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Pharmaceutical Industry Development In India

By Expert Author: Laxmi Upasna

India is ranked third in the Pharmaceutical industry sector in the world in terms of volume. India’s turnover in the pharmaceutical industry was estimated up to US$21.04 billion in the year 2008-2009. As per the brand equity foundation the pharmaceutical industry is expected a growth of 15-20% upto 2016 and India could be one of the top 10 global pharmaceuticals market with value reaching sales more than US$45 billion. Pharmaceutical company In India has carved a niche in both the Indian and world markets with their expertise in reverse-engineering to manufacture 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.
There are not many purely Indian based companies present in India. There are many foreign companies who have subsidiaries in India. This has been used extensively high due to the cheap labor present in India. Almost all the companies in India hire Indians be it any level of designation. For years it has been observed that Indian firms have made their ways in to the global market by extensive research and to patented drugs and following up with litigation to challenge the patent. This kind of approach has been untouched by the new patent regime and looks to increase in the future. Although the initial investment is not affordable, companies are lured by the promise of huge profit margins. Local companies have slowly started investing money into their research and development processes to tap new opportunities like this.

Supply chain in India is highly segregated with more than 550,000 retail pharmacies in the country. According to a report by bio plan Associates, though the number of pharmaceutical distributors in India have increased by 4 fold in the last three decades, from 125,000 in 1978, the volume of prescriptions distributed have not increased proportionally. Hence it is evident that though there is a growth in the number of distributors and retail pharmacies, distribution is not very efficient. Also the rural markets remain highly untapped.


There is a huge chain of retail chemists and pharma distributors/stockist in the All India Organization of Chemists & Druggists (AIOCD). Stockist plays a very important role in the pharma distribution in India. Companies cannot bypass stockists and sell directly to institutions or retail chains. They may face a ban from the stockists and considering the substitutes available for each molecule, companies cannot take the risk of losing the sales. Pharmaceutical manufacturing company is just like other companies, where they manufacture and sell to distributors or retailers for profit. Since the drug business is not like others, the pharma companies go through very dicey situations generally. Drug discovery and manufacturing is not an easy task. It requires a lot of expensive and extensive research and development where manufacturers require par expertise. Also, before a certain drug is marketed it has to be approved by the authorities and medical institutions of board made by the government. A study by the consulting firm Bain & Company reported that the cost for discovering, developing and launching a new drug rose over a five-year period to nearly $1.7 billion in 2003. According to Forbes, development costs between $4 billion to $11 billion per drug.

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Author Bio:


For the past 3 years I have been writing informative and high quality articles on online shopping & deals. In the above article have covered topics such as pharmaceutical company in india, pharmaceutical distributors in india, and pharmaceutical manufacturing company.

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