751-Sabar Institute Of Management, Tajpur - Gujarat Technological ...

Industry Forecast
Increasing incomes & healthcare spends to spur domestic growth With increasing
affordability, shifting disease patterns and healthcare reforms, the total consumer spending on
healthcare products and services in India has grown at a CAGR of more than 14% since
2000. According to a research report by the Mckinsey Global Institute, spending on
healthcare in India will witness the highest growth rate among all spending categories over
the next two decades. Healthcare spend is expected to grow to 13% of average household
income by 2025 from 7% in 2005. This will be driven largely by increase in per capita
disposable income which is expected to increase to US$765 in 2015 from US$463 in 2005.
Significant patent expiries in developed markets present good growth opportunities for
Indian generic companies: A slew of patents will expire in the US and EU over 2011-15,
including top-selling brands Lipitor, Nexium, Zyprexa and Plavix. Over this period, products
with estimated annual sales of ~US$ 80 bn in the US alone will lose patent exclusivity, and
this will translate into an estimated incremental generic sales opportunity of US$ 18
billion (~60% of current US generic drug market); a similar incremental opportunity in
developed European markets exists as well. A big share of this revenue will go to companies
that secure high-margin first-to-file (FTF) sales which offer marketing exclusivity for 180
days.
Emerging markets to become the next destinations for pharma companies
“Pharmerging” markets, including the BRIC countries, South Africa, Mexico, Turkey,
Poland, Indonesia and Romania, are growing faster than developed markets. According to
IMS, a well-known industry research firm, “Pharmerging” markets will increase their share in
global pharma from 16% in 2009 to around 25% in 2014-15. Indian generics are replicating
their domestic success in markets like Russia, Brazil and Mexico which like India are
branded in nature.
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