Local pressure shores up drug firms
Findings of a report suggest India is set to become the fifth largest pharmaceutical market in the world by 2020, reports Suprotip Ghosh.business Updated: Sep 09, 2007 22:39 IST
There is good news for investors with holdings in Indian pharmaceutical companies that have a strong India focus, rather than with those that are heavily dependent on the US or European markets.
India is set to become the fifth largest pharmaceutical market in the world by 2020, and companies that already derive more than seventy per cent of their revenues from the domestic market are the ones who stand to gain the most, according to the findings of a report by global investment banking firm Goldman Sachs.
Sun Pharmaceuticals (Sun) and Nicholas Piramal (NPIL) are two companies best positioned to leverage the huge opportunity in India, the report said. It mentions Glenmark and Lupin as among the safest bets for your money. The report said: "We believe India will be the fifth largest drug market in the world by 2020, with sales of $43 billion (Rs 4,87,512 crore)… We expect this growth to be driven by rapid urbanization and chronic 'lifestyle' diseases accounting for about half of drug sales in 2020."
According to a Mumbai-based analyst, Nicholas Piramal and Sun Pharma have been shoring up their operations in the domestic market.
NPIL's sales force has increased from 1,400 to 3,300, while its portfolio has expanded across 9 therapies. Glenmark follows close, with a very large sales force of 1,900 reps preparing to market a robust pipeline of drugs in India once they are approved for the market.
Swati Piramal, director, NPIL, says: "The focus on the Indian market is crucial since the cost of discovery of new medicines is lower in India. The cost benefit can be passed on to Indian patients if there is a marketing setup in place."