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Pharmaceuticals industry in India is growing at stronger pace after the
marginal slow down due to global economic conditions. Industry witnessing strong
growth in both domestic and exports markets too. Domestic market for the first
nine months of current fiscal has grown 17.2%.
Meanwhile, the domestic pharma industry is in the consolidation mode in the last
18 months. The consolidation started with Daiichi Sankyo's acquisition of
majority stake in Indian Pharma majors Ranbaxy Laboratories [ Get Quote ].
Recently, Orchid has sold his generic injectable business to Hospira.
With poor output from R & D Pipeline, MNCs players are looking to cut down their
costs to maintain profits. The big global pharma players are shutting down their
high costs manufacturing facilities and outsourcing their manufacturing
pipelines to BRIC [ Images ] countries in general and India in particular.
So the demand for CRAMS business has started picking up. At the same time, they
are also entering into generic business segment by tie up with low manufacturing
countries as block buster drugs worth of USD 100 billion are expected to come
out of patent in the next five years.
For Instance, Pfizer-Aurobindo, GlaxoSmithKline-Dr Reddy's Laboratories and
Pfizer-Strides Arcolab have signed agreement to generic product. Former will be
supplying the drugs and later will be manufacturing the products.
Current duty structure
| |
Excise duty |
Custom Duty |
| |
Present |
Proposed |
Present |
Proposed |
| Life Saving Drugs/Essential Medicines |
Nil |
Nil |
5% |
0% |
| Drug Intermediates and Bulk Drugs |
8% |
4% |
7.5% |
7.5% |
| Formulation |
4% |
4% |
10% |
5% |
Source : business.rediff.com