The increasing number of consolidations and in-licensing agreements between Multinational Corporations (MNC) and Indian companies highlights the growing significance of the country’s pharmaceutical market. This was stated at by business intelligence firm GBI Research.
The company’s latest report mentions that MNCs have extended a greater reach into the Indian pharma space following the introduction of product patents in 2005, 100 per cent Foreign Direct Investment (FDI) in pharma in 2006, and after witnessing the strong growth prospects for generics and biosimilars in the country.
Mergers and Acquisition (M&A) activity has been substantial in recent years with numerous deals taking place between 2007 and 2012, adding up to a value of around $1 billion. Company partnerships have also been a common theme within the Indian pharma market: approximately 400 partnerships were formed over the 2007-2012 period – the majority of which were valued at more than $100 million.
GBI Research also expects India’s pharma industry to grow as a result of rising income levels. As 80 per cent of healthcare expenditure in India is out-of-pocket, higher average wages are expected to make health insurance more affordable, lead to more Indian citizens seeking treatment for previously neglected conditions and boost prescription compliance.
However, despite these drivers of pharma market growth, India still faces some significant obstacles in providing a high level of healthcare across the country. For example, the country’s healthcare workforce is very small compared to its large population – far smaller than more economically developed countries such as the US, Denmark and Australia, and lagging behind other emerging nations including South Africa and Brazil.
Additionally, drug counterfeiting has developed as a major concern within the sector and many companies are reluctant to pursue cases of counterfeit medicines due to the possibility of bad publicity and a loss of confidence among consumers.
EP News Bureau – Mumbai
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