India Pharmaceutical Industry SWOT Analysis

 India Pharmaceutical Industry SWOT Analysis

SWOT Analysis

India Pharmaceutical Industry SWOT
Strengths	Massive pharmaceutical market growth potential, highly reliant on modernisation and reform. Strong local manufacturing sector with leading domestic players establishing a notable international presence. Low-cost but skilled English-speaking labour force. Long-established trade patterns with Western Europe and the US. Swift market approval times.
Weaknesses	Among the least-developed pharma markets in Asia with extremely low per-capita consumption. Opaque and biased government drug pricing and reimbursement policy. Underdeveloped healthcare infrastructure. Vast regional disparities in healthcare coverage. Lack of comprehensive drug reimbursement. Movement away from original drug research will lower future margins. Many multinationals already selling their products at reduced prices.
Opportunities	Robust generic and OTC drug market growth, with the latter benefiting from expected liberalisation of sales channels. Large and growing population boosting pharmaceutical and medical demand. Underdeveloped market for chronic illnesses and diagnostics. The recognition of pharmaceutical patents from January 2005. Rising demand for generic drugs in its Asian neighbours, and globally. Ongoing free trade agreement (FTA) negotiations with the Association of South East Asian Nations (ASEAN) group of countries. Increased demand for active pharmaceutical ingredients (APIs) produced in India. Increasing research and development (R&D) activity by domestic firms. Global expansion of larger local companies. Increased public funding for disease eradication programmes. Political changes in the US to promote use of Indian generic drugs.
Threats	Failure to properly enforce World Trade Organization (WTO)-compliant patent legislation for drugs. Considerable counterfeit drug industry. Government failure to revise its opaque and discriminatory pricing and reimbursement policy. Need for overhaul of healthcare delivery structures hampering better access to medicines. Government plans to impose further price controls on essential medicines. India's patent laws threatened by litigation. Manufacturing problems pose threat to Indian generic exports, especially to the US. India is the fourth largest market in the Asia Pacific region, behind Japan, China and South Korea. However, US$16 per-capita spending is among the lowest in the world, similar to the levels of Pakistan and Vietnam. Pharmaceutical expenditure in 2010 was 1.13% of GDP, which is just below the global average of 1.44%. Generic drugs will continue to account for the vast majority of drug consumption in India (at around 80% of total spending), largely owing to the low cost and limited purchasing power of most of the population. A substantial amount of the Indian generic drug market comprises illicit products, due to the country's lax patent laws. However, conditions are quickly changing for the better. In recent years, India has begun to export large amounts of generic drugs to the international market, which has proved highly lucrative. The separation of the prescription and OTC medicines remains problematic, given the large volume of prescription drugs available over the counter as well as the presence of counterfeit drugs. The development of the healthcare system should improve the situation with the respective sectors gradually becoming more clearly defined. While prescription drugs account for approximately 89% of sales, the share of drugs prescribed by a doctor is likely to be far lower. Traditional and ayurvedic medicines very popular; however, these types of interventions are not included in our pharmaceutical market calculation. Alimentary tract, antibiotics and respiratory drugs are some of the most prominent prescription segments, as are cardiovascular and nervous system remedies, with vitamins leading the OTC sector. India accounts for almost 10% of global drug production by volume and is increasingly focusing on indigenous R&D. There are about 3,000 pharmaceutical manufacturers, the vast majority of which focus on generic drugs. India is home to 250 large manufacturers, and the domestic drug industry employs a workforce of approximately 460,000 people. However, underproduction of essential drugs is a considerable problem in India, which has led to an increase in imports of these products, despite strict price controls.