Increasing incomes to boost costly drug sales: FICCI
22 Sep 2009
The increasing number of Indians in the higher-income bracket will open a potential $8-billion market for multinational companies selling costly drugs in India by 2015, a study by trade body FICCI and professional services provider Ernst & Young has said.
The report of the joint study said the domestic pharmaceutical market is likely to treble to $20 billion by 2015 from $7.1 billion in 2007, with a compounded annual growth rate of 12.3 per cent.
The population in the highest income class is expected to grow to 25 million from 10 million by 2015, driving the affordability of high-patent drugs. Patented products may capture 8-10 per cent of the total market by 2015, the report said.
With this growth, India would be among the top 10 global pharmaceutical markets by 2015, making India a lucrative destination for clinical trials for global giants. India has a significant cost advantage in the conduct of clinical trials, including infrastructure, operational, patient recruitment, drug, manpower, data management and processing costs, it says.
The report mentions that the product patent regime of 2005 has enhanced the country's patent infrastructure, and will help the multinationals. "The patent infrastructure in the country has been appreciably upgraded over the past few years to support new laws with the addition of patent examiners, de centralisation of the filing process and digitisation of records," it said.
The report mentions that multinational companies are consolidating their presence in India and new entrants are increasing. Companies like BMS and Merck that had exited the Indian market have come back, while others like Daiichi and Ranbaxy are expanding. "MNCs are increasingly restructuring their operations, with global parents increasing their equity stakes in their Indian affiliates," it said.
