Life sciences and healthcare
The Indian pharmaceutical market was almost nonexistent up until the 1970s. Today, India has gained immense importance and carved a niche for itself in the pharmaceutical domain.
In fact, India is one of the top-five emerging pharmaceutical markets, and is projected to surpass other leading emerging economies in the 21st century as a global center for end-to- end drug discovery and innovation. Its market size has grown at an estimated compound annual growth rate (CAGR) of 13 percent during FY 2009–2013. The country’s pharma industry accounts for about 1.4 percent of the global pharma industry in value terms and 10 percent in volume terms (as per India Brand Equity Foundation; August 2014).
India’s pharmaceutical sector will strongly benefit from a favorable macroeconomic environment, increasing purchasing power, and awareness of and demand by the rising middle class. The sector is already witnessing large acquisition activities, growth in health care insurance coverage, and innovation in health care products and services. There is also growing demand for medical tourism.
The changing profile of health problems, rise in early detection of acute diseases, and increasing availability of treatment facilities have boosted the demand for drugs and quality medications. The need for health care diagnostic facilities in the metropolitan areas has also risen, due to a rising middle class that is now more aware of the benefits of such utilities. Additionally, this sector has started to penetrate rural markets, as well as urban. Although a large proportion of the rural market still remains untapped, it represents a huge growth opportunity for pharmaceutical companies.
In India, generics account for about 75 percent of the drug market, and they will continue to dominate the market in the medium term to long term (as per Industry Report, Healthcare: India, The Economist Intelligence Unit, July 2014). However, the sale of patented products may pick up in five years to 10 years with the improvement and implementation of patent laws and increased reach of health insurance to the public. With better public awareness of common ailments and the ease of availability of products everywhere from post offices to local department stores, the over-the-counter segment is expected to be one of the potential growth drivers for the sector. The government has unveiled “Pharma Vision 2020,” with a goal to make India a global leader in end-to-end manufacturing. These initiatives will help boost investments in this sector. Significant investments by multinationals and PPPs for strengthening health infrastructure will propel the pharmaceutical sector to new heights. The Indian pharmaceutical industry is projected to surpass other leading emerging economies in the 21st century as a global center for end-to-end drug discovery and innovation.