Summer

Assignment
project

Submitted to- prof. Dr. Abhishek Kumar

On Topic- Pharmaceuticals industries in India
Assessment year- 2016

DECLARATION

I hereby declare that the project entitled Pharmaceuticals

industries in India submitted for the BBA 5th semester
project is my original work and the project has not formed the
basis for the award of any degree, associateship, fellowship or
any other similar titles. All information included from other
sources has been duly acknowledged. I aver that if any part of
the report is found to be plagiarized, I shall take full
responsibility for it.

Jayant Kumar
Place: INS Chilka
Date: 15.07.2016

PREFACE

As a part of my academic curriculum, I am required to do

summer project report on pharmaceutical industries in India at
the end of this semester. The main objective of the research is
to know what are the challenges faced by t h e o rg a n i z a t i o n
a n d h o w t h e y t a c k l e t h i s p ro b l e m .
T h e b a s i c p u r p o s e o f t h e p ro j e c t i s t o k n o w h o w t o
a n a l y z e t h e c o m p a n y s p ro d u c t, fi n d i n g p ro b l e m s
a n d t o k n o w h o w t o s o l v e t h e s e p ro b l e m s. T h i s h e l p s
u s t o m a ke ourselves more aware about the position of the
company in the market, segmentations of the products.
Through these projects, I was able have a interaction with
chemists along with staff of Finance, Marketing- sales,
Production and Logistics, Marketing communications,
Administration of Cipla pharmaceuticals in Goa.
This project has helped me a lot in
understanding the various aspect of the investment
instrument. I hope that this knowledge will prove beneficial for
me in future also.

ACKNOWLEDGEMENT
In the preparation of this project report substantial efforts have
been done and at the same time I found it pleasurable doing
the same. All the information, facts and figures that have been
shown in this report are original.
Cipla pharmaceuticals contributed in a substantial way during
some stages of the preparation of this report. Its guidance at
every stage of the project enabled me to successfully complete
this project, which otherwise would not have been possible
without its constant encouragement and motivation .
I am grateful and owe thanks to my Family and cipla
pharmaceuticals for extending time &support in for
completion of this project. I a l so ex p re s s m y t h a n k s to m y
c o l l e a g u e s who have directly and indirectly guided me
with moral support to work on the project.

INDEX
1. Declaration
2. Preface
3. Acknowledgement
4. Executive summery
5. Introduction to pharma industries
Investment in research
Firm structure
Market
6. Pharmaceutical industries in India
7. Major players in India
8. Strategies adopted
9. Swot analysis
10. Research methodology
11. Conclusion
12. Reference

Executive summery
The Indian pharmaceutical Industry has witnessed a robust
growth of around 14% since the beginning of the 11th Plan in
2007 from about Rs 71000 crores to over Rs1 lac crores in
200910 comprising some Rs62,055 crores of domestic market
and exports of over Rs 42,154 crores. This also amounts to
around 20% of total volume of global generics. However, the
Industry is quite fragmented and comprises of nearly 10,500
units with majority of them in unorganized sector. Of these,
about 300400 units are categorized as belonging to medium to
large organized sector with the top 10 manufacturers
accounting for 36.5% of the market share. As regards the Bulk
drugs component of the industry, the market is around Rs
42,000crores giving it a share of around 50% of the total
domestic market. This gives the Indian Bulk Drug industry a
share of about 9% of the global bulk drug market.
India is among the top 20 pharmaceutical exporting countries
and the exports have grown very significantly at a CAGR of
around 19% in the 11th plan period. Indian drugs are exported
to around 200 countries in the world with highly regulated
markets of USA, UK etc. The major therapeutic categories of
export are anti-infective, anti-asthmatic and anti-hypertensive.
The Department of Pharmaceuticals has a Vision for the
development of the Indian Pharmaceutical Industry. This Vision
is To make India the Largest Global Provider of Quality
Medicines at Reasonable Prices.
The Vision is to be achieved as per the following Mission:
- Develop Human Resources for Pharmaceutical Industry
and Drug Research and Development
- Promote PublicPrivate Partnership for development of
pharmaceuticals Industry
- Promote Pharma Brand India through International
Cooperation
- Promote environmentally sustainable development of
Pharmaceutical Industry

- Enable availability, accessibility and affordability of drugs

For the achievement of these Goals, it is necessary for the
Indian Pharmaceutical Industry to become globally competitive
through world class manufacturing capabilities with quality and
cost efficiency of production capacity and radical up gradation
of research and development capabilities for new drugs and
associated activities like clinical trials and contract
manufacturing. There is need to develop world class support
infrastructure both for production and research.

Introduction to the pharmaceutical industries

The modern pharmaceutical industry came of age with the introduction
of regulations demanding that new pharmaceutical products be proven
both safe and effective before they can be marketed and sold. In the
United States such legislation was introduced in 1962 with an
amendment to the Food, Drug and Cosmetics Act. Since the introduction
of the requirement that pharmaceutical products demonstrate efficacy in
order to gain approval the industry has been a major driver of advances
in health technology and spending on research and development. In
2002 the global pharmaceutical industry generated over 400 billion
dollars in revenue and invested roughly 16% of that amount, or 40 billion
dollars, into research and development for new drugs.

Investment in research
In addition to the 60 billion dollars spent on drug development by
industry, pharmaceutical companies also benefit from billions of dollars
in government spending. The United States National Institute of Health
(NIH) spent over 20 billion dollars in research and development in 2001,
a significant portion of which went to drug development. Much of the
government-funded research is directed toward basic science that
Produces understandings of disease processes that can be used as a basis
for developing new drugs. Government funding is, though, also used to
directly subsidize the cost of drug development. A 1998 Boston Globe
article reports that 45 of the 50 top-selling medicines introduced
between 1992 and 1997 received government funding for some stage of
their development.

Firm Structure

A small number of large pharmaceutical companies account for the bulk

of new drug development and pharmaceutical sales. In 1994 the top 10
firms accounted for 34% of sales. Between 1963-1999 the top four firms
accounted for almost 20% of new chemical entities (NCE) approved in
the United States and only 20 firms accounted for close to 60% of NCEs
invented world-wide. Currently, companies based in the United States
account for just under half of global drug development. The US
accounted for well over half of all internationally accepted drugs
invented between 1970 and 1992. The bulk of the remaining drug
Development activities took place in the European Union, with Japan a
distant third. Recent mergers mean that an increasingly small number of
companies control global drug development and sales.
Over the past 15 years the rapid development of biotechnology has
created a market space for smaller pharmaceutical firms, generally
pursuing the development of one drug. Large pharmaceutical companies
have had limited success innovating with this technology, possibly
because it continues to change at a rapid pace. However, the cost of
bringing a new drug to market runs into the hundreds of millions of
dollars, and because there is a significant risk that the drug will fail to
win approval, many small companies with only one drug candidate have
had difficulty finding sufficient capital to develop their
drugs. Partnerships between the large pharmaceutical companies and
small biotechnology companies allow the large pharmaceutical
companies to gain access to the latest technology and allow
biotechnology companies to finance the development of their drugs.

Markets
Global pharmaceutical sales are highly stratified by region, with North
America, the European Union and Japan accounting for 85% of global
pharmaceutical sales in 2002. The growth in pharmaceutical sales,
averaging 8% in 2002, has also been significantly higher than the rate of
inflation in most ODEC countries. The introduction of increasing
numbers of drugs that must be taken for the lifetime of the patient, along
with increased in per-capita health problems due to the aging of the

population in most developed countries, is leading to a high rate of

growth in the number of prescriptions written and rapid growth in
pharmaceutical sales. In the United States and most other developed
countries pharmaceuticals are the fastest growing component of the
health care budget. The high cost of pharmaceuticals is a significant
issue even in developed countries with significant economic resources.

Pharmaceutical industry in India

The pharmaceutical industry in India ranks 3rd in the world
terms of volume and 14th in terms of value. According to
Department of Pharmaceuticals, Ministry of Chemicals and
Fertilizers, the total turnover of India's pharmaceuticals industry
between 2008 and September 2009 was US$21.04
billion. Hyderabad, Mumbai, Bangalore and Ahmedabad are the
major pharmaceutical hubs of India. The domestic market was
worth US$13.8 billion in 2013.
The government started to encourage the growth of drug
manufacturing by Indian companies in the early 1960s, and
with the Patents Act in 1970. However, economic liberalization
in 90s by the former Prime Minister P.V. Narasimha Rao and the
then Finance Minister, Dr. Manmohan Singh enabled the
industry to become what it is today. This patent act removed
composition patents from food and drugs, and though it kept
process patents, these were shortened to a period of five to
seven years.
The lack of patent protection made the Indian market
undesirable to the multinational companies that had dominated
the market. Whilst the multinationals streamed out, Indian
companies carved a niche in both the Indian and world markets
with their expertise in reverse-engineering new processes for
manufacturing drugs at low costs. Although some of the larger
companies have taken baby steps towards drug innovation, the
industry as a whole has been following this business model
until the present.
India's biopharmaceutical industry clocked a 17 percent growth
with revenues of Rs.137 billion ($3 billion) in the 2009-10
financial year over the previous fiscal. Bio-pharma was the

biggest contributor generating 60 percent of the industry's

growth at Rs.8,829 crore, followed by bio-services at Rs.2,639
crore and bio-agri at Rs.1,936 crore.
The number of purely Indian pharma companies is fairly low.
Indian pharma industry is mainly operated as well as controlled
by dominant foreign companies having subsidiaries in India due
to availability of cheap labor in India at low cost. In 2002, over
20,000 registered drug manufacturers in India sold $9 billion
worth of formulations and bulk drugs. 85% of these
formulations were sold in India while over 60% of the bulk
drugs were exported, mostly to the United States and Russia.
Most of the players in the market are small-to-medium
enterprises; 250 of the largest companies control 70% of the
Indian market. Thanks to the 1970 Patent Act, multinationals
represent only 35% of the market, down from 70% thirty years
ago.
Most pharma companies operating in India, even the
multinationals, employ Indians almost exclusively from the
lowest ranks to high level management. Homegrown
pharmaceuticals, like many other businesses in India, are often
a mix of public and private enterprise.
In terms of the global market, India currently holds a modest 1
2% share, but it has been growing at approximately 10% per
year. India gained its foothold on the global scene with its
innovatively engineered generic drugs and active
pharmaceutical ingredients (API), and it is now seeking to
become a major player in outsourced clinical research as well
as contract manufacturing and research. There are 74 US FDAapproved manufacturing facilities in India, more than in any
other country outside the U.S, and in 2005, almost 20% of all
Abbreviated New Drug Applications (ANDA) to the FDA are
expected to be filed by Indian companies. Growth in other
fields, not with standing generics are still a large part of the
picture. London research company Global Insight estimates that
Indias share of the global generics market will have risen from
4% to 33% by 2007. The Indian pharmaceutical industry has
become the third largest producer in the world and is poised to
grow into an industry of $20 billion in 2015 from the current
turnover of $12 billion.

Exports

Exports of pharmaceuticals products from India increased from

US$6.23 billion in 2006-07 to US$8.7 billion in 2008-09 a
combined annual growth rate of 21.25%.[2] Some of the major
pharmaceutical firms include Sun Pharmaceutical, Cadila
Healthcare and Piramal Enterprises.[2]
India exported $11.7 billion worth of pharmaceuticals in 2015.
The 10 countries below imported 56.5% of that total:

Rank

Country

Value(USD)

Share

United States

$3.8 billion

32.9%

South Africa

$461.1 million

3.9%

Russia

$447.9 million

3.8%

United Kingdom

$444.9 million

3.8%

Nigeria

$385.4 million

3.3%

Kenya

$233.9 million

2%

Tanzania

$225.2 million

1.9%

Brazil

$212.7 million

1.8%

Australia

$182.1 million

1.6%

10

Germany

$178.8 million

1.5%

Sales, marketing, and business

Multinational Pharmaceutical Companies ranked as per active presence of sales,

marketing and business in India-

1. Pfizer

1. Bristol-Myers S

2. GlaxoSmithKline

2. Wyeth

3. Sanofi Aventis

3. Eli Lilly

4. Merck

4. Schering-Plou

5. Johnson and Johnson

5. Abbott

6. Amgen

6. Takeda

7. Novartis

7. Boehringer Ing

8. Roche

8. Astellas

Publicly traded pharmaceuticals

Top 10 Publicly Listed pharmaceutical companies in India by Market
Capitalization as of July 2015
Rank

Company

Market Capitalization 2015(INR crores)

Sun Pharmaceutical
Lupin Ltd
Dr. Reddy's Laboratories
Cipla
Aurobindo Pharma
Cadila Healthcare
Glenmark
Pharmaceuticals
GlaxoSmithKline
Pharmaceuticals Ltd
Divis Laboratories

2,17,636

2
3
4
5
6
7
8
9

84,193
63,779
52,081
42,454
38,677
29,047
28,587
24,847

10

Torrent Pharmaceuticals

22,320

The Indian Pharmaceuticals Industry has undergone a massive

makeover from a regime of process patents in the seventies
to a more modern and WTO compatible regime under the TRIPs
agreement in 2005. It is among the top science based
industries in India with wide ranging capabilities in field of drug
manufacture and technology ensuring quality and
diversification.
The Indian pharmaceutical industry is fragmented with more
than 10,000 manufacturers in the organised and unorganised
segments. Pharmaceutical manufacturing units are largely
concentrated in states of Maharashtra, Gujarat and Andhra
Pradesh. These states account for about 45% of the total
number of pharmaceutical manufacturing units in India.
According to the Confederation of Indian Industries (CII), there
are around 8,000 small and medium enterprises (SME) units,
accounting for about 70% of the total number of the
pharmaceutical units in India. Indian SMEs are also opening up
for emerging opportunities in the pharmaceutical industry in
the field of CRAMS, clinical research etc. These would drive
them to play a definitive role in the transitional global
pharmaceutical environment, where a sizeable number of drugs
are expected to go off patent in the coming years. The Indian
government has been making every attempt to support SMEs
through several incentives. One such effort is the development
of SME clusters in various parts of the country.
The products manufactured by the Indian pharmaceutical
industry can be broadly classified into bulk drugs (active
pharmaceutical ingredients - API) and formulations. Of the total
number of pharmaceutical manufacturers, about 77% produce
formulations, while the remaining 23% manufacture bulk
drugs6 . Bulk drug is an active constituent with medicinal
properties, which acts as basic raw material for formulations.
Formulations are specific dosage forms of a bulk drug or a
combination of bulk drugs. Drugs are sold as syrups, injections,

tablets and capsules. Formulations can be categorised under

various therapeutic groups:
Chronic therapy segment
o Cardio vascular
o Neurology
o Anti-diabetes
o Oncology
Acute therapy segment
o Anti-infective
o Gastro-intestinal
o Respiratory
o Analgesics/Pain management
o Vitamins/Neutraceuticals
Based on the pharmaceutical customer base, the Indian API
manufacturing segment can be divided into two sectors
innovative or branded and generic or unbranded. In 2009, the
global generic drug market was estimated to be US$ 84 billion,
of which the US accounted for 42%.

Structure of pharmaceuticals in India

Market Segment
Brand Generic
Any non -patented molecule with a brand name other than the innovators
name is called as brand generic
Generic Generics
Market share is very low- lack of proper regulation and guideline and doctors
comfort
Government of india generic generics program 'Jan Aushadi'
Over the counter product
Drugs legally allowed to be sold 'over the counter' by pharmasist, i.e without
the prescreption of a resistered medical practitioner
All the drugs not included in the list of' Prescription-only drugs' are considered
to be OTC drugs
Patented product
Market share is very low
MNCs not willing to intriduce patented products(IPR not providing adequate
protection in the past and presence of inexpensive generic produce)

Revenue share of Indian pharmaceuticals(2015)

Generics

OTC medicines

Patented Drugs

9%
21%

70%

The global API market can broadly be divided into regulated

and semi regulated markets. The semi regulated markets like
India offer low entry barriers in terms of regulatory
requirements and intellectual property rights. The highly
regulated markets, like the United States and Europe, have high
entry barriers in terms of intellectual property rights and
regulatory requirements, including facility approvals. As a
result, there is a premium for quality and regulatory compliance
along with relatively greater stability for both volumes and
prices. The regulatory process by which API manufacturers
generally register their products for commercial sale in the U.S.
and other similarly regulated countries is via the filing of a Drug
Master File (DMF). DMFs are confidential documents containing
information on the manufacturing facility and processes used in
the manufacture, characterization, quality control, packaging
and storage of an API. The DMF is reviewed for completeness
by the FDA, or other similar regulatory agencies in other
countries, in conjunction with applications filed by finished

dosage formulation manufacturers, requesting approval to use

the given API in the production of their drug products. For
European markets, companies need to submit a European Drug
Master File (EDMF) and, where applicable, obtain a certificate of
suitability (COS) from the European Directorate for the Quality
of Medicines.
The growth in the Indian industry is mainly driven by Contract
Manufacturing, and latest estimates show that India has
submitted the most Drug Master Files
(DMF). The merchant API industry in India has traditionally
catered to the domestic as well as export markets with their
supply largely restricted to manufacturers of generic drugs.
This is because sourcing of APIs for patented drugs is
maintained in house by majority of the innovator companies in
order to maintain greater flexibility and quality control. As the
patented drugs near the end of their exclusivity, innovator
companies gradually begin outsourcing of APIs in order to
achieve greater cost efficiencies in light of the consequent
entry of generics.
In recent years, many of the large domestic pharmaceutical
companies such as Lupin Limited (Lupin) and Dr. Reddys
Laboratories (DRL) have increased backward integration into
bulk drugs especially for some of their key product segments in
order to maintain control over quality and costs. Furthermore,
with many of the domestic pharmaceutical companies present
in the highly competitive US generic formulation market, the
requirement for in-house API supply is gaining prominence.

Major players in India

India is the world's third largest pharmaceutical industry in
terms of volume and world's 13th largest pharmaceutical
industry by value. The top 8 to 10 companies including Sun
Pharma, Lupin, Dr. Reddys Labs and Cipla occupy 70 to 80
percent of the Indian pharmaceutical market space. It is
estimated
by a Fitch Group company named India Rating that the Indian
pharmaceutical industry will grow at a rate of 20 percent during
2015-2020. The domestic market is expected to do better this
time as the projected growth rate is 10-12 percent during 201516 as compared to 9 percent in 2014-15.

List of Top five Pharmaceutical Companies in India

1. Sun Pharmaceutical
Sun Pharma, officially known as Sun Pharmaceutical
Industries Limited, was founded in 1983 by Dilip Shanghvi.
The company is headquartered in India's financial capital
Mumbai, Maharashtra. Active Pharmaceuticals Ingredients
(APIs) and formulations are known to be Sun Pharma's
specialised areas. It targets a wide spectrum of chronic
and acute treatments. Its therapeutic segments of over
3000 high quality molecules include psychiatry, antiinfectives, neurology, cardiology, orthopaedic,
diabetology, gastroenterology, ophthalmology,
nephrology, urology, dermatology, gynaecology,
respiratory, oncology, dental and nutritionals. On 15 June
2015, Sun Pharma was India's largest pharmaceutical
company with the market capitalisation valued at Rs.

2,01,706.41 crore. Its products and services may be

categorised as below:
Formulations
Active Pharmaceutical Ingredients (APIs)
Over-The-Counter (OTC)
Antiretrovirals (ARVs)

2. Lupin
Headquartered in Mumbai, Lupin Limited is a multinational
pharmaceutical company. An associate professor at BITSPilani in Rajasthan, Dr. Desh Bandhu Gupta established
Lupin in 1968, which is today one of India's leading
pharmaceutical companies. In Pune, Maharashtra, Lupin
has a state-of the-art research and development unit. It is
one of the fastest growing companies as far as oncology,
cardiology, gastroenterology, central nervous system,
anti-infective, anti-asthma and diabetology therapies are
concerned. Lupin's market capitalisation amounted to Rs.
77,115.19 crore on 15 June 2015. Its products and services
may be categorised as below:
Branded Formulations
Advanced Drug Delivery Systems
Generics
Novel Drug Discovery
Biotechnology
3. Dr. Reddy's Labs
Based in Hyderabad, Telangana, Dr. Reddy's Laboratories
is a multinational pharmaceutical entity. It was founded in
1984 as a manufacturer of APIs. A vast range of
pharmaceutical products are offered by Dr. Reddy's Labs.
It has 60 APIs and 190 medications to treat various kinds
of ailments. It is now India's third largest pharmaceutical
company in terms of market capitalisation, which was

valued at Rs. 56,638.13 crore on 15 June 2015. Its

products and services may be categorised as below:
Generic Formulations
Active Ingredients
Pharmaceutical Services
Biosimilars
Propriety Products

4. Cipla
Dr. K. A. Hamied set up Cipla Limited in 1935, which is one
of the biggest biotechnology and pharmaceutical
multinational companies of India today. APIs and
formulations are produced at 34 state-of the-art Cipla
plants spread across the country. Primarily, medicines for
treatments of ailments like depression, obesity,
cardiovascular diseases, arthritis and diabetes are
developed by Cipla. It is India's fourth largest
pharmaceutical company accounting for a market
capitalisation worth Rs. 47,025.38 crore on 15 June 2015.
Its products and services may be categorised as below:
APIs
Formulations
Veterinary
5. Aurobindo Pharma
Aurobindo Pharma was founded by K. Nityananda Reddy and
P.V. Ramaprasad Reddy with others in 1986. Headquartered in
Hyderabad, Telangana, Aurobindo Pharma Limited
manufactures APIs and generic pharmaceuticals. Six prime
therapeutic areas of medication addressed by the company are
anti-allergic, gastroenterology, antiretrovirals , antibiotics,
central nervous system and cardiology. With the market

capitalisation valued at Rs. 37,281.76 crore on 15 June 2015,

Aurobindo Pharma Limited is India's fifth largest
pharmaceutical company. Its products and services may be
categorised as below:
Formulations
APIs

Total sales of Indian pharmaceutical industries (2015)

Strategic tools adopted

Marketing Mix (4Ps) of Pharmaceutical Product
Marketing is an essential function in any business without which
the surviving of business is critical. As the marketing theorist
Theodore Levitt observes, There can be no effective corporate
strategy that is not marketing oriented, that does not in
the end follow this unyielding prescription: The purpose of
business is to create and keep customer. However, Levitt
should also add that businesses must also develop products
and services that customers want and at prices they are willing
to pay. Marketing broadly conceived includes, then, making
decisions about what products or services to put on the market,
who are the potential customers for these goods, how to reach
the target markets and induce them to buy, how to price the
product or service to make is attractive to these customers,
and how to deliver the goods physically to the ultimate
consumers. These matters are often expressed as the four Ps of
marketing: Product, Price, Promotion and Place. Let us describe
these 4Ps comprehensively relating to Indian Pharmaceutical
Industry.
1. Product
The Organisation Of Pharmaceutical Producers Of India (OPPI),
established in 1965, is a premier organisation of
pharmaceutical manufactures consists of companies with
international collaboration and large Indian companies, defines
for the purposes of the Code of Pharmaceutical Marketing
Practices: pharmaceutical product means all
pharmaceutical or biological products (irrespective of patent
status and/or whether they are branded or not) which are
intended to be used on the prescription of, or under the

Supervision of, a healthcare professional, and which are

intended for use in the diagnosis, treatment or prevention of
disease in humans, or to affect the structure or any function of
the human body.
General Marketing point of view also carries Offer as a Product.
Here we talk about the need category of the consumers, types
of products, their development, testing, packaging, levelling
and branding etc and related things which are the topics
of concern to offer anything, any drug in market.
In India, the import, manufacture, distribution and sale of
drugs and cosmetics are regulated by the Drugs and
Cosmetics Act (DCA) and its subordinate legislation, the
Drugs and Cosmetics Rules 1945 (DCR) and Drugs and Magic
Remedies Act, 1954.
1.1 Classification of Pharmaceutical Drugs in India
Prescription Drugs- Prescription drugs are drugs
that are not locally available without a physician's
prescription. A prescription drug is a licensed
medicine which is obtained only by prescription.
The prescription drugs are regulated by legislation.
In India, "Rx" is often used as a short form for
prescription drug. In European countries, any kind
of prescription drug has a monograph or Patient
Information Leaflet (PIL) that gives detailed
information about the drug. Prescription-only drugs
are those medicines that are listed in Schedules H
and X appended to the Drug and Cosmetics Act &
its Rules. Supervision. Drugs falling in these 3
schedules are currently not advertised to the public
under a voluntary commitment by the
pharmaceutical industry.
Non - Prescription Drugs: These are medicines
which can be bought at a pharmacy without the
prescription of a doctor. These are also known as
Over-the-counter (OTC) medicines. OTC drugs
means drugs legally allowed to be sold over the
counter. In India though the phrase has no legal
recognition, all the drugs that are not included in

the list of prescription so they are included in nonprescription drugs or OTC drugs.
1.2

Production of Pharmaceutical products in India

Clinical trials are the core of research-based pharmaceutical

industry. No new drug can come into the market without clinical
trials. Global clinical trials are relatively new to India. No
wonder there are several misconceptions on the subject. The
companies conducting research need to proactively publicize
their commitment to protecting the rights, safety and well
being of trial participants. The development of new therapies to
treat disease and improve quality of life is a long and complex
process. A critical part of that process is the conduct of clinical
trials. Clinical trials may involve already marketed product(s)
and/or
Investigational products. A clinical trial is defined in the
International Conference on Harmonization Guideline for
Good Clinical Practice [ICH-GCP E6 (R1)] as any
investigation in human subjects intended to discover or verify
the clinical, pharmacological and/or other pharmacodynamic
effects of an investigational product(s), and/or to identify any
adverse reactions to an investigational product(s), and/or
to study absorption, distribution, metabolism, and excretion of
an investigational product(s) with the object of
ascertaining its safety and/or efficacy. Clinical trials (Phase 1 to
Phase 4) involve both potential benefits and risks to the
participants and are conducted with the primary aim of bringing
to patients new medicines with a favourable benefitrisk ratio.
Clinical trials are conducted to answer specific questions and
some aspects of the therapeutic profile (benefits and risks)
of the product(s) tested may not be fully known without
study in humans. In August 2009 OPPI has published the OPPI
Code of Clinical Trials which guides the producers and
practiceners of Pharmaceuticals products about how and what
precautions should be taken care of in developing new drugs.
1.3 Branding, packaging and Labelling of pharma products in India
In most developed countries, the regulatory agencies have
established comprehensive guidelines and rules for the content
and format of labelling. For example in the United States these

are set in the Code of Federal Regulations under Title 21

concerning the Food and Drug Act. 21 CFR 201.56 defines the
major topical sections to be included as:
Description
Clinical pharmacology
Indication and uses
Contradiction
Warnings
Precautions
Adverse reaction
Drugs abuse and dependence
Over dose
Dosages and administration
Method of supply

pharmacology

Indications
usage
Warnings
Adverse

Precautions
dependence

Overdosage
reactions
Dosage
and

administration
Method
ofand
supply

In India the rules specify the indication of the proper

name of the drug in a more conspicuous manner than the
brand name, correct statement of the net contents, details of
active ingredients, address and name of the manufacturer,
distinctive batch number, manufacturing license number,
expiry particulars, information related to storage or manner of
use and general information like physician's sample, not for
sale.
Recommended label wording can offer advice about:
Timing of doses in relation to food
Completing the course of treatment
What to do if a dose is missed
The correct storage of a medicine
Limits to the number of tablets that should be taken in
a given time
Warnings:
May cause drowsiness
Avoid alcoholic drink
Follow the printed instructions you have been given
With this medicine
Causes drowsiness which may continue the next day

2. Price
India is recognised lowest priced drug manufacturer and
marketer of pharmaceuticals products domestically and
internationally. One reason for lower value share is the lower
cost of drugs in India ranging from 5% to 50% less as compared
to most other countries. A comparison of prices of some of the
formulation packs in India vice-versa other countries depicts
this clearly.

Drugs

Ciprofloxa
cin HCL
500 mg
10s tabs

mg
tabs
10s
Times
Costlier
Diclofenac
Sodium
50 mg
10s tabs
Times
Costlier
Ranitidine

India

Sri
Lanka

Zimbabw
e

U.K.

USA

US$

0.81

1.16

1.5

11.4

37.88

Rupee
s

39

55.68

72

547.2

1818.2
4

1.4

1.8

14.0

46.6

US$

0.19

1.38

1.2

1.32

20.21

Rupee
s

66.24

57.36

63.24

970.08

7.4

6.4

7.0

107.8

0.12

0.84

1.1

5.9

15.34

5.98

40.32

52.8

283.2

736.32

6.7

8.8

47.4

123.1

1.85

2.1

11

19.67

US$

150 mg
Rupee
10s
s
Times
Costlier
Omeprazo US$
le

1.67

40 mg
10s tabs

Rupee
s

Times
Costlier

80

88.8

100.8

528

944.16

1.1

1.3

6.6

11.8

Under the National Pharmaceutical Policy 2006, the government

intended to:
- Strategies to increase access to anti-cancer and antiHIV drugs,
- Rationalise the Excise Duty schemes in order to
promote access to drugs for the poor
- Set up a Drugs Price Monitoring Awareness and
Accessibility Fund
Create a pharma advisory Forum Increase the
range of price
Control.

office infrastructure,
Development
Focus
on Research &

3. Promotion
The world health organization defines drugs promotion
including all information and persuasive activities by
manufacturers and distributors, the effect of which induce
the prescription, supply and/or use medicinal drugs.
The main aim of promotion is not to inform but to
persuade. Consumer good advertisement rarely conveys
much information about the features of the products.
Instead the emphasis of much advertisement is on
associating consumption of the product with positive
feelings

The table below provides an overview of the key

promotion methods used to target doctors:

Type

Examples

Pharmaceutical

Brochure, Sponsored articles,

orInternet
Brochures
textbooks
articles

journals
subscription

Advertisements
Personal Selling

Trade promotion

Sponsorship

Internet, Sponsored journals

subscription or textbooks.
Visits by medical
representative, Sponsored
events with key opinion
leaders in the field.
Gifts, Gimmicks and incentive
schemes based on number of
prescriptions, Product
samples
Academic activities:
Exhibition booth, Registration
fee, Tutoring sessions, Journal
club, Free textbooks and
journal subscription
Non-academic activities:
Entertainment, Excursion,
Travelling expense, Meals,
Family-related activities

Symposiums
booths
fees
Registration
sessions
clubs
textbooks
subscriptions
and
journal

Health professionals are targeted by companies mainly via

medical representatives and advertisements placed in
medical journals or brochures that are sent directly to the
doctors. The main conduits of promotion in India are:
advertising, detailing (visits from sales representatives), direct
mail, sales promotion, publicity and public relations. Among
them, detailing dominates most along with the given
promotional methods in table above.
The aim of drug promotion is to persuade people to buy more
drugs and/or to pay higher prices. This is done by increasing
the perceived value of the drug via one or more of several
approaches including:
Increasing the perceived frequency and/or severity of
the indications.
Widening the indications to include more people.
Increasing the perceived likelihood and magnitude of
benefits.
Decreasing the perceived likelihood and magnitude of
harms.

 Increasing the use of the drug for longer durations.

The following OTC medicines advertising can also be seen on

TV in India:

Digestives
Antacids
Antiflatulent
Cold rubs and analgesic balms/creams
Cough liquids etc.

Currently, there is no specific law which prohibits the

advertising of prescription drugs although industry practice is
not to advertise prescription-only drugs. The DCGIs office is
considering coming out with a notification prohibiting the
advertising of any drug which legally requires a doctors
prescription for its supply.
4. Place:
Industry, market and customer trends are creating both
challenges and opportunities for increasing business and
profitability and for making more and more profits in
competitive and trendy pharmaceutical industry, companies are
deploying a plethora of marketing and distribution strategies to
target the different customer segments. The downstream
Supply Chain of pharmaceutical products is unique. Not only in
India but over the globe medicines and healthcare facilities are
generally distributed and sold by the non-user customers of the
drugs and pharmaceutical products, reputedly known in society
as Doctor/s. This is doctor/s mostly who prescribe the
pharmaceutical product/s to the real-user customer poorly
known in society as Patient (ill person) or friends/ relatives of
the patient. In the pharmaceutical and healthcare industries, a
complex web of decision-makers determines the nature of the
transaction (prescription) for which direct customer of
pharmaceutical industry (doctor) is responsible. Essentially, the
end-user (patient) consumes a product and pays the cost.

Which drug to transact, from where to transact, in what

quantity to buy etc? All are directed by the doctor which is
consumed by the patient and pays the cost. Doctors plays the
direct role in transaction of drugs through prescriptions so are
the Direct customers of the pharmaceutical companies while
patients play indirectly although they pay the price
essentially, are indirect customers of the pharmaceutical
companies. Pharmaceutical companies use the sales force of
Medical Representatives (sophisticated designed in hierarchy)
for marketing products to doctors and to exert some influence
over others in the hierarchy of decision makers (for
procurement, buying, prescribing) has been a time-tested
tradition. It is also a fact that Indian consumers confidently selftreat a wide range of common ailments such as cough, cold,
fever, pain & sprains, heartburn, indigestion and diarrhoea.
With a strong heritage of Ayurveda and alternative
medicines, the usage of home remedies is quite high in
Indian households. In fact, more than 30% of the time Indian
consumers use home remedies. When suffering from an
ailment, consumer behaviour is as follows:

Go to the pharmacist: 45%

Go to the doctor: 24%
Self-medication: 23%
Do nothing: 9%

Generally
where
drugs
two can
typesbe
of bought
diseases,
easily.
Chronic and Acute, ask the
pharmaceutical players to adopt different types of model of
supply chain or distribution for the sales of the products. While
most of the top Indian companies have focused on antibiotics
and antiinfective (acute), many companies operate in niche
formulations (chronic) segments such as psychiatry,
cardiovascular, gastroentology and neurology. The level of
competition in very high in Acute segment on day to day basis
however the degree of competition in not as much as high in
Chronic therapy area on day to day basis. As doctor has to
prescribe drug for a long time in chronic cases and patient is
suppose to consume it without any change of brand. While in
acute cases doctor is changing brands on day to day
basis. Pharmaceuticals companies generally exercise two
models of distributions to market their products based on two
greatly known Push and Pull strategies of Marketing for
distribution and promotion.

For temperature sensitive Pharmaceutical product OPPI defines

as those medicines are cold chain medicines that require
special temperature-controlled cold storage to maintain their
quality and efficacy. There are two commonly recommended
temperatures specified on the labels of cold chain products:
1. Products requiring temperatures of between 2C and 8C
2. Products requiring temperatures of around (-10C) and (20C)

A cold chain is a temperature-controlled supply chain. It is used

help extend and ensure the shelf life of products such as fresh
agricultural produce, processed foods, photographic film,
chemicals and pharmaceutical drugs. A cold chain for
pharmaceutical products is an uninterrupted series of storage
and distribution activities that maintains products at a
required temperature range of 2C and 8C or between - 10C
and -20C as per their requirements. Cold chain management
in pharmaceuticals is important to ensure that the right quality
is maintained during storage and transportation, and also
to meet the regulatory commitments. Regulatory guidelines
and standards around the world focus on the right storage and
transportation, and adhering to these standards is important.

SWOT ANALYSIS OF INDIAN PHARMACEUTICAL

INDUSTRY
The SWOT analysis of the industry reveals the position of the
Indian pharmaceutical industry in respect to its internal and
external environment.

Strength:
Higher GDP growth leading to increased disposable
income in the hands of general public and their positive
attitude towards spending in healthcare.
Low cost, highly skilled set of English speaking labour
force and proven track record in design of high technology
manufacturing devices.
Growing treatment nave patient population.
Low cost of innovation, manufacturing and operations.

Weakness:
Stringent pricing regulations affecting the profitability of
pharma companies.
Poor all-round infrastructure is a major challenge.
Presence of more unorganised players versus the
organised ones, resulting in an increasingly competitive
environment, characterised by stiff price competition.
Poor health insurance coverage.

Opportunity:
Global demand for generics rising.

Rapid OTC and generic market growth.

Increased penetration in the non - metro markets.
Large demand for quality diagnostic services.
Significant investment from MNCs.
Public-Private Partnerships for strengthening
Infrastructure.
Opening of the health insurance sector and increase in per
capita income - the growth drivers for the pharmaceutical
industry.
India, a potentially preferred global outsourcing hub for
pharmaceutical products due to low cost of skilled labour.

Threats:
Wage inflation.
Government expanding the umbrella of the Drugs Price
Control Order (DPCO).
Other low-cost countries such as China and Israel affecting
outsourcing demand for Indian pharmaceutical products
Entry of foreign players (well-equipped technology-based
products) into the Indian market.

Research methodology
Research design:
Descriptive method is the research method used because
descriptive method embraces a large portion of marketing
research. The purpose is to provide accurate snapshot of the
marketing environment. Descriptive method design is a
scientific method which involves observation and describing the
behaviour of a subject without influencing it in any ways.
Descriptive design method is a valid method for researching
specific subject and as a precursor for more quantitative
studies. While there are some valid concerns about the
statistical validity, as long as limitations are understood. This
type of studies are in valuable scientific tools.
Tools of data collection
There are many methods of data collection which can be used
according to the nature and type of research. I have used
following tools for research purpose
o Articles
o Fact sheets
o Management general
o Annual report
o Research paper
o Internet
o News paper

Tools for data analysis

Graphs and charts.

Major findings and results
The Indian pharma industry is on a good growth path and is
likely to be in the top 10 global markets in value term by 2020,
according to the PwC CII report titled India Pharma Inc:
Gearing up for the next level of growth.

High burden of disease, good economic growth leading to

higher disposable incomes, improvements in healthcare
infrastructure and improved healthcare financing are driving
growth in the domestic market, the report highlighted.
The Indian pharma industry has been growing at a
compounded annual growth rate (CAGR) of more than 15%
over the last five years and has significant growth
opportunities. However, for the industry to sustain this robust
growth rate till 2020, companies will have to rethink their
business strategy. They will have to adopt new business
models and think of innovative ideas to service their evolving
customers faster and better.
Sujay Shetty, leader, pharma life sciences, PwC India, said,
The industry has seen many regulatory interventions over the
last one year, which will require careful consideration by
Pharma companies as they plan their future strategies. Pharma
companies will continue to grow both organically and
inorganically through alliances and partnerships. They will
continue to focus on improving operational efficiency and
productivity. Developments in the health insurance, medical
technology and mobile telephony can help the growth of the
pharma industry by removing financial and physical barriers to
healthcare access in India, he added.

Conclusion
The Indian pharmaceutical market size is expected to grow to
US$ 100 billion by 2025, driven by increasing consumer
spending, rapid urbanisation, and raising healthcare insurance
among others.
Going forward, better growth in domestic sales would also
depend on the ability of companies to align their product
portfolio towards chronic therapies for diseases such as such as
cardiovascular, anti-diabetes, anti-depressants and anti-cancers
that are on the rise.
The Indian government has taken many steps to reduce costs
and bring down healthcare expenses. Speedy introduction of
generic drugs into the market has remained in focus and is
expected to benefit the Indian pharmaceutical companies. In
addition, the thrust on rural health programmes, lifesaving
drugs and preventive vaccines also augurs well for the
pharmaceutical companies. The domestic formulations and bulk
drugs markets are currently facing price pressure as benefits of
cheaper drugs have been shifted to end-users and trade
channels. Hence, consolidation, partnership and alliances are
expected to gather momentum in the near future. Off patenting
of branded drugs would increase demand for generic drugs.

This provides immense opportunities to the Indian

pharmaceutical companies especially given their prior
experience in generic drug development. Some other factors
such as high penetration in the global markets and increase of
share in Abbreviated New Drug Application (ANDA) filings are
likely to power growth of the formulations market. Major growth
drivers for the Indian bulk drug industry include rise in demand
for contract manufacturing, increase of share in Drug Master
Files (DMF) filings and process innovation. (Exchange Rate
Used: INR 1 = US$ 0.0147).

toGo
thetopharmacist:
24%
45%

the doctor:
DoGo
nothing:
9%.
prescription for its supply.
References
1.
2.
3.
4.
5.
6.
7.

http://www.pharmaceuticals.gov.in
http://www.pharmatext.org
www.rxlist.com
http://rxmed.com
www.pdr.net
www.newdruginfo.org
http://fmcbiopolymer.com/pharmaceuticals/products/tabid/2913
/default.axpx
8. http://indianresearchjournals.com
9. http://www.druginfosys.com
10.
www.drugs.com

May cause drowsiness