Global Life Sciences Cluster Report 2011 - Jones Lang LaSalle

India
To support the distribution channels used by the producers
of generic drugs and CMOs, the Union Ministry of Health and
Welfare, in collaboration with the pharmaceutical industry and
airport developers GVK and GMR, plan to set-up dedicated
cargo zones to handle pharmaceutical imports and exports.
Price controls are carried out on certain drugs by virtue of
the Drugs Price Control Order (DPCO), supervised by the
National Pharmaceutical Pricing Authority (NPPA). The Indian
Government’s Department of Pharmaceuticals has also started
medicine shops, called ‘Jan Aushadhi,’ in various locations.
These shops sell generic medicines at lower prices than their
corresponding branded medicines.
87 Asia Pacific | Jones Lang LaSalle
Various forecasts
indicate that India
is on the brink of
becoming a major
pharmaceutical hub,
and in particular a
lucrative destination
for clinical trials for
global giants.
Outlook
Various forecasts indicate that India is on the brink of becoming
a major pharmaceutical hub, and in particular a lucrative
destination for clinical trials for global giants, with several
analysts valuing the country’s pharmaceutical market at
upwards of 2,288 billion rupees ($50 billion) 1 by 2020. Helping
to propel this growth is strong local demand, fueled by the
large population base and a growing middle class.
Beyond domestic demand, the area has created a positive
reputation in areas essential to the future of the life sciences
industry. India already has a strong CMO base and will
continue to grow this area of the industry as global companies
outsource to drive margins. In addition, with the large number
of drugs coming off patent, the robust generic manufacturing
market is poised to take advantage of new product areas.
While the biotechnology market is still new, there is market
share to be had in the realms of biosimilars and contract
research. But advancements in high-tech infrastructure and
human capital will be needed.
Legal infrastructure, in particular the regulation around
ownership of public companies, is a big challenge to carry
out business as it can slow down decision making. Another
near-term challenge is the management of intellectual property.
While the industry is supported by Intellectual Property
Protection regime, licensing of most drugs and pharmaceutical
products has ended. Manufacturers are now free to produce
any drug duly approved by the Drug Control Authority,
potentially hindering global players accustomed to more
regulated environments.
1. Six-month average conversion rate of 45.7634 rupees per US dollar,
as of October 2011.
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