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India’s bulk drug exports on the increase Posted 29/04/2016

Driven by exports to both regulated and semi-regulated markets, India’s bulk drug exports are likely to grow at a compound annual growth rate (CAGR) of 12–14% up to 2018–2019, according to a recent study.

The study entitled ‘Indian Pharmaceutical Industry: Changing Dynamics & the Road Ahead’, was carried out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) jointly with Yes Bank. The study found that India’s share of regulated markets might increase to about 51% by 2018–2019, from 49% in 2013–2014 and 43% in 2008–2009. This increase is expected to be driven by Indian manufacturers’ better process chemistry skills, low manufacturing costs, higher number of drug master filings (DMFs), expected expansion of key generics markets, and cost reduction initiatives by large global companies.

Most of this growth is expected to come from generics, with exports of bulk drugs used for manufacturing off-patent drugs expected to continue to grow at a 12–14% CAGR in the next five years till 2018–2019. Demand for active pharmaceutical ingredients from on-patent drugs, on the other hand, is expected to grow at a slower pace.

The ASSOCHAM-Yes Bank joint study further noted that the domestic formulations market is likely to cross US$20 billion mark by 2018–2019, from a level of about US$11 billion in 2013–2014. Although a GlobalData study already valued the pharmaceuticals market in India at US$20 billion in 2015 and expected it to increase to US$55 billion by 2020, representing an impressive CAGR of 22.4%.

During the 2012–2017, drugs generating annual sales of about US$130 billion are expected to lose patent protection and will be exposed to generics competition. Therefore, sales of generics are expected to grow at a CAGR of 7–9% over the next five years outperforming the overall global pharmaceutical market, whose growth is expected to be limited to 3–5%.

The Indian Government is also promoting the manufacture of pharmaceuticals in the country. It announced plans to set up an Rs 500-crore venture capital fund to provide cheaper loans to firms looking to establish or upgrade manufacturing facilities [1].

Generics dominate India’s pharmaceutical market, accounting for around 70% of the market. India also supplies 20% of global generics in terms of export volume, making the country the largest provider of generics globally.

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1. GaBI Online - Generics and Biosimilars Initiative. Indian pharma industry to get government support [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2016 Apr 29]. Available from: www.gabionline.net/Generics/General/Indian-pharma-industry-to-get-government-support

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Source: ASSOCHAM, GlobalData, Yes Bank

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