LIFE SCIENCES & HEALTHCARE

• Pharmaceutical
• Bulk Drugs / Active Pharma Ingredients (API)
• Biotechnology/Biopharmaceutical,
• Research & Development (R&D)
• Life Sciences Contract Services
• Health Care /Hospitals
• Diagnostics
• Medical Equipment /Devices
• Healthcare information technology

Globally, Life sciences and health care industry is undergoing consolidation. Healthcare is a basic human need. Life-sciences & Healthcare industry comprises government and private hospitals, nursing homes, practicing doctors, diagnostic centers, medical equipment/devices manufactures & suppliers, and medicines manufacturers & suppliers, etc. The pharmaceuticals (medicines, drugs, active pharma ingredients) are the backbone of healthcare. The Indian pharma market (IPM) ranks 3rd highest in volume and 10th highest in value globally. However, the Indian Pharmaceutical industry is very fragmented. Severe competition prevails in the traditional therapeutic segments in the domestic Indian pharma market, which is also regulated by the multi-stage drug price control order (DPCO), which has been severely impacting the margins of the Pharma MNCs’ Indian subsidiaries, which are also impacted by drug launches by Indian/other companies before patent expiry. The lifestyle therapeutic segments are generally lucrative with low competition and high demand. Indian pharma companies export significantly – some focused on the generics market in the US, Europe and semi-regulated markets, some on custom manufacturing for global pharma R&D MNCs, and others on the niche area of biopharmaceuticals.

Indian life-sciences industry has been growing consistently. During 2007-12, the Indian pharma market grew at 12.5% CAGR (to ~Rs690 Bn.), and by ~ 14% in 2012-13; and  India’s pharmaceutical market size is estimated to grow from ~US$14 Bn in 2011 to US$ 25-30 Bn by 2016, mainly helped by higher consumer spending, rapid urbanization, improving healthcare insurance. The Indian generic pharma export companies have largely been doing well particularly in USA markets while gaining from the low competition launches. Pharma companies need to readjust their product portfolio with greater focus on certain chronic therapies for the life style segments which are expected to grow faster with the rising urbanization and changing lifestyle of Indian population. Indian pharma companies exporting to developed countries would do well to ensure strict compliance with GMP norms; and increase their R&D budgets and aggressively develop niche products (e.g. injectable, dermatology, respiratory, bio-generics, complex generics etc.), for growing their business and profitability in US post the patent cliff times.

KLS&A Advantage: You need a variety of highly skilled and qualified professionals to efficiently run and scale up your business, while complying with good manufacturing practices and strict regulatory requirements. You also need a capable top leadership team who fully understands the nuances of the industry on global scale, and can evolve and implement effective strategies to navigate your business through the pricing, regulatory and other challenges of domestic & International markets, and steer your companies to emerge winners, and stay ahead. Our experienced team can keep you identify, attract and hire senior human talent with the required expertise in this sector, who can fit in your organizational culture; and contribute to the success of your organization. Our team understands the fast evolving competitive landscape for the pharmaceutical and healthcare companies. In our team we have specialist resources with long experience in the sector; and we have the ability to partner and provide a high quality and timely solution for the human capital needs to a variety of life sciences companies.

(References: Various media reports, press items, and research reports including from IBEF, and EM, etc.)

[Disclaimer: This general note which has very broad, indicative & unverified information of the industry sector, has been compiled through secondary research from multiple sources; and so, is not meant to be relied on by anyone for any purpose. KLS&A is not responsible for any errors or shortcomings in the same.]

LIFE SCIENCES & HEALTHCARE SECTOR IN INDIA

Sector Overview:

Healthcare is a basic human need. Life-sciences & Healthcare industry comprises government and private hospitals, nursing homes, practicing doctors, diagnostic centers, medical equipment/devices manufactures & suppliers, and medicines manufacturers & suppliers, etc. The pharmaceuticals (medicines, drugs, active pharma ingredients) are the backbone of healthcare.  Globally, the Indian pharma market (IPM) ranks 3rd highest in volume and 10th highest in value.

However, the Indian Pharmaceutical industry is very fragmented. Out of total ~25,000 players, just ~350 are in organized sector; and the top 10 -12 companies form ~ 2/3^rd of the entire market. Besides serving ~ 2/3^rd of the India’s total demand for various formulations and active pharmaceutical ingredients (APIs), Indian pharma companies export significantly  – some focused on the generics market in the US, Europe and semi-regulated markets, some on custom manufacturing for global pharma R&D MNCs, and others on the niche area of biopharmaceuticals.

In Indian pharma industry licensing, distribution network, patents, plant approval by regulatory authority are the entry barriers. Powerful distributors wield major bargaining power. Severe competition prevails in the traditional therapeutic segments in the domestic Indian pharma market, which is also regulated by the DPCO. The lifestyle therapeutic segments are generally lucrative with low competition and high demand.

Performance:

Indian healthcare industry has been growing consistently. During 2007-12, the Indian pharma market grew at 12.5% CAGR (to ~Rs690 Bn.), and by ~ 14% in 2012-13.  The Indian generic pharma export companies have largely been doing well particularly in USA markets while gaining from the low competition launches, some have suffered from delayed approvals, etc. However, in recent years, most pharma MNCs in India have seen lower growth in sales, increasing costs, and reducing profit margins due to higher competition, and drug launches by other companies before patent expiry through compulsory licensing and patent infringements.

Challenges & Way Forward:

In the domestic market, the drug price control order (DPCO), with its multi-stage regulations – on bulk drugs, on formulations and on overall profitability, has been a major irritant for the India pharma industry. The government’s recent pricing policy covering a large number of drugs under DPCO will severely affect profitability of many pharma companies, especially the Indian subsidiaries of MNCs. Pharma companies need to readjust their product portfolio with greater focus on certain chronic therapies for the life style segments (e.g., cardiovascular, anti-cancers, anti-depressants, anti-diabetes, etc.) which are expected to grow faster with the rising urbanization and changing lifestyle of Indian population.

Indian pharma companies exporting to developed countries would do well to ensure strict compliance with GMP norms to avoid drugs recalls and strictures/blacklisting by agencies like USFDA; and also gain from larger business the governments of many developed countries seek encouraging generic drugs, so as lower their healthcare costs. Pharma exporters have to live with the additional cost by way of the user fee to USFDA for application for approval of drugs and manufacturing facilities. As, generic penetration in the US markets peaks out during the next few years, Indian pharma companies will do well to increase their R&D budgets and aggressively develop niche products (e.g. injectable, dermatology, respiratory, bio-generics, complex generics etc.), for growing their business and profitability in US post the patent cliff times.

Prospects:

As per a study, India’s pharmaceutical market size is estimated to grow from ~US$14 Bn in 2011 to US$ 25-30 Bn by 2016, mainly helped by higher consumer spending, rapid urbanization, improving healthcare insurance.

(References: Various media reports, press items, and research reports including from IBEF, and EM, etc.)

[Disclaimer: This general note which has very broad, indicative, and unverified information of the industry sector has been compiled through secondary research from multiple sources; and so, is not meant to be relied on by anyone for any purpose. KLS&A is not responsible for any errors or shortcomings in the same.]