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According to “2014 Global Life Sciences Outlook” by consultancy firm Deloitte, pharmaceutical sales in India stood at $22.6 billion in 2012, which is expected to rise to $23.6 billion in 2013.
“As a per cent of health care expenditures, pharmaceutical sales were 22.6 per cent in 2012; they are expected to reach 23.6% in 2013 and 27 per cent by 2016,” says the report.
The multi billion dollar Indian industry, however, faces challenges in meeting global standards of quality, says the report.
“The outcome of new product patents, drug price control, poor regulatory enforcement, inadequate health care infrastructure, shortage of skilled workforce, increasing patient expectations, ever-changing technology, and quality management and conformance to global standards act as critical barriers in delivering products and services in a sustainable manner,” Deloitte said.
Meanwhile, the Indian government is reviewing patented drugs of foreign firms to see if so-called compulsory licences, which in effect break exclusivity rights, can be issued for some of them to bring down healthcare costs and boost access to drugs to treat diseases such as cancer, HIV/AIDS and hepatitis.
The US and its pharma lobby has been exerting pressure on India over its patent laws.
International aid group Doctors Without Borders on Friday told the US International Trade Commission that it would support India in the steps it has taken to increase access to medicines for millions of patients.
Governments in emerging markets have increasingly sparred with Big Pharma as these global drug firms try to increase footprints in these fast-growing economies.
The Indian drug industry is a lifeline for millions of patients in poor countries, many in Africa, unable to pay sky-high Western prices to treat illnesses that include HIV, malaria, asthma and cancer.
Indian drugmaker Ranbaxy, a major supplier of drugs especially generics to the US, has been rebuked heavily by the US food and drug regulator, the USFDA, after products from a fourth plant were banned from entering its main market due to manufacturing violations earlier this year.
However, India has 150 manufacturing sites approved by the USFDA, the highest in any foreign country.
India’s Industry Minister Anand Sharma has also charged the US regulator with not giving enough opportunity to Indian drug-makers to explain themselves before taking action against them for allegedly flouting quality norms.
The new Deloitte report placed India among the top five emerging pharma markets.
India has been posting double digit growth on account of several socio-economic factors, including increasing sales of generic medicines, continued growth in chronic therapies, and a greater penetration in rural markets, the report said.
“Other growth drivers are heightened health awareness, increasing affluence, changing lifestyles resulting in higher incidence of lifestyle diseases, increasing government expenditure on health care, and a nascent, yet fast growing health insurance industry,” the report further said.
In addition, the nation’s low cost of production and R&D boosts the efficiency of pharmaceutical companies and its comparative cost advantage enhances pharma exports, it added.
“The worldwide demand for cost-effective generic drugs is leading India to rise as a hub of generic drug manufacturing,” the report said.
The report also said a number of pharma companies are increasing their operations in India.
India accounts for over 10 per cent of global pharma production, with over 60,000 generic brands across 60 therapeutic categories; it manufactures more than 400 different active pharmaceutical ingredients (APIs).
On the opportunities for the country’s pharma sector, the report said Indian firms can expect to garner $40 billion in sales with 46 US drug patents set to expire by 2015.