Pharmaceutical Industry Cooperations Open the Door to India for Big Pharma
The increasing number of consolidations and in-licensing agreements between Multinational Corporations (MNC) and Indian companies highlights the growing significance of the country’s pharmaceutical market, states business intelligence firm GBI Research...
The latest report by GBI says that MNCs have extended a greater reach into the Indian pharmaceutical space following the introduction of product patents in 2005, 100% Foreign Direct Investment (FDI) in pharmaceuticals in 2006, and after witnessing the strong growth prospects for generics and biosimilars in the country.
Mergers and Acquisition (M&A) activity has been substantial in recent years with numerous deals taking place between 2007 and 2012, adding up to a value of around US$1 billion. Company partnerships have also been a common theme within the Indian pharmaceuticals market: approximately 400 partnerships were formed over the 2007-2012 period – the majority of which were valued at more than US $ 100 million.
Rising Income Levels Boost Asian Pharmaceutical Market
GBI Research also expects India’s pharmaceutical industry to grow as a result of rising income levels. As 80% of healthcare expenditure in India is out-of-pocket, higher average wages are expected to make health insurance more affordable, lead to more Indian citizens seeking treatment for previously neglected conditions and boost prescription compliance.
However, despite these drivers of pharmaceutical market growth, India still faces some significant obstacles in providing a high level of healthcare across the country. For example, the country’s healthcare workforce is very small compared to its large population – far smaller than more economically developed countries such as the US, Denmark and Australia, and lagging behind other emerging nations including South Africa and Brazil.
Drug Counterfeiting Becomes Major Issue in India
Additionally, drug counterfeiting has developed as a major concern within the sector and many companies are reluctant to pursue cases of counterfeit medicines due to the possibility of bad publicity and a loss of confidence among consumers.