules also create a barrier as it makes the process of entering into the country difficult. This issue is high on radar due to the influx of medical tourists from ISIS hit countries which creates huge security issue for India, highlighted the joint study.
Pharma sector of India has lot of potential. In some days they may outclass IT sector if it utilities its capacity.
The government of India has recognized the potential of medical tourism and has come up with supporting policies. The Indian Ministry of Tourism is actively promoting medical tourism through overseas road shows where market development assistance (MDA) is provided to medical and wellness tourism service providers to encourage overseas promotion. The government has introduced medical visa to govern medical tourism. In order to further expand the healthcare system and enhance its quality, the government also actively provides incentives and gives special approvals to foreign firms for direct investments.
India’s cost of production is significantly lower than that of the US and almost half of that of Europe. It gives a competitive edge to India over others. Growing number of medical facilities are realizing the importance of accreditation and certification leading to many labs and hospitals taking up the same. This could increase the number of accredited facilities in India.