In these turbulent times, the [Indian] pharma sector has shown comparative resilience and has been relatively less impacted. There are two reasons for this: the domestic pharma market continues to experience healthy growth and the demand for generic (a biological equivalent of an originator pharmaceutical product) medicines is on the rise in international markets.
Let me add here, that like other sectors , pharma is not completely immune to the slowdown and global economic crisis, but the impact is less severe. Over the past two years, the $8 billion domestic pharma industry has grown at a rate of more than 12%.
It is likely to see high single digit growth in 2009. The growing incidence of lifestyle diseases, rising disposable incomes, greater penetration of health insurance and expanding medical infrastructure will continue to foster growth in the domestic market. The fact is that however bad the economic environment, demand for medicines is relatively inelastic.
We are fortunate that prices of medicines in India are extremely low compared to other nations whose governments are clamouring to bring down their healthcare costs. They are encouraging the use of quality, affordable medicines from India. The need for medication is also growing with the ageing world population and changing disease patterns.
The US, the world’s largest pharma market, with a generic penetration of over 60% (by volume), is a huge market for Indian pharma companies. It should continue to grow as the new government is expected to have a pro-generic healthcare agenda.
They will remain a hot centre for opportunity. There is also growing excitement as drugs worth $60 billion are expected to come off patent in the US in next few years. These positive trends signal a huge market opportunity for Indian pharma companies, who have over the years carved a niche for themselves, in most global markets.