Indian Pharma companies supply over 50% demand for global vaccines, 40% over-the-top

generic drug demand in the US and 25% of all medicine in the UK (FICCI, 2018). India
ranks 3rd for worldwide production by volume and 14th by value. Indian Pharma sector is
expected to grow by CAGR 22.4% and is expected to cross USD 50 bn by 2022.

There are 4 major drivers of the Pharmaceutical industry in India. They are:

1. Cost Efficiency: India’s cost of pharmaceuticals production is 33% lower than the
average in the US. With access to large labour force, low production costs, high
quality manufacturing, and the R&D boost given by the Indian government, Indian
pharma companies have the very high exports of USD 16.28 bn in 2020
2. Increasing Investments: The BSE healthcare index has grown at 16.72% from 2008-
19 and is expected to continue this upward trajectory with the government provided
boost and the FPI inflow steadily increasing through COVID as well.
3. Policy Support: USD 9.3 bn allocation to the MoHFW in Union Budget 2020-21 is
set to provide a huge stimulus alongside the 100% FDI allowance via greenfield and
brownfield roots and 74% FSI via automatic route. This is inline with the Pharma
2020 vision aimed at creating global leadership in drug and related manufacturing.
4. Economic drivers: Increasing penetration of logistics providers in the rural Indian
market has seen an uptick in rural OTC medicine consumption in India. This potential
market makes India a lucrative destination for pharma sales.

The domestic Indian Pharma market is expected to reach USD 1.54 bn in 2020 with a 10%
growth expected over 2019. With increasing health insurance policies making up roughly
24% of the Indian market and the increasing incomes of Indian households, the demand for
high-end drugs is set to increase in India over the next few years. Projections show a 9-12%
Y-o-Y growth in the Indian Pharma market. (McKinsey & Company, 2010).
 Annual turnover of Indian Pharmaceuticals
Market (USD bn)
25

20.03
20 18.12
17.87
16.41
15.53
15

10

0
2015 2016 2017 2018 2019

Source: Department of Pharmaceuticals

Quarterly growth in Indian Pharma Market(%)

14

12 11.5

10 9.5
9
7.9
8
6.6
6

0
Mar'19 Jun'19 Sep'19 Dec'19 Mar'20

Series 1

Source: Department of Pharmaceuticals

Based on past trend and recent growth rates, with targeted marketing and unlocking of the
Indian market from lockdown, the Indian Pharma market grew at 9.6% YoY even in COVID
scenario due to high amount of exports from India to other countries. The same was reflected
in December 2020 with an industry wide growth of 9.8%. Generic drugs make up over 70%
of the total market share in terms of revenue with OTC and patented drugs coming in at 21%
and 9% respectively. Cardiac drugs in particular have the 2nd highest annual turnover in the
Indian market with a 12.4% market share. The cardiac therapy and drugs industry is growing
at 10% CAGR (Desai B., 2020). With cardiovascular diseases causing 18 million deaths a
year worldwide, according to WHO, by 2030, it would be responsible for approximately 35%
deaths in India alone. With the market share of MNCs being only 13%, domestic players
dominate this market which is set to overtake anti-infectives in 2020-21 with a 6% YoY
increase in revenue as compared to the 3% industry average. With >80% of Indian cardiac
related deaths being due to heart attacks, Vericiguat has a huge market as it reduces the risk
of death due to heart failure.

Segment-wise Moving Annual Turnover 2018

(USD bn)
Others 0.41
Vaccines 0.91
Hormones 0.31
Ophthal 0.34
Anti-Neoplastics 0.35
Gynaenacological 0.95
Neuro 1.14
Derma 1.27
Pain/ Analgesics 1.29
Respiratory 1.43
Vitamins/ Minerals 1.61
Anti Diabetic 1.78
Gastro Intestinal 2.17
Cardiac 2.34
Anti-infectives 2.58
0 0.5 1 1.5 2 2.5 3

Series 1

Source: AIOCD
References:

Desai, B. (2020, September 29). Pharma - Sector Thematic - Cardiac: the heartbeat of

domestic market - HDFC Securities Institutional Research Desk. EquityBulls.

https://www.equitybulls.com/admin/news2006/news_det.asp?id=274574#:

%7E:text=Cardiac%20is%20the%20largest%20therapy,share%20in%20the%20same

%20period.

FICCI. (2018, February). Trends & Opportunities for Indian Pharma. http://ficci.in/study-

page.asp?spid=22944§orid=29

IBEF. (2020, November). Indian Pharmaceuticals Industry Report November 2020.

https://www.ibef.org/download/Pharmaceuticals-November-2020.pdf

McKinsey & Company. (2010). India Pharma 2020: Propelling access and acceptance,

realising true potential.

https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Pharma%20and

%20Medical%20Products/PMP

%20NEW/PDFs/778886_India_Pharma_2020_Propelling_Access_and_Acceptance_

Realising_True_Potential.ashx