Sector structure/Market size

India's pharmaceutical industry is now the third largest in the world in terms of volume and 14th in terms of value. According to data published by the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, total turnover of India's pharmaceuticals industry between September 2008 and September 2009 was US$ 21.04 billion. Of this the domestic market was worth US$ 12.3 billion.

According to a detailed research by Angel Broking in October 2009, by 2015, India is expected to rank among the top 10 global pharmaceutical markets. The industry is typically growing at around 1.5-1.6 times the country's gross domestic product (GDP) growth.

Moreover, according to an Ernst & Young and industry body study released in September 2009, the increasing population of the higher-income group in the country will, by 2015, open a potential US$ 8 billion market for multinational companies selling costly drugs. Besides, the report said the domestic pharma market is likely to touch US$ 20 billion by 2015, making India a lucrative destination for clinical trials for global giants.

Exports

Export of pharmaceutical products from India increased from US$ 6.23 billion in 2006-07 to US$ 7.74 billion in 2007-08 and to US$ 7.81 billion in 2008-09—a combined annual growth rate (CAGR) of 21.25 per cent, according to Minister of State for Commerce, Jyotiraditya M Scindia. Pharmaceutical exports from the country have recorded growth rates of 21.61 per cent, 14.37 per cent and 28.54 cent, respectively, in the three consecutive years of 2006-07, 2007-08 and 2008-09.

Pharmaceutical exports during April-December 2009 were worth US$ 6.3 billion, according to the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers.

Growth

The domestic pharma market will outshine the global market, growing at a compounded annual rate of 12-15 per cent as against a global average of 4-7 per cent during 2008-2013, according to a study by market research firm IMS, released in October 2009.

According to detailed research by Angel Broking in October 2009, socio-economic factors such as rising income levels, increasing affordability, gradual penetration of health insurance and the rise in chronic diseases would see the Indian formulation market touch US$ 13.7 billion by 2013, at a CAGR of 12.2 per cent over the period from fiscal year 2008 to 2013.

According to the research, the domestic formulation industry had registered a CAGR of 14 per cent during FY2003-08 from around US$ 3.9 billion to US$ 7.7 billion, outpacing the global pharma industry growth rate of 7 per cent.

According to a report published by RNCOS in April 2010, called 'Booming Pharma Sector in India', the industry is projected to continue growing at a CAGR of around 13 per cent during FY 2011-FY 2013. The formulations industry is expected to prosper parallel to the pharmaceutical industry. It is expected that the domestic formulations market in India will grow at an annual rate of around 17 per cent in FY 2010, owing to increasing middle class population and rapid urbanisation.

Pharmaceutical Retail

According to a report titled 'India Retail Research 2009' released in August 2009, pharmacy retail is growing at the rate of 20-25 per cent annually and the organised pharma retail market size has the potential to grow to US$ 9 billion by the year 2011.

The size of India's pharmacy retail market is estimated at US$ 4.5 billion, which is dominated by 12-15 big players.

Medicine retail chain Guardian Lifecare plans to double the number of its stores to 400 over the next two years with an investment of US$ 21.7 million.