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Profitable Pharma company: Number of factor fulling the growth


Here, we have shared some factors that contributed to the process of trade that come from appearing and developing economies. The large market for affordable generic drugs in these markets. – PowerPoint PPT presentation

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Date added: 18 September 2020
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Title: Profitable Pharma company: Number of factor fulling the growth

Growth and Challenges Faced by Franchise in
Pharma Companies
  • Till a couple of decades ago Indian pharma
    companies were fairly rare. What we had were
    mostly the global giants. Technology and exposure
    were both severely limited. A closed market not
    just stopped the inflow of information, it also
    stopped Indian companies from reaching out to
    global markets or invest in their own RD.
  • Even a decade years ago, the sector was largely
    dominated by a few names. But over the last few
    years the situation has dramatically changed.
    Franchise in pharma companies, small and medium
    industries are slowly, but steadily carving out
    their own niche.

The Numbers
  • The Indian pharmaceutical industry today accounts
    for a giant share of the global trade in the
    field. Over the last five years the compounded
    annual growth rate of the Indian pharma industry
    has been more than 15.In terms of volume, it is
    3rd in the global share and 14th in when it comes
    to value.
  • Valued at over 80,000 crore, much of this trade
    comes from emerging and developing economies and
    the large demand for affordable generic drugs in
    these markets. Fuelling much of this growth is
    the SME sector. They account for 35-40 of the
    annual production. Their share in production
    volume stands at 48 of the total export volume.
    The sector also counts as a massive employment

There Are a Number of Factors that are Fuelling
this Growth
  • Growing healthcare concerns
  • Rising disposable incomes
  • Improving infrastructure
  • New finance avenues
  • Rise in demand in emerging markets
  • High cost of generic drugs from bigger
  • Future Growth

  • Here we have both good news and bad news. While
    the growth story will continue, it will slow
    down. Experts warn that from impressive double
    digit growth it will now come down to single
    figures. The revenues posted by the top 21
    leading companies in FY2017 is 7.4. This is a
    drop from the 10.1 of the previous year.
  • The growth will stay moderate in the next few
    years, not expected to go into double digits. The
    reasons for the slowdown are multiple
  • Increasing competition within the domestic and
    international markets.
  • Drop in exports to countries like the US because
    of regulatory measures.
  • Saturation in the generic drugs market
  • But these are just growth pangs. The growth in
    pharma companies, including franchise in pharma
    companies will remain robust and healthy.
    However, this also depends on how we address the
    coming challenges with the industry.

  • Some of the factors of the slowing down in the
    pharma sector are inevitable, such as increasing
    competition and market saturation. But much more
    still needs to be done.
  • - Lack of proper regulatory framework One of the
    major slowdown for the growth of the sector is
    the significant fall of exports to more developed
    countries. Indian trade volume may be impressive,
    but the value is still fairly low and that is
    because of our inability to exploit high-value
  • For instance, from 14.4 in FY 2016 the growth in
    exports to US fell sharply just to 4 in FY 2017.
    The fourth quarter is showing negative growth.
    What accounts for this sharp decline? The reason
    lies in the poor regulatory framework in the
    domestic industry.

  • A number of Indian companies were disqualified
    because these failed to clear drug tests in the
    more regulated markets. This has severely
    impacted future trade as well. Indian authorities
    must either ask for better clarification or
    ensure that the domestic framework remains
    rigorous and in tune with stringent international
  • - Lack of RD The pharmaceutical industry
    depends on innovations and patents. But the truth
    is that Indian companies spend very little on RD
    with little interest in producing drugs. This is
    despite the high numbers of technicians and
    experts that the country has. A lack of financing
    and understanding still hampers this sector. 
  • - Lack of consolidation The industry is
    highly fragmented with little cooperation between
    the smaller players, let alone among the smaller
    and larger companies. This impacts every facet of
    the industry as they are not able to present
    their concerns in a unified manner.

  • Despite some slowdown (which should be seen as
    the inevitable plateauing of the industry), the
    future of the pharmaceutical industry looks
    healthy. All sectors, including franchise in
    pharma companies will record growth. However, we
    do need to pay attention to challenges facing the
    industry, such as the need for RD and a rigorous
    regulatory environment.

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