In line with our obsession for everything that is foreign, it seems we prefer to have even our medicines made in distant shores. Latest industry figures reveal that the ten top foreign pharma firms present in the Indian market account for nearly 25.4% of the over all Rs 47,690 crore domestic pharmaceutical market. Now that may not in itself be a particularly impressive figure worth crowing about, but considering the fact that just five years back the figure stood at 15%, it certainly does paint us a picture of what to expect in the days ahead.
So what does the future have in store for our homegrown firms? Well, it would appear that unless they get their act together in a hurry, the fabulous success they have enjoyed on the back of mass-marketing of generic versions of drugs originating in the West could soon be coming to an end. The high growth witnessed by leading members of the domestic industry owes a large measure of gratitude to govt regulations that had
legalized copying of original drugs invented by big pharma abroad , thereby opening the door for firms like Ranbaxy and Dr Reddy’s to develop cheaper versions of patented drugs. In place since 1971, this copy-from-the-rich-to-give-to-the-poor regime finally had to be replaced in the wake of India becoming a member of the WTO, and subsequently being forced to comply with its norms. In its place, India decided to enforce a product patent regime, which banned copying and selling of patented drugs launched after 1995. Obviously, that could not be good news for local firms that haven’t quite invested in the kind of research that could yield breakthroughs allowing them to come up with patents of their own. Already, foreign pharma firms have been growing at well above the average industry growth rate of 16.5% per annum-Abbott grew 25.8 per cent in 2010, Sanofi-Aventis grew 20.4 per cent, while Pfizer, Merck & Co and Novartis grew 20.7 per cent, 20 per cent and 17.7 per cent, respectively. However, in the spirit of optimism, one could see this as an opportunity for our own local companies to actually dedicate adequate resources on coming out with innovative products of their own which won’t require them to rely on copying patents from abroad, allowing them to get rid of the foreign yoke once and for all-after all, you can only go so far on the back of copying from the guy next door, no matter how well it served you in getting through your high-school exams.
At the same time, customers across the country can expect to get access to the latest high quality medicines without having to wait for Indian firms to come out with their own versions of the same drugs, thereby resulting in a more or less win-win scenario for most stakeholders.
With a recent McKinsey report predicting the Indian pharmaceutical market to grow to $55 billion by 2020 from $12.6 billion in 2009, the coming decade holds out the promise of some good times indeed for the numerous foreign pharma firms already present in the country. The recent string of acquisitions of local firms has already paved the way for foreign pharma majors to dominate the field in the coming years and it should be interesting to wait and watch just how our domestic firms gear up to guard their own turf.