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Overview of Development, Manufacturing & Global Marketing from India Dr Brian W Tempest President – Pharmaceuticals New Delhi


 
 

Overview of Development, Manufacturing & Global Marketing from India 
 

Dr Brian W Tempest

President Pharmaceuticals 

New Delhi

February 12, 2002


 
 

Once R&D discovers, 

Can the Indian Pharma Industry develop, manufacture 

& market around the world? R&D discovers


 
 

Global Pharmaceutical Industry 

  • Global pharma market ~ $ 362 bn - 2000 estimates
  • Top 10 companies have ~ 40 % market share
  • 10 countries presently cover ~ 80% of global pharma market
  • Generics opportunities
    • ~ $45 bn in advanced markets by 2005
    • Government focus on affordable health care costs
 

Blockbuster Patent Expirations

(adjusted for patent extensions) 

in $ Bn


 
 

Source: IMS World Review 2000 

    Rank in 2005

  1. USA (1)
  2. Japan  (2)
  3. Germany (3)
  4. France  (4)
  5. UK  (5)
  6. Italy  (6)
  7. Mexico  (11) 
  8. China  (7) 
  9. Brazil  (8
  10. Canada  (9) 
  11. Spain  (10
  12. India  (14) 
 

    (Rank in 2000) 

  • Total market CAGR ( 1995 - 2000) = 5.3%
  • US market CAGR ( 1995 - 2000) = 12.4%
  • Total market growth in 2000 = 6.9%
    • US contribution ~ 55% ( $18.2 bn)
 

$ 282 bn 

$ 362 bn 

World Pharma Markets


 
 

Source: IMS World Review 2000 

  

US 

31% 

Europe 

19% 

Japan 

11% 

Others 

39% 

Generics Market in 2000 ~ USD 36 bn 

Emerging Markets in 2000 ~ USD 30 bn

(Latin America, China, India, Russia) 

World Generics and Emerging Markets


 
 

Indian Pharma Market 

  • Size ~ $ 4 Bn in 1999
  • 8% of Global Volume, 1% of global value
  • Rank 5th in volume , 14th in value terms
  • Number of drugs under price control
    • 1979 347 90% of market
    • 1995 74 50%
    • 2000 ? ?
  • Exports of $ 1.7 b, Imports of $ 0.7b
  • Prescription driven, Branded Generic market
  • Modern Medicine reach 30% of population

Manufacturing capabilities  

  •  Employs  approx. 1.86 mn people
  • Has 10000  manufacturing units.
  • 2900 large scale and 7100 in small scale sector
  • Total production stands at $ 4.2 bn.
  • 95 % Formulations manufactured indigenously
  • 90% of bulk drug requirement met  indigenously
 

RANBAXY


Production capacity  of  Indian Pharma Industry  

Rs Crores * 

*1Crore = 10 Million 

RANBAXY


Investment in Indian Pharma Industry 

RANBAXY


 
 

The Indian Pharma Market 

API

manufacturing 
 

90 -

100 

250 

Organized

domestic sector 

80 

Exporting 

International

operations 

6 

8 

Accredited

R&D facilities 

Average spend ~ 3.5% 

New drugs research 

3 

70% of

pharma

Market

($ 3.5b) 

75% of

API

Production

($ 700m) 

90% of

pharma

Exports

($1.4b) 

65% of

total R&D

Spend

($ 75m) 

80% of JVs

and foreign

investment 

Ranbaxy present in all categories


Improvement in health indicators

in India over the years 

RANBAXY


Exports of Pharmaceutical Products from India 

RANBAXY


Significant Presence  

 

  • India ranks 5th among the drug producing countries

   in volume terms and 14th in Value terms. 

  • 8% share of global pharmaceuticals production.
  • Market size of $ 3.5 bn growing at 16% 
  • 23,000 companies registered. 

 

  • 350 companies operating nationally.
 

 

    

RANBAXY


Comparative Drug Prices  

31.07 

12.76 

Naproxen 250mg

(antiarthritic) 

41.16 

13.58 

Haloperidol 5mg

(cardioprotective) 

61.15 

11.29 

Atenolol 100mg

(cardiovascular) 

40.89 

15.26 

Diltiazem 60mg

(antihpertensive) 

29.90 

3.82 

Nifedipine 10mg

(cardiovascular) 

58.56 

15.45 

Captopril 25mg

(antihypertensive) 

121.67 

16.15 

Ranitidine 150mg

(anti-ulcer) 

36.40 

6.77 

Cimetidine 200mg

(anti-ulcer) 

UK 

INDIA 

DRUG 

Rupees 

RANBAXY


Key elements in the success

of Indian Pharma Industry 

  •  Entrepreneurship and Scientific & Technological skills
  • Reversing brain drain 
  • Strong capacity to learn, absorb, and adopt process technologies 
  • World class capabilities in Quality Management ensured approvals 

   by US-FDA, UK-MCA, Australian-TGA and SA-MCC 

  • Moving up the value chain in R&D – Process development to

  Analog research , NDDS, Chiral research and  NCEs 
 
 

RANBAXY


Competitive edge of  
Indian Pharmaceutical Companies 

  • Immense flexibility of industry to move from one drug to another
  • Strong presence in foreign markets, net exporter of bulk drugs & formulations 
  • Advantage of low costs and availability of high skills in process development 
  • Cost of R&D much lower compared to other nations 
  • India has third largest scientific pool in the world 
  • In volume terms India produces 8-10% of worlds volume 
 

RANBAXY


 
 

Ranbaxy Competitive Edges 

  • Brand Marketing
    • Origins in India cut throat competition
    • USA Commodity generics
  • Backward Integration
    • Control API costs
    • Not locked into suppliers
    • Productivity breakthroughs
  • R&D
    • Low cost
    • Excellent chemical research skills

Unique Price advantage 

  • Lower production cost due to reverse engineering capabilities
  • Lower input cost due to indigenously manufactured raw material
  • Low labor costs
  • Inexpensive machinery
  • Government��s policies
 

RANBAXY


 
 

PCT applications from developing countries 

   Company Country Applications

  1. Samsung Electronics Korea 112
  2. Shanghai Gere China 105
  3. Shanghai Gere China 97
  4. Fudon University China 71
  5. LG Electronics Korea 38
  6. Korea Institute of Technology Korea 32
  7. LG Chemicals Korea 30
  8. Ranbaxy India 22
  9. Samsung Chemicals Korea 22
  10. Korea ???Bwker Institute Korea 20

 


 
 

Strategic Architecture for Ranbaxy �� products 

Gross margins 

  • Technology barriers
  • Business risk
  • R&D investment
  • Regulatory requirements
  • Scale management
  • Information intensity
 

Teachnological & Marketing complexity 

NCE

NDDR 

60-80% 

Intermediates &

Bulk

Substances 
 
 
 

2 - 12% 

Commodity generics 

12 - 20% 

Conven-tional dosage forms 

20 - 30% 

Value Added/ Branded

Generics 

30-40% 

NDDS 

OTC 

45- 60%


 
 

Market Mix - Changing Profile 

Developing 

Emerging 

Developed 

Regulatory / Technology / Cost Structure 

Russia 

China 

UK 

USA  

Australia 

Nigeria 

Brazil 

INDIA 

Egypt 

Vietnam 

Thailand 

S. Africa 

Poland 

Malaysia 

5 

79 

16 

4 

67 

29 

��99 

��04 

Sales Revenue % 

FW Africa 

Sri Lanka 

Japan


 
 

Business dynamics of markets 

Russia 

Germany 

UK 

USA  

W. Europe 

Nigeria 

Brazil 

INDIA 

Egypt 

Vietnam 

Thailand 

Kenya 

S. Africa 

Poland 

C. Europe 

Advanced 

Emerging 

Developing 

China 

Regulatory /marketing

complexity 

Cost / Returns 

Hi 

Hi 

Lo 

Lo 

Malaysia 

Myanmar 

Ukraine 

C. America 

Mexico 

Cote-d-Ivory 

Ireland 

Canada 

Cameroon 

Peru 

ANZ 

M.East


 
 

90��s 

80��s 

00��s  

Internationalization �� our changing         contours 

  + 

  

Advanced 

 

  

  

Developing 

   

  + 

   

Emerging 

Innovative research,    Patents, Legal Brand marketing for Rx products 

Developmental research,

Regulatory, Manufacturing, Marketing 

Backward integration 

Competencies 

Proprietary technology platforms (NDDS), VAGs, Rx products 

Generics, Branded Generics 

API,

Dosage Form 

Products 

Markets 

   

  

International 

   

   

India 

   

  

Exports 

Strategy


 
 

Thank You


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