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Presented by:P.UDAY KUMAR

08B81EOO51

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` India pharma Mkt size FY09 Rs 93881 ($19 bn) cr o n the basis of sales,g=13%

` India is the w o rlds 4th largest pr o ducer of pharmaceuticals by v o lume(acc o unting fo r ar o und 8% of glo bal pr o ducti o n)

` In value terms, pr o ducti o n acc o unts fo r ar o und 1.5% of the w o rld to tal.` Empl o ys ar o und 500,000` Indian c o mpany meets 95% of do mestic sales` Fragmented industry contributes 1.6% to GDP.` 5,600 smaller licensed generics manu f acturers` 270 large R&D based pharmaceutical c o mpanies in India and their share is

ar o und 70%`

India pr o

duces22

% of world generics` P er capita c o nsumpti o n of drugs is very l o w $93 as c o mpared t o $412(Japan), $222(Germany), $191(US)

` India am ong top 5 bulk drug producers in world` Ranbaxy is 7 th wo rlds largest generic manu f acture

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C linic a l Tri a ls

Preclinic a l

Testing

File IND at

FDA

Ph a se I Ph a se II Ph a se III

File NDA at

FDA

FDA Ph a se IV

Ye a rs 3.5 1 2 3 2.5 12 T o tal

Additio nalP o st

marketing

testing

required by

FDA

Test

P l a ti n

Labo rato ry

and animalstudies

20 t o 80

healthyvo lunteers

100 t o 300

patientvo lunteers

1000 t o

3000

patient

vo lunteers

Review

pr o cess /

Appr o val

P r se

Assess

sa f ety and

bio lo gical

activity

Determine

sa f ety and

do sage

Evaluate

e ff ectivenes

s, loo k fo r

side e ff ects

Veri f y

e ff ectivenes

s, m o nito r

adverse

reacti o nsf r o m lo ng-

term use

S ccess

Ra te

5,000

co mp o unds

evaluated

5 enter trials 1 appr o ved

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Ge o graphical

Exports 40%

Do mestic60%

Market share

Domestic-73%

MNCs- 27%

Therapy

Acute therapy78%

Chronictherapy 22%

Segment

Fo rmulati o ns72% (exp o rt

15%)

Bulk Drugs25% (exp o rt

15%)

CRAMS 3%

Gr o wth

Fo rmulati o ns16%

Bulk Drugs18%

CRAMS 10%

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Co mpany Name MARKET SHARE %

Cipla Ltd. 5.60

Ranbaxy Lab o rato ries Ltd. 4.76Dr. Reddy'S Lab o rat o ries Ltd. 4.47

Sun P harmaceutical Inds. Ltd. 4.03

Aur o bind o P harma Ltd. 2.98

Cadila Healthcare Ltd. 2.07

Glaxo smithkline P harmaceuticals Ltd. 1.79

Matrix Lab o rato ries Ltd. 1.60

Ipca Lab o rat o ries Ltd. 1.36

Orchid Chemicals & P harmaceuticals Ltd. 1.29

To p 10 c o mpanies c o ntributes 30% of market share( o n the basis of standal o ne sales)

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100 manu f acturing f acilities appr o ved by the US F oo d and Drug Administrati o n(FDA)

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1. India is regarded as having the edge o ver China in terms of:Q ualif ied, English-speaking empl o yeesFair pr o tecti o n of intellectual pr o perty rights supp o rted by well-devel o ped judicialsystem.

2. Availability of skilled scientists/technicians/management pers o nnel at

a ffo rdable c o st.

3. Indian manu f actures can pr o duce drugs at 40% t o 50% of the c o st to therest of the w o rld. In s o me cases, this c o st is as l o w as 90%.

4. Well develo

ped chemistry R & D and manuf acturing in

f rastructure withpr o ven track rec o rd in advanced chemistry capabilities, design of high tech

manu f acturing f acilities and regulat o ry co mpliance.

8

StrengthsStrengths

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` The N PP A (Nati o nal P harma P ricing Auth o rity), setsprices of diff erent drugs, which leads t o lo wer pr of itability fo r the c o mpanies.

` Indian pharma market is o ne of the least penetrated inthe w o rld: India acc o unts fo r alm o st 16% of the w o rldpo pulati o n while the t o tal size of industry is just 1-2%of the gl o bal pharma industry

` Large n o . of small players increases c o mpetiti o n andreduces e ff iciency

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` The new patent pr o duct regime will bring with it new inn o vativedrugs. This will increase the pr of itability of MNC pharma c o mpaniesand will fo rce d o mestic pharma c o mpanies t o fo cus m o re o n R&D

` Large number of drugs g o ing off -patent in Eur o pe and in the USbetween 2005 t o 2009 off ers a big o pp o rtunity fo r the Indianco mpanies t o capture this market

` Can bec o me a gl o bal o uts o urcing hub fo r pharmaceutical pr o ducts

` New markets are o pening

` Aging of the w o rld po pulati o n, Gr o wing inc o mes, Gr o wing attenti o nfo r health.

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` Co ntainment of rising health-care c o st.

` High C o st of disc o vering new pr o ducts and f ewer disc o veries.

` Stricter registrati o n pr o cedures.

` High entry c o st in newer markets.

` Threats f r o m o ther l o w co st c o untries like China andIsrael exist

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` Mature pharmaceutical market : is expected t o gr o w at1% ~ 4% by 2013

` Emerging pharmaceutical market : is expected t o gr o w

at 13% ~ 16% by 2013` High gr o wth in generic segment as $123bn w o rth

patent will expire by 2012 ($18.4bn benegit t o India)

` P ricing pressures and shrinking margins in thegenerics space and the increasing litigati o n instancesin the US are c o mpelling Indian c o mpanies t o co nsider o pp o rtunities bey o nd US

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CUSTOM DUTY` Exempti o n of cust o m duty fo r impo rt of all capital g oo ds, inputs,

co nsumables and re f erence standards fo r R&D purp o ses

` Extensi o n of cust o ms duty exempti o n to mo re lif e saving drugsand o ther antiAids and anticancer fo rmulati o ns

EXCISE DUTY` Goo ds manu f actured in R&D centres sh o uld be exempted f r o m

excise duty and service tax

`

Extensio

nof

excise duty exemptio

n to

mo

re lif e saving drugs ando ther anti Aids and anti cancer fo rmulati o ns

OTHERS` Strengthen and increase capital o utlay fo r academic instituti o ns

engaged in scienti f ic research

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` Future Trends

` Smaller c o mpanies, which had s o f ar bene f ited f r o m the pr o tectiveregime, may be fo rced t o bec o me c o ntracting units, o r clo se sh o p.

` Generics will have a huge demand.

` Increasing R&D c o sts will lead t o mo re c o ns o lidatio n am o nginternati o nal c o mpanies. Within 5 years, the t o p ten pharmaco mpanies will c o ntr o l o ver 60% of the w o rld market.

`

` Internati o nal c o mpanies c o uld set up their o wn R&D labs in Indiaand devel o p drugs fo r tr o pical diseases.

` Indian pharma c o mpanies are expected t o mo ve up the value chainf r o m merely being reverse engineers t o devel o pers of pr o prietarypr o ducts in the US ma rket .

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` The Indian market has s o me unique advantages.` India has a 60-year- o ld thriving dem o cracy.` It has an educated w o rk fo rce and English is business language.` It has a s o lid legal f ramew o rk and str o ng f inancial markets. M o re

than 9,000 c o mpanies are publicly listed. P r of essi o nal services areeasily available.` The c o untry is n o w co mmitted t o an o pen ec o no my and

glo balisati o n. Ab o ve all, it has ab o ut 200 milli o n middle classmarkets, which is c o ntinu o usly gr o wing. Over time the internati o nalpharmaceutical industry has been f inding great o pp o rtunities inIndia.

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