PHARMACEUTICAL INDUSTRY IN GUJARAT

 A DETAILED OVERVIEW.

HISTORY:        

Þ                  On 1st May 1960 Gujarat State got separated from greater Bombay State.  Prior to that, about hundred years, Gujarat based Companies like Alembic Chemical Works Ltd.  And Sarabhai Chemicals were producing Galenicals, Syrups, Elixirs, Powders, and Extracts etc.  

Þ                  At the time of independence, India was not self-sufficient for medicines.  Many of formulations and bulk drugs were imported.   Exports of medicine were almost negligible.   Total production of Pharmaceutical products in 1947 – the year of independence  - was in the tune of Rs.100 million only.  

Þ                  Both – Government and Pharmaceutical Industry to increase production of bulk drugs and formulations, made rigorous efforts.   Entrepreneurship of manufacturers helped to make the country almost self-reliable and today about 95% of the bulk drugs and formulations are produced locally.  

WORLD SCENARIO.

Þ                  The world market for the pharmaceuticals was valued at US $ 250 billion in 1994 and it is expected to reach US $ 350 billion in the year 2000.

Þ                  Estimated at 538 million, the world’s population in 1991 was 11% larger than in 1985 and almost 21% larger than a decade ago.

Þ                  The USA, European Unions and Japan are the biggest markets for drug formulations  (USA 30 billion, E.U. 40 billion, Japan 31 billion in 1992).

Þ                  All new drugs are marketed first in one of these countries.   The introductory prices are thus, related to the average per capita income of these countries and are generally out of reach of developing countries.

Þ                  The Pharmaceutical market worldwide, valued at US $ 247.9 billion in 1994 is forecast to grow to US$ 342 billion by 1999 representing a compounded annual growth rate of 7.1%. 

Þ                  As per US FDA, of the 348 new drugs placed in the market in the 80’s by top 25 drug companies 91 (26%) were new molecules.  Even of these, 60 were classified under “C” category.   This means, only 10% of the drugs introduced in 80’s offered significant therapeutic gains over the existing drugs. 

Þ                  In the USA and Japan together constitute 45% sale on non-communist world pharmaceutical market.   The 50 largest companies produced 66% of the world output of drugs and pharmaceuticals, and also supply 50% of the pharmaceutical requirements of the developing countries.  

Þ                  Among the world’s largest 200 odd pharmaceutical firms, 50 are Japanese and 33 are US firms.   The world trade in pharmaceutics is also dominated by the developed countries, which account for over 90% of world exports and about 70% of world’s imports.

Þ                  Though the imports of the developing countries are significant at 25% of total world pharmaceutical imports, their exports account for barely 6 to 8%.

Þ                  The market for bulk pharmaceutical chemicals are estimated at US $ 32 billion in 1994, is expected to reach US$ 35 billion by 2000.  

Þ                  During the mid nineties more than US $ 100 billion worth of mergers and acquisitions, involving over 15 major companies have taken place worldwide.

Þ                  The US market in generic, is growing   at around 20% annually and will conservatively worth about US $ 15 billion by the year 2000.

Þ                  The estimated figure for the generic markets worldwide is about $ 25 to 30 billion. In the next five years it is expected to increase $ 50 billion.

Þ                  Globally, over the last 50 years, about 30% of the drugs have come from academic research while 70% of drugs have been from the product of industrial research. 

Þ                  In Germany, more than 50% of the prescriptions are for Generics, though they account for only 14% by value.

Þ                  Worldwide, the business for OTC is estimated to be $ 44.8 billion and enjoys a market share of 28% in the US, 15% in the European Union.

Þ                  The worldwide pharmaceutical market in 1996 reached US$296.4 billion at ex- manufactured prices, up by 4% over 1995.  The highest growth was in North America and Latin America, which posted figures of 12% and 8% respectively, while sales in Africa, Asia, and Australia regions fell by 6%.  Within North America US achieved 12% growth to US$ 98.6 billion, while sales in Canada by 5% to US$ 4 billion.

Þ                  In 1996, the Italian market grew at 11%, US at 10% and Indian market at 15.8%.  

Þ                  In the US, about 40 drugs worth $ 16 billion are set to lose patent by the end of 2002.  

Þ                  The world pharmaceutical market is expected to grow at compounded annual growth rate of 6.2% and expected to reach $ 378 billion in 2001.  Southeast Asia and China are likely to see the largest jump in market share during the period from 5% in 1997 to 7% in 2001.

Þ                  The world exports of pharmaceutical has increased to US $ 14.4 billion in 1983 to US $ 35 billion in 1993 and is currently around US $ 50 billion giving a compounded annual growth rate of around 13%.  The world trade in pharmaceuticals is dominated by the developed countries, which account for over 90% of the world’s export.

Þ                  The developing countries together accounted for only 5 to 7% of world pharmaceutical exports; China, India, Hong Kong, Singapore and South Korea are the major exporters.

INDIAN SCENARIO.

Þ                  In India, medicines account for 2.5% in hospitalization and .5% in domiciliary treatment cost. 

Þ                  India’s exports of bulk actives and intermediates is expected to grow from the current level of US $ 420 billion to about US$ 890 million in the year 2001.

Þ                  The Indian Pharmaceutical market is expected to expand from the US$2.7 billion in 1995 to US$ 5.8 billion (+ 16%) in 2001 and US$ 13.billion (+18% by 2006).

Þ                  There could be sharp dip in the growth rate in the population in India, which is already down to about 1.7% year and is projected to go down further to about 1.5% by the turn of the century and to roughly 1% by2010.

Þ                  OTC Pharmaceutical business is India is expected to jump from Rs.10 billion at present to Rs.25 billion by 2002.

Þ                  Indian’s per capita expenditure for healthcare remains Rs.115.5 compared to the US (Rs.6876.00) and Japan (Rs.14, 832).

Þ                  In India the values for pharmaceutical production of bulk drugs and formulations in 1995-96 were US$499 million and US$ 2.5 billion respectively.

Þ                  The Indian Pharmaceutical market ranks about 20^th in the world and accounts for less than 1% of world market.  It is expected by 2003; the market could be worth of $ 7-9 billion (Rs.280 billion to Rs.360 billion).

Þ                  India accounts for 6% of all bulk drugs export.   There are about 250 large/medium units and about 8000 small-scale units in operations, which form the core of the industry.   There are about 350 bulk drugs i.e. active pharmaceutical molecules having therapeutic values and used for production of pharmaceuticals, which accounts for, majority of formulations produced in the country.

Þ                  During the year ending March 1998, pharmaceutical companies for various bulk drugs, formulations and intermediates filed 265 IEMs.  These IEMs are expected to generate employment for about 19000 people and there would be an investment of approximately Rs.4.1 billion on these projects.  During the same period foreign investment proposal worth approx. Rs.1.6 billion were approved.

Þ                  Between August 1991 and March 1998, Gujarat received 5174 proposals for the projects and topped the list in terms of value of investment, which was estimated to be Rs.1379 billion during that period.   Next to Gujarat was Maharashtra and other States receiving more than 5% of the investment proposal are Tamil Nadu, Andhra Pradesh, Karnataka, Uttar Pradesh, Punjab and Madhya Pradesh.

Þ                  The top 12 companies in India together will have a turnover of around 50 billion in the domestic market by 2005, or approximately 25% of industry turnover.  About half a dozen companies with a turnover of Rs.35 billion by 2005 will be able to spend about 8% of their turnover on research.

INDIAN HEALTH INDICATORS

THE GUJARAT SCENARIO.

Þ      Gujarat accounts for about 40% of pharmaceutical production .

Total 4196 manufacturing units engaged  in manufacturing of Allopathic, Ayurvedic, Homeopethic