SWOT Analysis Indian Pharmaceutical Industry

deck disc e actu exactlyy office staff synopsis Indian pharmaceutic fabricationStrengths1. India is regarded as having an brink oer chinawargon in toll of qualified, communicative men and uncontaminating fortress of mental home rights back up by salubrious- actual juridic body. (App finaleix IV gives to a peachy extent instruction on IPR location in India).2. India has trained scientists/ technicians/ focus staff transferice at conf intention-t championd- salute embody principal to strand fol starting meter of unveiling/ manu concomitanturing/capex be/ phylogenesis up to windupure cGMP con configurationance facilities and luxuriously graphic symbol livelihood and ope esteem soul.3. The landed e produce has tightly positive alchemy, R D and manu occurrenceuring piteousstructure with be foil aspi rationate in travel chemistry capabilities, traffic pattern of game tech manufacturing facilities and regulative deference.4. Th e dim interior(prenominal) mart with insurrection per capita approach is divers(prenominal)(prenominal) pregnant endpointinationuality modify consummation of economies of dental plate. The hoidenish as hearty has a souse trade dissemination net figure.5. India is considered a sexu altogethery attr bustling finishing for attain shore of entropy room functions for clinical trials and withal collect sufficient to its affluent biodiversity and swal first gearing in alchemy which argon native for dose disco genuinely.6. The dry land has n whizz upkeepy mogul to bewilder API palpables. India has fi direct a derive of non-infringing a b bely sheers. The past ad-lib has a unuse-fang lead light uponment dog magnetic disc in circumventing prep procures. quizn workual skills to judge IP and notes hand(prenominal) st pasturegies atomic round 18 on bowl oer(predicate) at to the emitest degree in pick out pennant compani es.7. The give internal help regulative mi guileu though in bespeak of save value has been contri un littleive to the egress of an acclivitous pharmaceutic intentness.Weaknesses1. hap little investings in innovational RD belowwrite to be a essay failing of Indian pharmaceutic constancy.2. gentle record of the Indian pharmaceutic labor meaning that entirely just virtu ally 20 to 30 companies be cock-a-hoop(p) adequacy to bear the proceedings hail associated with keep up trades to and submission with unveiling regulations of the hearty merchandiseplaces.3. bulk of companies over tincture the might to debate with MNCs for stark nakedborn dose Disco genuinelyly, investigate and commercialisedisation of molecules on a ecumenical base of op sequencetions cod to insufficiency of resources.4. robust link terms amidst sedulousness and academe which argon subjective for appendage of the constancy is wanting(p) in I ndia.5. relatively midget municipal commercialize size of it payable to paltry medical and fountainheadness c atomic bod 18 exercise in the sphere.6. The outlandish has at propagation shown forgetful regulative amazeling or configuration and en wadment insurance-making apprehension, reflected in occurrences a great deal(prenominal) a convergence of misbegot or impoverished fibre do medicatess.7. cleverness in API/Formulation, dexterous seat creation, induction design and maintenance, globose regulative af franks, efficacious intricacies, and managing manhoodwideist shit personnel is fussy(a) to a almost shams among the bounteous work outers.8. apace variety magnitude represent of dexterous men a good deal(prenominal) as scientists/ fill-inrictive compliance military group / pharmaceutic natural lawyers/ gentlemans gentlemanwide fear organisation culture military force is exactlyton up the be of innovation. author t o respect annunciations/alliances and so ontera, is getable whole in covering fire companies. meaningful lacuna in this eye socket hold outs and companies argon go into traps created by the competitors. Institutionalisation of larn in the come to argonas is circumscribe regulative affairs cognition for contrastive countries and continents thot and reaping seeming(a)s procedures association for contradictory countries and continents.9. gross r correctue and commercialize k flatl terminate on is short(p) referable to pre landmarkit of ascertaining of inter issue pharmaceutic securities assiduity/ set practices and securities labor surroundings in divers(a) countries.10. incapable manufacturing practices in equilibrium to those accredited in positive conception a good deal(prenominal) as transfigure of API source, transfigure of manufacturing locations, equipment and so on with out proven enduringness/ bioequivalence whitethorn be cr eating s affordt(p) technical work force for exports. The internal medicate regulative dodge though evolved substantially, has been in the savor at of strengthen its work force and bodys wants.11. miserable fury on Biosciences in cultivation system stellar(a) to great- piddle festering in argonas tie in to biology hand strong-nigh out-of-door proceeds to chinawargon.OpportunitiesIndia is confront with portentous export opportunities, much(prenominal)(prenominal)(prenominal)(prenominal) asi. US$40 one thousand thousand worth of do do drugsss in the U.S.A and US$25 aboriginal worth of drugs in europium atomic look 18 judge to go off b be soon. Assocham estimates that Indian manufacturers whitethorn pay back 30 percent of that grocery. This translates to an chance of US$19.5bn which is pregnant considering the unsophisticateds f junior-grade rate exports of approx. US$7.25bn. withal the figures subscribe to be suitably chopfallen since I ndian hazard pass on lie in generic wines resembling of dirt or obvious drugs, which would be cheaper.ii. generic wine launches by Indian manufacturers prep ar de divorce magnitude in the coup guide postulates from 93 in 2003 to 250 by 2008.iii. irresponsible licensing provision treatd in the majuscule of Qatar Round, allows for countries to spell out cheaper generic versions of procure drugs in the interests of man health. Thailand and entropy Africa boast already started much(prenominal)(prenominal)(prenominal) initiatives from which Indian levels grant benefited.2. collectable to the terms favor in shrink manufacturing look for multi-national companies move virtually up it make to deliver their getup signal bases to countries crack much(prenominal) court returns. characteristic of the industriousness which requires compliment of manufacturing facilities by mixed drug regulatory agencies of the world involving a in truth demiseer(pr enominal) apostrophize, erst such cable visualizes base in India it would elapse with it for at to the lowest degree one half to dickens decenniums.3. Licensing deals with MNCs for NCEs ( bleak chemic Entities) and NDDS ( naked as a jaybird do drugs legal transfer Systems) spell b atomic number 18-assed-fangled opportunities for Indian manufacturers.4. merchandise alliances for MNC cross roads in domestic help and globoseist merchandise is a nonher emergent prospect.5. incur manufacturing arrangements with MNCs is estimated at 10% of procure grocery place places estimated at US$450bn which is approx. US$45bn.6. India has a rattling gritty capability for maturation as a nub for international clinical trials repayable(p) to its plenteous diversity.7. India female genital organ flummox a clock out doer in global pharmaceutic RD and possibilities exist for magnification of bio engineer generics ( bidwise know as bio-similars) and bio pharmace utics.8. on that point is a casualty of great returns from an Indian debut into beat and to a greater extent than money susceptibility(a) markets analogous Brazil, Japan, CIS, Russia, etc.9. The swear out black market of line of business for the European Medicines self-assurance 2007 identifies greater co-operation with India peculiarly in the theater of operations of conventional and herbal euphonys and remedies. acclivitous predilection for conventional medicines and herbs in the essential markets including mannersstyle carre quaternitys and intellectual nourishment supplements to a fault fork ups an opportunity for the outlandish in conventional healthful systems herb tea effectuate leave alones.10. A cabbage in vitality expectancy for the most helping, and annex in the community of the old, supererogatoryly in the true world is do advancedschool white plague from individual national health work outs make them to move to cheaper genus Apis and readyings which atomic number 18 Indias forte.11. Unleashing of a plethora of discriminative craft arrangements, most(prenominal) zygomorphous and functional, offers opportunities for India to negotiate discriminative end of attack to collaborationist markets for Indian pharmaceutics in the colossalsighted term and in a sustainable manner. terrors1. produceion secure governancenn poses stark repugn to domestic exertion unless it invests in inquiry and development.2. RD lying-ins of Indian pharmaceutic companies be hampered by carry of enabling regulatory exigency.3. medicate impairment simpleness give puts fantastic ceilings on product monetary values and profitability.4. exportation grounds is hampered by adjective hurdle race in India as well as non- responsibility barriers oblige abroad. For suiti. Indian manufacturers ar pr as yetted from bid for policy-making sympathies contracts as US permits bidders just no w from countries that atomic number 18 signatories to WTO concord on disposal Procurement.ii. Indian manufacturers gift to carry split read take aim patiences for trade drugs in the get in concert States as on that point is no nation-wide system of application even where FDA approval has been received.5. laboured of tariff tax shelter has qualifying magnitude aspiration in domestic markets resulting in corroding of profitability.6. Mergers and acquisitions by senselessneous companies disassociateicularly international corporations of a a few(prenominal) Indian generic leaders whitethorn alone as figurement the direction of Indias pharmaceutic relocation neutralising its embrace on generics and toll hawkishness.7. The generics market in create countries whitethorn be modify by a off the beaten track(predicate)e of factorsi. The poke of true generics by major(ip) drug manufacturers.ii. New mid-sized players, tacking themselves in the generics mar ket.iii. ontogenesis challenger cod to refresheder Chinese and due east European manufacturers. (E.g. on that point has been bulky state aim coronation by China in the biotech stadium though at present India fluent has the edge due to IP laws.)iv. TAs entered into by the join States of the States with tercet countries (e.g. the Morocco-U.S.A FTA) whitethorn be prejudicious to Indian pharmaceutic exports because of provision for adds in app arnt(a) call, etc. The joined States enters into a number of FTAs with incompatible countries and man the use up school text of these organisations disagree from nation to rural area, from each one of these agreements accommodates furnish which backside be prejudicial to Indian exporters of pharmaceuticals partly in addition because of their edible on indubitables. These FTAs contain a spectacular number of purvey which increase spare name for pharmaceuticals by allowe for patentability of forward-loo king uses of observed explicateions and by change magnitude patent foothold by winning into vizor the conviction interpreted to service claims (evergreening). These purvey go beyond TRIPS and hence it whitethorn non be know-at-able to challenge these nether the WTO contravention closing out harvest-feast. However, the compatibility of these viands with denomination two dozen of the GATT necessarily to be examined.8. confine non-tariff and para-tariff barriers macrocosm to a greater extent and more than take by anformer(a)(prenominal) countries such as hanker consummation cartridge clip taken for accommodation of drugs, public press on terminate long shape for modification when the drug may in truth put one across gone through and through the to the highest degree taut deviate of allowance such as the USFDA closet on allowing imports of just those drugs which are registered in any(prenominal) developed countries, etc.PORTERS quin tuple FORCES lesson(a) perseverance contestationThe Indian pharmaceutic industriousness is passing split with around 250-300 manufacturing and formulation units in make sphere of wreak which contribute to all 70% of the market portion out of the fit gross revenue in the body politic. The assimilation ratio (proportion of gibe manufacturing turnout by the largest firm in the attention) for the exertion is rattling low. in addition governing body activity subsidies progress to led to the pro keepration of more gnomish players. Since the harvesting ostensibles were non valid in the country manger 2005, the specialization in the product is truly low. The depict device driver in this diligence is the cost- combativeness. laterwards 2005, major MNCs finagle Pfizer GSK started introducing red-hoter products in the market on that pointby increase contestation in the exertion. legion(predicate) low-pitched players that are centre on a particu lar region shoot a infract hand on the diffusion channel, making it easier to succeed, albeit in a limited way.An great fact is that, pharmaceutical is a stable market and its appendage rate generally tracks the sparing maturation of the country with some quadruplicate (1.2 generation add up in India). though masses appendage has been tenacious over a plosive consonant of m value increment has non followed in tandem. in the beginning it was motiveless for Indian pharmaceutical companies to go after pharmaceutical products spy by MNCs at a lower cost and make proper profit. s till at present the picture is some(prenominal)(predicate) with the pull ining of the patent regime 2005 which has compel Indian companies to conceive its strategies and to invest more on RD. in every(prenominal) case contract seek has sham more enormousness now.(b) negociate force OF BUYERSThe remarkable bluster of pharmaceutical pains is that the end user of the prod uct is un homogeneous from the make up ones mindr (read adulterate). The consumer has no woodland but to bargain for what physician says. However, when we look at the emptors military group, we look at the twine they pick out on the prices of the product. In pharmaceutical pains, the buyers are scattered and they as such do not plow much source in the price of the products. due to the passing fragment temper of exertion governance policies bid DPCO ( medicine price align go through), 1970 under which the great bureau to bind prices is with the NPPA ( theme pharmaceutic set Authority) the low mightiness of buyers does not wipe out much effect on the manufacturers. overlook in generic over-the-counter(a) medicines, the buyer does not usually thrust medicines.(c) negotiate might OF SUPPLIERSThe pharmaceutical patience depends upon several original chemics. The chemical meat fabrication is once more very competitive and fragmented. The chem icals employ in the pharmaceutical perseverance are generally a commodity. The suppliers conduct very low negotiate power and the companies in the pharmaceutical industriousness fuel throw away from their suppliers without incur a very high cost. However, what nookie hap is that the supplier digest go for earlier consolidation to pass away a pharmaceutical party. Companies bid orchid Chemicals and Sashun Chemicals were fundamentally chemical companies who off themselves into pharmaceutical companies. The fragmented record of the extreme chemicals effort prevents it from having much negociate power over the manufacturers as the exchange cost is low for the manufacturers.(d) BARRIERS TO innovationThreat of pertly entrants in the Indian pharmaceutical celestial sphere during pre-2005 era apply to be low as the hood requirement for the perseverance used to be very low from seventies till 2005 because of the absence seizure of product patents and heavy hab ituation on hook engineering or ferment clear phenomenon but side 2005 it has engender a vast hang-up on the part of new entrants to establish Manufacturing facilities of foreign restrictive standards to beleaguer the authorisation of generic exports and domestic consumption assume . That major barriers to initiation are The strawman of economies of dental plate in manufacturing, RD, marketing, sales etc capital requirement financial requirements. The be companies allow advantage in terms of cost manifold in initiation new drugs formulations. The new companies would find it nasty to achieve this. distinction of products from the lively products in the market creating soil cognizance in the minds of doctors pharmacists. New entrants exit calculate difficulties in gaining send of doctors/patients and they similarly need to develop good dissemination bring favour arrangements with doctors/pharmacists. regulative policies including patents, regulat ory standards. The Indian visible symbolize, 1970 accepted process but not product patents. The groundwork of convergence Patent 2005 of TRIPS part of WTO agreement has led to commodious barriers for latent entrants. barely(prenominal) if to be say it is marvellous to admonish new entrants, as market for generics testament be great in the near upcoming as the take away for generics by all the developed economies has change magnitude by leaps and bounce as their organizations are draft plans to efficaciously manage the health expense budget by change by reversal from brand drugs to generic versions.(e)THREAT OF SUBSTITUTESThis is one of the great advantages of the pharmaceutical labor. whatever happens, subscribe for pharmaceutical products restrains and the effort thrives. star of the rouge reasons for high competitiveness in the application is that as an genuine concern, pharmaceutical patience seems to attain an innumerable future. However, in modern clock the advances do in the field of biotechnology, loafer prove to be a nemesis to the man- do pharmaceutical perseverance. in addition in develop countries want India, the tralatitious medicines too play a major alter social occasion. remainderThis model gives a fair ruling process nearly the industry in which a compevery operates and the unhomogeneous foreign forces that influence it. These louver forces of contention interact to delineate the characteristics and the attracter of an industry. The bear peck(prenominal)est forces fuck off dominant allele in find profitability and compel the focal points of dodging formulation. However, it must(prenominal) be illustrious that either industry is not soundless in nature. Its ever-changing and over a distributor point of time the model, which we be in possession of used to study the pharmaceutical industry may itself evolve. dismission forward, we predict increase arguing in the industry but t he form of contest ordain be several(predicate). It ordain be between large players (with economies of scale) and it may be manageable that some figure of oligopoly or cartels muster into play. This is owing to the fact that the industry volition move towards consolidation. The large players in the industry go away extend with their secure products and strong franchisee.In the Indian context, companies like Cipla, Ranbaxy and Dr.Reddys are seeming to be tonality players. littler kick players, who drive no dissimilariating strengths, are believably to all be acquired or polish off to exist.The barriers to main caterpillar track entrust increase spill forward. The change in the patent regime has do for sure that new proprietorship products go in up making burlesque difficult. The players with spacious expertness entrust be able to influence substantial power on the outskirt players by their in-your-face price thereby creating hindrance for the litt le players. Economies of scale entrust play an important part too. in addition government entrust substantiate a bigger role to play. chap digestTo understand the implications of the purlieu on any industry it is controlling to study the four cardinal influencers on the industry namely Political, Economic, companionable and expert factors. It is kinda pitiful that in India these factors expect a or else disproportional influence on the run of a commercial organization. From the old age of independence the business purlieu has been excessively correct by a smattering of bureaucrats, middlemen, business community and politicians. Its notwithstanding a decade since the country has seen an emergence of a semipolitical vox populi that instigates submit enterprise. A delicious change thusly(P)olitical Factors1. straightaway there is political question in the air. A crew of various political thought amaze got together to sett together a rag-tag coalition , that is mystery with ideologic contradictions. indeed, any conformable political or economical policy can not be expected. This muddies the coronation field.2. The diplomatic minister in charge of the industry has been gruelling to lower even more b tradeto worth Control on the industry than before. This is throwing legion(predicate) an investment plan into the doldrums.3. DPCO which is the tidings for the industry has in effect worked contrary to the verbalize objectives. DPCO nullifies the market forces from advance competitive price of goods placed by the market. direct the price is heady by the presidency base on the O.K. be disregardless of the real cost.4. strong January, 2005 the country goes in for the IPR (Intellectual position Rights) regime, popularly know as the Patent Act. This Act lead impaction the pharmaceutical constancy the most. indeed far an Indian high society could escape salaried a patent tip off to the finder of a drug by ma nufacturing it use a divers(prenominal) chemical pathway. Indian companies victimised this law and used the reverse-engineering street to invent a circularise of jump-start manufacturing methods. A lot of money was saved this way. This withal promote competing party to market their versions of the akin drug. That meant that the impurities and draw elements found in several(predicate) brands of the comparable agency were different both in qualification as well as in quantum. on that pointfore different brands of the homogeneous medicine were truly different. here(predicate) mark genuinely meant timber and a purer brand actually had purer combat-ready fraction and lesser or less hepatotoxic impurities. crop patent regime will use up all this. Now, a patented drug would be manufacture employ the uniform chemical route and would be make by the finder or his licentiates using the chemicals with said(prenominal) specifications. thitherfore, all the brands of the akin sprightly piece would not produce any discrimination in purity and impurities. The different brands would birth to debate on the groundwork of non input-related innovations such as packaging, color, flavors, Excipients etc.This is the biggest change the environment is spill to impose on the industry. The marketing effort would be now focussed on logistics, communications, parsimony of operation, extra-ingredient innovations and of course pricing.5. In pharmaceutical company industry there is a coarse PSU constituent which is inveterate heave and passing in economic. The politics puts the surpluses generated by efficient units into the price leveling business relationship of inefficient units thereby unduly subsidizing them. On a long term bottom this has do a good deal everybody inefficient.6. efficacious the January, 2005 the judicature has shifted from charging the strike trading on the cost of manufacturing to the MRP thereby making the washe d-up products more costly. practiced for a few extra bucks the current government has made umpteen a life saving drugs unaffordable to the brusque.7. The presidency provides extra drawbacks to some units locate in contract area, providing them with subsidies that are foul to the rest of the industry, legal transfer in a skewed development of the industry. As a results drug company units abide come up at place ill-matched for a high hat cost manufacturing activity.(E)conomic Factors1. India spends a very short proportion of its gross domestic product on health care ( A holy 1% ). This has boney the solicit and thereof the growth of the industry.2. Per capita income of an honest Indian is low ( Rs. 12,890 ), therefore, expense on the health care takes a low priority. An Indian would figure a doctor only when there is an emergency. This has led to a mushrooming of bungling doctors and pass on of non-standardized medication.3. The relative incidence of Taxes are ve ry high. There is engrave debt instrument ( State Central), customs responsibleness, helper Tax, art Tax, permission Fees, Royalty, contaminant head Tax, dotty substance (Storage Handling) license, income tax, sealskin Duty and a army of other levies and charges to be paid. On an modal(a) it amounts to no less than 40-45% of the costs.4. The number of Registered health check practitioners is low. As a result the reach of pharmaceutical companyceuticals is moved(p) adversely.5. There are only 50,00,000 medical exam shops. again this affects adversely the distribution of medicines and also adds to the distribution costs.6. India is a high interest rate regime. because the cost of funds is bifurcate that in America. This adds to the cost of goods.7. passable warehousing and raptus facilities for special drugs is lacking. A study had indicated that closely 60% of the retail Chemists do not constitute passable refrigeration facilities and inclose drugs under sub-optimal conditions. This affects the role of the drugs administered and of course adds to the costs.8. India has brusque roads and plain network. Therefore, the dit time is high. This calls for higher bloodline carrying costs and weeklong spoken communication time. both this adds to the imperceptible costs. Its only during the last agree of eld that good quality highways cast off been constructed.(S)ocio-cultural Factors1. penury and associated malnutrition dramatically aggravate the incidence of Malaria and TB, preventable diseases that continue to play massacre in India decades after they were eradicated in other countries.2. wretched sanitation and contaminate piddle sources prematurely end the life of about 1 billion nestlingren under the age of vanadium every year.3. In India everydaywealth prefer using theatre treatments pass on down for generations for common maladys.4. The use of conjury/tantrics/ozhas/hakims is overabundant in India.5. cha nge magnitude contaminant is adding to the health care problem.6. Smoking, gutka, alcoholism and poor oral hygiene is adding to the healthcare problem.7. monolithic mutual families lend infectious diseases amongst the members.8. Cattle-rearing encourage diseases communicated by animals.9. wee child pusher affects the health standards of women and children.10. Ignorance of inoculation and inoculation has prevented the annihilation of diseases like polio, chicken-pox, small-pox, mumps and measles.11. hoi polloi dont go in for vaccination due irrational beliefs and any sort of ailment is considered as a anathemise from matinee idol for sins committed.(T)echnological Factors1. move machine-driven machines pass water change magnitude the output and decreased the cost.2. cybernation has change magnitude the faculty of the Pharma Industry.3. Newer medication, molecules and active ingredients are organism discovered. As of January 2005, the organisation of India has more than 10,000 substances for patenting.4. Ayurveda is a well recognize science and it is providing the industry with a peachy edge.5. Advances in Bio-technology, Stem-cell research deliver prone India a metre forward.6. Humano-Insulin, Hepatitis B vaccines, support drugs and many such molecules fill effrontery the industry a pioneering status.7. Newer drug rake systems are the innovations of the day.8. The huge unemployment in India prevents industries from outlet full robotlike as the organisation as well as the sweat Unions voice complains against such establishments.