Pharma sector set to zoom
The domestic pharmaceuticals market is poised to accelerate growth to 13.6 per cent from this year to reach a market size of $ 9.5 billion by 2010 from the current $ 5.7 billion, reports Gaurav Choudhury.india Updated: Nov 26, 2006 16:13 IST
The domestic pharmaceuticals market, which consistently grew at a 9.5 per cent compounded annual growth rate (CAGR) in the past five years, is poised to accelerate growth to 13.6 per cent from this year to reach a market size of $ 9.5 billion by 2010 from the current $ 5.7 billion, an industry research forecast said on Sunday.
The study paper jointly brought out by the Associated Chambers of Commerce and Industry (ASSOCHAM) and research firm Cygnus said that higher growth would be driven largely by new launches.
This is also borne out by the fact that the number of applicants from India queueing up to get approval for drug master files (DMF) from the US Food and Drug Administration (USFDA) continues to remain the largest amongst all countries, accounting for about 39 per cent of total filings so far this year.
Between 2000 to 2005, the domestic pharma industry grew at a CAGR of about 9.5 per cent and touched an annual size of $ 5.13 billion by March 2005.
However, in the year to March 2006, the growth rate jumped to 11 per cent to take the market size to $ 5.7 billion, the paper said. It forecast the growth rate to hover around 13.6 per cent between 2006 and 2010 to take the domestic pharma market size to $ 9.48 billion by 2010.
A Citigroup Global Markets report on the Indian pharma industry said recently that second-line and third-line generic companies have invested heavily in capital expenditure over the past few years, stepped up abbreviated new drug applications (ANDA) and DMF filings and have been able to get manufacturing facilities approved by the US FDA.
While some of them have invested heavily in their own filings, several others have entered into partnerships with larger generic companies, both global and Indian, for distribution in target markets.
DMFs are generic dossiers filed with the FDA detailing confidential information about manufacturing, processing and storing of drugs. A DMF contains information about what is usually referred to as the active pharmaceutical ingredient (API) and other core ingredients of a drug.
DMFs are also meant to support abbreviated new drug applications (ANDA). An ANDA approval is required to register generic versions of patented drugs.
The Assocham-Cygnus paper said that foreign direct investment (FDI) in the pharmaceutical industry was $ 172 million during 2005-06, and FDI grew at a compounded 62.6 per cent rate in the past four years.
According to industry estimates, the contract research and manufacturing (CRAMS) market in India was valued at $ 532 million in 2005, of which contract manufacturing accounted for 84 per cent, while the remaining 16 per cent was accounted for by contract research excluding clinical trials.
Both the segments of CRAMS have registered a robust growth of over 40 per cent in 2005 over the previous year.