MARKET ANALYSIS REPORT

ON MEDICINES SEGMENT OF
HEALTHCARE INDUSTRY

CONTENTS
I. Overview of the Sector
II. Market Trends
III. Market Opportunity
IV. Barriers to Entry
V. Existing Distribution Channels

Overview of the sector

India is among the top six global
pharmaceutical producers in the
world.
Presently there are 10,500
manufacturing units and over 3,000
pharmaceutical companies in India.
The price of drugs is very low. While
India is 10th globally in terms of
value, it is 3rd in term of volume of

Market Trends
The medicine industry is expected to grow at a
CAGR of 14% to reach a turnover of 47.06
billion $ by 2018
The domestic drugs industry, which is valued at
(US$ 25.87 billion) at present, is also expected
to grow in the local market with aggressive
rural penetration by drug makers, increased
government spending on health, urbanization
and growing health awareness among people.

Market Opportunity
Affordability will drive most of the
demand growth in the coming years.

Barriers to entry

The medicine industry has many barriers to

entry, which prevents new companies from
entering into the market. Some of them are: Extensive patents that give rival firms the right to be
the sole producer
Many of the top firms have "significant manufacturing
capabilities that are hard to replicate.
Regulatory policies new companies have to get a
significant amount of permissions and approvals from
the government to set up shop.
First mover advantage (brand loyalty) quality of a
substitute generic drug is largely unknown

Existing Distribution
Channels
Brick and mortar stores are highly
concentrated in Tier 1 and Tier 2
cities.

New forms of distribution (eg:having virtual/online presence only)

can be made use of new entrants
into the sector.

Success factors
The key to success in the industry can
be: Achieving Economies of Scale
Finding ways to cut down on costs and
improving production

Achieving better access to distribution

channels
Technological progress

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