Indian Pharmaceutical Industry: Evaluation Of Current Scenario And Future Trends
The Indian pharmaceutical industry has shown impressive growth over the last few years and has become one of the sunrise sectors of the Indian economy. The introduction of the product patent regime in India necessitated pharmaceutical companies both in India and abroad to reconsider their business models and explore newer markets.
In this interview with R. Srinivasan, Associate Professor in the Corporate Strategy and Policy department at IIM Bangalore, who has studied the pharmaceutical sector in India, we try to understand the Indian pharmaceutical industry in terms of its evolution, changes in strategy, merger and acquisition activities, growth prospects and future trends.
The acquisition of Indian pharmaceutical companies by global majors and the success of Indian firms in the generics markets have been prominent stories for the last few years. The tremendous growth potential of the huge Indian market and the focus on efficient healthcare in western markets are the primary reasons for these trends. This, however, is only a part of the entire picture. Indian firms have global ambitions and have acquired companies abroad not only to develop R&D capabilities and move into new drug development, but also to enter new markets.
Despite this growth, concerns like the affordability of drugs for lower-income groups and the ability to rapidly respond to pandemics like swine flu still remain unaddressed. For sustained growth over the next few decades, firms should concentrate on tackling such concerns and coming up with innovative drug delivery mechanisms.
From the interview
"As an overpopulated tropical country India is home to a host of bacteria and viruses which provide tremendous opportunities for pharma companies."
(On what makes India such an attractive destination for pharma companies)
"The Dr. Reddys, the Ciplas and the Ranbaxy’s of the world are masters of reengineering and that is where they built their capabilities."
(On the evolution and strengths of Indian pharma majors)
"Complementary products and the distribution network were the main reason behind the acquisition of Betapharm by DRL."
(On the strategies behind a recent acquistion)
"Diseases that cannot be cured, diseases that have to be managed provide great opportunities for branded drugs."
(On the future growth opportunities for pharma majors)
R. Srinivasan is an Associate Professor in the area of Corporate Strategy and Policy at the Indian Institute of Management, Bangalore. An FPM from IIM Ahmedabad, his areas of research include Strategic Management - competitiveness and competitive advantage, Knowledge Management, New Organizational Work Forms, Good Governance and e- Governance, IT Strategy, Teams and team working and Industrial organization. He has also been involved in numerous live consulting projects and has authored several books and journal articles. He has a Bachelors degree in Mathematics from Madurai Kamaraj University and a Post Graduate Diploma in Forestry Management from IIFM, Bhopal. Prior to joining IIM Bangalore, he has worked for the National Tree Growers' Cooperative Federation Ltd. as a Project Executive.