The Voluminous Indian Pharmaceutical Industry

Economic: Globalization of the pharmaceutical industry is an exciting opportunity to have research and development done at cheaper prices in other countries. However, this could be a double edged sword for companies because it is easy for other countries, such as India, to produce generic versions of the drug in bulk.

U.S. based companies hold rights to most of the world’s rights on new medicines and holds thousands of new products currently being developed. As of 2012, the industry helps support almost 3.4 million jobs in the U.S. economy. It is also one of the most heavily R&D based industries in the world. In the United States, the environment for pharmaceuticals is much friendlier than other countries around the world in terms of pricing ability and regulations. Both the Pharmaceutical and Biotechnology industries have experienced significant growth in the past year with year-over-year increases of 13.02% and 34.69% respectively. It is an even more striking when looking at the past five years considering both have beat out the S&P 500 with pharmaceuticals increasing an additional 31.44% and the biotechnology sector besting an astonishing 269.3% more return than the

Five of the top ten pharmaceutical companies are located in the United States and the other five are European companies, all of these companies combined, employ approximately 787,000 people. The ranking of the following pharmaceutical companies are based on

The pharmaceutical industry continues to be a major driver of trend. While demand for medicine rapidly increases in emerging economies, a growing number of consumers are also analyzing the economic performance of different medicines. These events will heighten the challenges the

There are advantages of starting a pharmaceutical firm in India. It has emerged from being an enzyme-producing firm to a biotech powerhouse under the guidance of Ms Kiran M. Shaw. They have a well-established pharmaceutical industry that has been growing since 1947. After the purchase of Hindustan Antibiotics Ltd. and India Drug and Pharmaceuticals Ltd. they were able to compete with the MNC’s (Multi National Corporaton) from overseas (Kalegaonkar, Locke, Lehrich, 2008, p. 2). In the beginning the pharmaceutical industry saw substantial growth. “By the beginning of the 21st century, over 20,000 pharmaceutical companies were operating in India” (Kalegaonkar, Locke, Lehrich, 2008, p. 2). “The pharmaceutical industry in India is ranked third

Besides that, the pharmaceuticals are extremely global; it is worth approximately $300 billion a years and expected to increase to $400 billion around the next three years

By 2020 the pharmaceutical market is anticipated to more than double to US$1.3 trillion, with the E7 countries — Brazil, China, India, Indonesia, Mexico, Russia and Turkey — accounting around for one fifth of global pharmaceutical sales. Further, incidence of chronic conditions in the developing world will increasingly resemble those of the developed world.

Global pharmaceuticals had presence in India since early 80’s and it was not until 1993 that Eli Lilly International decided to establish a Joint Venture with India’s second largest laboratory and exporter, Ranbaxy. This move happened in a very challenging context as both companies have very different profiles and backgrounds. The main differential characteristic was the nature of their products. While Ranbaxy was focused on generics and in other intermediate products, Eli Lilly International core business was the commercialization and development of new drugs through an aggressive R&D strategy. The trigger for Eli

Moreover, the pharmaceutical industry is increasing the profit margin yearly, when the growth is steady and the intellectual property rights are really favorable for the industry in order to maintain the performance.

We analyzed the Indian Pharmaceutical industry on these five forces and the findings of industry competitiveness and profitability are written under the relevant competitive forces.

The pharmaceutical industry has shown remarkable structural stability as majority of its key players have been in existence for almost a century now. However, it has not been an exception to unpredictable times of the 21st century as it is grappling with quite a number of challenges. The most urgent issues include termination of manufacturers’ rights, importation risks, pricing problems and the infiltration of counterfeit drugs, the cost of R&D and political and administrative constraints notwithstanding. Most of these challenges have existed over a long period and the rate at which they are escalating presents a big threat to the industry.

While the United States has long been the primary market for prescription drugs, many indicators point toward increasing prescription drug demand in international markets, especially in developing countries. While pharmaceutical sales in developing countries have historically been much lower than they are in the United States and Europe, in recent years they have been growing at much faster rates than in the developed world. For example, sales in China in 2004 grew 26 percent, followed by Thailand at 16 percent, and Egypt at 15 percent (Davidson, & Greblov, 2005). In 2006, emerging markets continued to present this trend, growing at 81 percent over the previous year. As demonstrated in figure 1, the global pharmaceutical market is forecasted to grow to $929 billion in 2012, representing an equivalent compound annual growth rate of 5.5 percent over each of the five years preceding 2012 ("Indian pharmaceutical industry,").

India’s middle class of approximately 300 million people is continually developing, yet the majority do not retain health insurance. This vast untapped market drew foreign interests and in the 1980’s the Indian government opened the industry to allow foreign direct investments to be made. Despite the lower profits compared to global markets, Eli Lilly knew they could quickly expand their market presence by doing business in India. The pricing controls and regulations from the 1970’s posed a threat to profits and Eli Lilly would need a local and knowledgeable partner to break into this market successfully. The strategic joint venture formed with Ranbaxy was the answer. Ranbaxy could handle manufacturing locally, provide a distribution network, and could manage brand recognition. They also dealt with regulations and health system bureaucracy. In return, Eli Lilly’s revenues from their innovative pharmaceuticals caused Ranbaxy’s market shares to

This report provides an analytical strategic review of the global pharmaceutical industry; its origin, evolution,

India 's pharmaceutical industry was facing various international trade limits on account of their abuse of intellectual property rights. The Indian organizations used to copy licenses of drugs made by Western nations and Japan with no obligation to property rights. This would dishearten international investors from taking interest in India 's drug industry. India was useful for making nonexclusive, brand drugs in light of the fact that the licenses for those drugs at that point had already lapsed. In any case, the situation has changed considerably as of recent years because of the rising interest the in international trade. Particularly, with the induction of India into the World Trade Organization (WTO) in 2005, and with that came the gratefulness and security for property rights. The fact that India is a member of the WTO has encouraged the mode for foreign investors to begin participating in India 's numerous commercial ventures to include the drug industry. Because of the flow of investments and Western participation, India 's pharmaceutical industry has seen a remarkable advancement since 2005. According to the case, by 2011, the industry approached $11.5 billion. There are a number of components that have contributed towards this amazing improvement in the drug business. The starting occasion was India 's concurrence with the WTO, which offered security to intellectual property rights and assurance to international investors. Furthermore, India has a few inside