Transcript Lupin - Free

No wonder, India is projected to become the 3rd largest
economy by 2050
50000
45000
Projected to be the third
largest economy by 2050
40000
35000
30000
25000
15000
10000
5000
0
Ch
8%
7%
• 4th largest economy in the world
by PPP
• 2nd fastest growing major
economy in the world with GDP
growth rate of 8.9%
20000
9%
Positive Indicators
US
In
Jpn
Br
Russ
UK
Ger
Fr
It
Only India maintains 5% GDP
growth through 2050
6%
• Rising foreign exchange reserves
of close to US$ 166 billion
• A booming capital market with the
popular "Sensex" index topping
the majestic 13,500 mark
• The Government is estimating FDI
flow of US$ 12 billion in this fiscal,
and a more than 22 % surge in
exports
5%
4%
3%
2%
1%
0%
2000 - 2005 - 2010 - 2015 - 2020 - 2025 - 2030 - 2035 - 2040 - 2045 2005 2010
2015 2020 2025
2030 2035
2040 2045 2050
Brazil
China
Source: BRICs Potential
India
Russia
• Inflation rate is maintained at
4.2% (consumer prices, 2005
est.)
All of these make us believe that the pharmaceutical market
would also benefit from this rapid growth and reforms, projected
to grow at 11-13%* over next 3-5 years…
Population dynamics
Increasing capacity to spend
• Large population base 1.5 Bn by 2050
• Literacy rate at 65-70% and estimated to be
close to 95% by 2020.
• Increasing Life expectancy at birth (age in
years) currently at 65 and projected to go
up to 69 by 2020.
• Geriatric population to double over next 15
years
• Huge middle class with vigorous buying capacity
- 450 mio
• Opening up of reimbursement avenues
• Wave of shopping malls, credit uptake
High disease prevalence
Changing healthcare model
• Fastest growing diabetes
population
• Major pharma and insurance cos now in India
• AIDS, Oncology and other chronic
ailments growing in numbers
• Medical tourism growing by 20% YoY
• Awareness and detection levels
are improving
Increased healthcare access
• Disease specific insurance plans in place
• Corporatisation of hospitals and pharmacies
• Move to more scientific methods of promotion
• New distribution channels
• Current access ~40-50%; govt. committed to take it to 80%
in next 15-20 years
• Improving access and growth rates in rural India
• Hospital market growing rapidly, ~30-40% QoQ
• OTC market grew at more than 7-8% in 2005, projected to
grow at 10% over the next few years
*Revised IMS Prognosis 2006
…and the current trends in the IPM clearly reflect the upbeat
mood in the economy
Size & Growth
At $6 Billion on retail, the industry recorded a value
growth of 18%, far higher than previous year
Growth Contributors
A change in trend, new introductions with 2% have
dropped, while price increases contributed 1% with
volume growth at 16%
Therapy Split
Acute therapy dominates the market with a value
contribution of over 77%. Chronic segment has also
registered a healthy growth of 18% against 19% of
acute
Indian Vs MNC
Indian companies still dominate the market with a
share of ~80%, have been capitalizing the pre-IPR
advantage
Doctors
Currently General Practitioners (GPs) dominate the
market, however the trend begins to favor
physicians and specialists
Patient Population
Geriatric population is on the rise in the country,
but ~ 40% of the population is also below 14 years
of age**
Source : Stockist Secondary Audit, Nov 06 MAT, WHO reports**
Healthcare segment in India is at the beginning of the
evolution curve at the moment ..with large opportunities
• Current healthcare access is at
30%; govt. committed to take
Sources of Healthcare Spending
(Public vs. Private %)
it to 80% in next 15-20 years
Public
Private
• Healthcare spending in India
which is currently at 5.3% of
GDP is expected to rise to 8%
63
58
56
37
42
44
China
Brazil
USA
82
by 2012
• Majority source of healthcare
spending is Private
Source: WHO, IBEF, CII, OPPI
18
India
All of these make us believe that the pharmaceutical market
would also benefit from this rapid growth and reforms,
projected to grow at 11-13%* over next 3-5 years…
Population dynamics
• Large population base
1.5 Bn by 2050
• Geriatric population to
double over next 15
years
High disease prevalence
• Fastest growing diabetes
population
• AIDS, Oncology and other
chronic ailments growing
Increased healthcare access
• Current access ~40-50%;
govt. committed to take it to
80% in 15-20 years
• Improving access and growth
rates in rural India
*Revised IMS Prognosis 2006
Changing healthcare model
• Medical tourism growing by
20%
• Corporatisation of hospitals
and pharmacies
• New distribution channels
Increasing capacity to
spend
• Huge middle class with
vigorous buying capacity
• Opening up of
reimbursement avenues
• Indian Pharmaceutical Industry
•
•
Globally Indian Pharma Industry ranks 4th in volume and 14th in
Highly fragmented with 5,000+ units
•
Only 289 companies tracked (ORG – IMS) with sales of USD 4.1 bn
in 2003
•
28 MNCs account for ~ 22% (USD 961 mio) of Pharma market
value
•
Prices controlled but gradually de-regulated from 347 in 1979 to 74 at
present
•
World class manufacturing facilities :
over 70 US FDA approved facilities – largest number outside of USA
over 350 APIs manufactured from basic stage
exports of APIs USD 700 million
•
Emergence of world class CRO facilities
The Indian Market has grown at a CAGR of 7.6% and is projected to
reach ~US$8 billion by 2010
•Retail pharmaceutical sales
•US$ billion
CAGR =
9-11%
CAGR =
7.6%
•3.4
•3.5
•3.7
•2000
•2001
•2002
Source: IMS; McKinsey analysis
•4.2
•2003
•7.7-8.5
•4.6
•2004
•2010
estimated
size
Market Has Three Key Segments and is Dominated
by Branded Generics
•Segment
•Description
•Examples
•OTC
− Non prescription, self-medication
products sold directly to consumers with
high emphasis on safety
− Crocin,
•Market segments
•Per cent
− Benadryl
− Can be sold through non-chemist outlets
such as kirana stores etc
•100% = US$ 4.6 billion
− Usually involves high advertising costs
•OTC
•Generic-
•8-10
•7-8
•generics
•Branded
generics
•Ethicals
•Generic-
•(Rx)
•generics
•82-85
− Prescription only products but sold under
the generic/ chemical name
− Usually sold at high discount to the branded
version
− Ranitidine
− Amoxycillin
− Sold through push by chemists who get
much higher margins on unbranded
products
•2004
Source: IMS retail audit, web searches
•Branded
generics
− Prescription only products sold under
brand names
− Ciplox
(Ciprofolxacin)
− Sales force of pharmacos generate
demand through detailing/ other promos
to doctors
− Cardace (Ramipril)
Four Forces are Shaping the Indian Pharma Market
•Market tiering and increase in share of
specialty TAs
− Undifferentiated mass market dominated by AI and GI
moving towards a 4 tier market
− Increase in relative share of specialty TAs driven by
greater prevalence of chronic diseases
•Growing competition from
MNCs
•IP changes
− Current competitive
landscape is dominated by
local players with only 4
MNCs in top 15
− However, key market trends
favour MNCs – as a result
incumbents are increasing
focus while absentees are
evaluating entry
− Market in transition:
product patent bill
passed in March ’05
after decades of process
patents only
1
•Fundamental shifts in Indian
pharmaceutical market
4
3
•Pricing
− Historically low prices due to intense competition, government
control and self pay market
− Possible to command higher prices through differentiated
products and superior marketing skills
− Uncertainty around price control although number of drugs
under DPCO has steadily declined
2
− Patent infrastructure
gearing up substantially
to drive compliance
National Pharmaceuticals Policy 2006
•
•
•
•
•
•
•
To ensure availability of good quality medicines at reasonable prices
To improve access particularly to the poor
To increase investment in manufacturing
To promote greater research & development by providing incentives
To enable domestic companies to become internationally competitive
To increase exports
To develop India as the preferred global destination for Pharmaceutical
R&D and manufacturing
National Pharmaceuticals Policy 2006
• Over the past 25 years price control has been reduced from 400 to only 74 drugs.
• New Policy recommends basket of 354 National List of Essential Medicines to be
used for Price Control criteria, in addition to current 74
• Industry opposed to increase in price control
- Industry suggests price monitoring v/s. cost based
price control
The Country will Reap Enormous Benefits through
R&D Growth in the Pharmaceutical Industry
•Build India Inc. as
a brand
− Prove India’s ability to participate in
the knowledge intensive industry
− Make India a hub for global research
•Benefit the economy &
industry
•Create good health
for all
− Create high-value jobs in research, manufacturing,
and sales and marketing
− Increase access to medicine for the mass
population
− Increase inflow of export earnings and FDI
− Provide access to superior products and
India-specific treatments developed by MNCs
and local companies
− Create a vibrant and internationally recognised
industry
… India poised to be among the Top 10 players in
the Global Pharmaceutical market by 2010
INDIA
An Emerging
Knowledge
Superpower