A

Management Research Project

ON
“Strategic Analysis of Pharmaceutical Industry”

Submitted to:
Department of Business Management
Sankalchand Patel College of Engineering, Visnagar

In Partial Fulfillment of the Requirement of the Award for the Degree Of

MASTER OF BUSINESS ADMINSTRATION

IN
SANKALCHAND PATEL UNIVERSITY

Under the guidance of:

Prof. Shakti Dodiya

Submitted by:

Pandya Riddhi D. 2021095900017561

Rami Tithi K. 2021095900019246

Batch 2021-23 MBA Semester-II

i
 STUDENT DECLARATION

We the undersigned, Pandya Riddhi and Rami Tithi hereby declare that this major
research project titled “Strategic Analysis Pharmaceutical Industry” is a result of
our own work and our indebtedness to other work publication, references, if any,
have been duly acknowledged. If we are found guilty of coping any other report
or published information and showing as our original work, we understand that
we shall be liable and punishable by SPU, which may include ‘ fail’ in
examination , ‘repeat study & re- submission of the report’ or any other
punishment that SPU may decide.

PRN No. Name Signature

Pandya Riddhi D. 2021095900017561
Rami Tithi K. 2021095900019246

Place: Visnagar
Date:

ii
 INSTITUTE CERTIFICATE

This is to certify that the Management Research Project titled as “strategic

Analysis of Pharmaceutical Industry” is the bonafied work of students, who
carried out their research under my supervision. I also certify further, that to best
of my knowledge the work reported herein does not from part of any other
project report or dissertation on the basis of which a degree or award was
conferred on an occasion on this or any other candidate.

Name & Signature of Guide Name & Signature of Head

iii
 PREFACE

This project report has been prepared in fulfillment of the requirement of the
MRP:-1 “A strategic Analysis of Pharmaceutical Industry” in academic year 2022-
23.

We, Riddhi and Tithi Prepare report with the help of secondary Data available
online.

The purpose of this report is to know the pharmaceutical industry in India and
future opportunities in industry and upcoming challenges of industry.

iv
 ACKNOWLWDGEMENT

We are indebted to HOD, MBA Department, and SPCE for providing an

opportunity of preparing this project report and allowing us to use the resources
of the institution during this project.

We are also thankful to the other faculty members of MBA Department, SPCE for
extending their valuable support for this project.

We are also grateful to Prof. Shakti Dodiya for valuable and helpful Guidance in
our MRP.

Finally we would also like to thank our family members, who are always a source
for inspiration for us, for showing their understanding, patience and for all their
possible help for the preparation of this project.

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 EXECUTIVE SUMMARY
The Indian Pharmaceutical industry is expected to grow upto USD 100 billion by
the end of 20251 Pharmaceutical exports from India stood at USD 24.44 Billion in
FY 2020-21.2 The Indian biotechnology industry was valued at USD 64 billion in
2019 and is expected to reach USD 150 billion by 2025.3 India also has the largest
number of manufacturing sites approved by the United States Food and Drug
Administration (US FDA) outside of the United States.4 The industry is typically
involved in four types of businesses: marketing of generic medicines, marketing
of branded generic medicines, marketing of innovator medicines and
manufacture and supply of active pharmaceutical ingredients, which are used as
ingredients in medicines as well as finished formulations. The COVID-19
pandemic also had a significant impact on the Indian pharmaceutical industry.
The pandemic has both spurred and curtailed the growth of the industry in
different instances. In some cases, it has led to growth in drug manufacturing
backed by demand from the government and individuals alike for drugs that may
be used in the treatment of COVID-19. It has also led to significant investments in
India’s vaccine manufacturing and supply chain to enable efficient delivery of the
vaccine to all Indians. However, for non-COVID related drugs, prices of raw
materials have increased, production schedules have been interrupted, factories
have been shut down and shipping costs have increased. Overall, the Indian
pharmaceutical industry include SWOT Analysis, PETSTEL Analysis and five force
model

The coming decade is expected to bring new highs for the pharmaceutical sector.
Backed by strong intellectual property and regulatory framework, the Indian
pharmaceutical industry seems poised on the edge of success.

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 Table of Content
Chapter Particular Page
Number Number
Preface
Acknowledgement
Executive summary
1 Introduction 1
1.1 Introduction of Pharmaceutical Industry 1-2
1.2 Pharmaceutical Market Overview 2-3
1.3 Market Size 4-5
1.4 Investment and Recent Development 5-7
1.5 Government initiatives 7-8
1.6 Road Ahead 8-9
1.7 Historical Background 9-13
1.8 What is a Pharmaceutical? 14-17
1.9 Global Scenario 18-19
1.10 Regulatory Framework 20-23
1.11 Top 10 Pharmaceutical companies in India  24-27
2 Research Methodology 28-29
3 Data Analysis 30
3.1 SWOT Analysis 31-35
3.2 PESTEL Analysis 36-37
3.3 Five forces Analysis 38-39
4 Conclusion 40-41
BIBIOGRAPHY 42

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Chapter - 1
Introduction

1
1.1 Introduction of Pharmaceutical Industry :-

India is the largest provider of generic drugs globally. Indian pharmaceutical

sector supplies over 50% of global demand for various vaccines, 40% of generic
demand in the US and 25% of all medicine in the UK. Globally, India ranks 3rd in
terms of pharmaceutical production by volume and 14th by value. The domestic
pharmaceutical industry includes a network of 3,000 drug companies and
~10,500 manufacturing units. India enjoys an important position in the global
pharmaceuticals sector. The country also has a large pool of scientists and
engineers with a potential to steer the industry ahead to greater heights.
Presently, over 80% of the antiretroviral drugs used globally to combat AIDS
(Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical
firms.

Indian pharmaceutical industry can be broadly divided into two periods, the pre-
patent regime (before 2005) and the post-patent regime. While the pre-patent or
process patent regime helped the industry develop into a world-class generics
industry, the post-patent or product patent regime is aimed at encouraging new
drug discoveries over the long-term. However, the launch of patented products in
India has been slow. India gained a foothold in the global arena, with reverse-
engineered generic drugs and active pharmaceutical ingredients (API) and now
seeks to become a major player in outsourced clinical research and the contract
research and manufacturing services (CRAMS) segments.

The pharmaceutical industry plays a significant role in developing vaccines and

medications for prevention and reduction in disease incidence, treatment of
ailments and enhancement in quality of life by contributing to innovative
research and engaging in technological advancements to meet the complex
healthcare demands of the population. The main goal of this industry is to
provide drugs to maintain health or prevent infections and cure diseases affecting
the global population. The pharmaceutical industry within the healthcare sector
comprises of different subfields of development, manufacturing or production
and marketing of medications by drug manufacturers or marketers and
biotechnology companies. The discovery, development, production and
marketing of pharmaceutical drugs or vaccines as medications administered to

2
patients aims to prevent, cure or alleviate the symptoms of different
diseases. Health supplements reduce the chance of getting sick and meet daily
nutritional requirement of vitamins and minerals.

Modern technologies and scientific advances accelerate the discovery and

development of innovative pharmaceuticals with reduced side effects and
improved therapeutic activity. Most of the drugs investigated for use in humans
undergo pre-clinical development, clinical trials and safety surveillance or
monitoring to determine the safety and efficacy before approval and launch into
the market. This industry includes number of regulatory bodies that monitor
patents, drug safety, quality and pricing of drugs. Many dynamic scientific,
legislative, regulatory, political, social and economic factors affect the
pharmaceutical industry. Practising physicians and pharmacists; academic,
government and industry scientists in hospitals, clinics, pharmacies and private
organisations can influence the pharmaceutical industry. Medicinal chemists,
molecular biologists and pharmacists can help increase potency and specificity to
improve the benefits associated with the pharmaceutical drugs. 

1.2 Pharmaceutical Market Overview :-

The evident spread of several major infections and diseases will impact the global
pharmaceutical market with expected growth of $1.3 trillion by 2020. Some of
the trends visible in the pharmaceutical industry include greater pressure on
healthcare budget enforced by rising incidence of chronic diseases; demand for
medicines in emerging economies found more compared to industrialized
economies; regulators have become more cautious about approving new and
innovative medicines; rising customer expectations continue to challenge
innovative medicines; increase in new clinically and economically feasible
alternative therapies. The growth in pharmaceutical market is seen in expansion
of medical infrastructure; doubling of disposable incomes among a number of
middle-class households; greater penetration of health insurance; rising
prevalence of diseases; aggressive market penetration and adoption of product
patents driven by the relatively smaller companies.

The average human lifespan is exposed to more infections and diseases that
require preventive approaches to maintain health and increased research to
improve quality of life among the population. Hectic daily schedules, lack of

3
exercise and sleep, unhealthy eating habits and other lifestyle choices has
resulted in poor digestion, high obesity rates, breathing difficulties and other
health problems. Globalization and urbanization are major driving forces in the
growing demand for health supplements and improved medications. Rising
number of chronic diseases have made people become more dependent on
health supplements and medications. The benefits of therapies and diagnosis
influence pharmaceutical companies towards research and development to
support patients with accurate dose, convenience and compliance to medication
regimen with increase in the incidence of chronic diseases and technological
advancements.  

1.3 Market Size:-

According to the Indian Economic Survey 2021, the domestic market is expected
to grow 3x in the next decade. India’s domestic pharmaceutical market stood at
US$ 42 billion in 2021 and is likely to reach US$ 65 billion by 2024 and further
expand to reach US$ 120-130 billion by 2030. India's biotechnology industry
comprises biopharmaceuticals, bio-services, bio-agriculture, bio-industry, and
bioinformatics. The Indian biotechnology industry was valued at US$ 70.2 billion
in 2020 and is expected to reach US$ 150 billion by 2025. India’s medical devices
market stood at US$ 10.36 billion in FY20. The market is expected to increase at a
CAGR of 37% from 2020 to 2025 to reach US$ 50 billion. As of August 2021, CARE
Ratings expect India's pharmaceutical business to develop at an annual rate of
~11% over the next two years to reach more than US$ 60 billion in value.

In the global pharmaceuticals sector, India is a significant and rising player. India
is the world's largest supplier of generic medications, accounting for 20% of the
worldwide supply by volume and supplying about 60% of the global vaccination
demand. The Indian pharmaceutical sector is worth US$ 42 billion worldwide. In
August 2021, the Indian pharmaceutical market increased at 17.7% annually, up
from 13.7% in July 2020. According to India Ratings & Research, the Indian
pharmaceutical market revenue is expected to be over 12% Y-o-Y in FY22.

4
 1.4 Investment and Recent Development :-

The Union Cabinet has given its nod for the amendment of the existing Foreign
Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI
up to 100% under the automatic route for manufacturing of medical devices
subject to certain conditions.

The Indian Pharmaceuticals industry plays a prominent role in the global

pharmaceuticals industry. India ranks third worldwide for production by volume
and 14th by value.

In this regard the sector has seen a lot of investments and developments in the
recent past.

 The Indian drugs and pharmaceuticals sector received cumulative FDIs worth US$
19.41 billion between April 2000-March 2022.

 The foreign direct investment (FDI) inflows in the Indian drugs and
pharmaceuticals sector reached US$ 1,414 million between in FY 2021-22.

 The Indian pharmaceutical industry generated a trade surplus of US$ 15.81 billion
in FY22.

 In June 2022, Cipla partnered with Drugs for Neglected Diseases initiative (DNDi)
to announce the launch of a 4-in-1 antiretroviral treatment for children living
with HIV in South Africa.

5
 Glenmark becomes the first pharmaceutical company to launch Indacaterol +
Mometasone fixed-Dose combination drug for Asthma in India.

 In May 2022, Sun Pharmaceutical Industries Limited through one of its wholly
owned subsidiaries plans to launch Bempedoic Acid under the brand name Brillo,
in India for reducing low-density lipoprotein (LDL) cholesterol.

 In May 2022, Dr. Reddy’s Laboratories enters into exclusive partnership with HK
inno.N Corporation to commercialise novel molecule Tegoprazan in India & select
emerging markets.

 In April 2022, Dr Reddy's Laboratories Ltd. inked a pact with MediCane Health to
announce the launch of medical cannabis products in Germany.

 The Union Cabinet has given its nod for the amendment of existing Foreign Direct
Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to
100% under the automatic route for manufacturing of medical devices subject to
certain conditions.

 In March 2022, Themis Medicare Ltd. (Themis), announced the approval of its
antiviral drug VIRALEX by the Drug Controller General of India (DCGI).

 The National Digital Health Blueprint has the potential to generate nearly US$
200 billion in added economic value for India's healthcare industry over the next
10 years.

 In November 2021, US-based Akston Biosciences announced that it will start the
clinical trial of its second-generation COVID-19 vaccine ‘AKS-452’ in India soon.

 In October 2021, AstraZeneca India launched a Clinical Data and Insights (CDI)
division to further strengthen its global presence and manage data-related
aspects of its clinical trials.

 In September 2021, the Indian government contributed US$ 4 billion to the

pharmaceutical and medical industries.

 In August 2021, Glenmark collaborated with SaNOtize to introduce spray for

COVID-19 treatment in India and other Asian markets.

6
 In August 2021, Uniza Group, an Ahmedabad-based pharmaceutical firm, signed
an agreement with Lysulin Inc. (an US-based firm) to introduce Lysulin, a
nutritional product for Indian consumers.

 In May 2021, Indian Immunologicals Ltd. (IIL) and Bharat Immunologicals and
Biologicals Corporation (BIBCOL) inked technology transfer pacts with Bharat
Biotech to develop the vaccine locally to boost India's vaccination drive. The two
PSUs plan to start production of vaccines by September 2021.

1.5 Government initiatives :-

Some of the initiatives taken by the Government to promote the pharmaceutical

sector in India are as follows:

 As per the Union Budget 2022-23:

o Rs. 3,201 crore (US$ 419.2 million) has been set aside for research and Rs. 83,000
crore (US$ 10.86 billion) has been allocated for the Ministry of Health and Family
Welfare.

o Rs. 37,000 crore (US$ 4.83 billion) has been allocated to the 'National Health
Mission’.

o Rs. 10,000 crore (US$ 1.28 billion) has been allocated to Pradhan Mantri
Swasthya Suraksha Yojana.

o The Ministry of AYUSH has been allocated Rs. 3,050 crore (US$ 399.4 million), up
from Rs. 2,970 crore (US$ 389 million).

 In March 2022, under the Strengthening of Pharmaceutical Industry (SPI) Scheme,

a total financial outlay of Rs. 500 crore (US$ 665.5 million) for the period FY 2021-
22 to FY 2025-26 were announced.

 India could restart deliveries of COVID-19 shots to global vaccine-sharing platform

COVAX in November-December 2021 for the first time since April 2021. The
World Health Organization (WHO), which co-leads COVAX, has been pushing India
to resume supplies for the programme, particularly after it sent ~4 million doses
to neighbours and allies in October 2021.

7
 In November 2021, PM Mr. Narendra Modi inaugurated the first Global
Innovation Summit of the pharmaceuticals sector. The summit will have 12
sessions and over 40 national and international speakers deliberating on a range
of subjects including regulatory environment, funding for innovation, industry-
academia collaboration and innovation infrastructure.

 In August 2021, Union Health Minister, Mr. Mansukh Mandaviya announced that
an additional number of pharmaceutical companies in India are expected to
commence manufacturing of anti-coronavirus vaccines by October-November
2021. This move is expected to further boost the vaccination drive across the
country.

 In June 2021, Finance Minister Ms. Nirmala Sitharaman announced an additional

outlay of Rs. 197,000 crore (US $26,578.3 million) that will be utilised over five
years for the pharmaceutical PLI scheme in 13 key sectors such as active
pharmaceutical ingredients, drug intermediaries and key starting materials.

 To achieve self-reliance and minimise import dependency in the country's

essential bulk drugs, the Department of Pharmaceuticals initiated a PLI scheme to
promote domestic manufacturing by setting up greenfield plants with minimum
domestic value addition in four separate ‘Target Segments’ with a cumulative
outlay of Rs. 6,940 crore (US$ 951.27 million) from FY21 to FY30.

 In May 2021, under Atmanirbhar Bharat 3.0, Mission COVID Suraksha was
announced by the Government of India to accelerate development and
production of indigenous COVID vaccines. To augment the capacity of indigenous
production of Covaxin under the mission, the Department of Biotechnology,
Government of India, provided financial support in the form of a grant to vaccine
manufacturing facilities for enhanced production capacities, which is expected to
reach >10 crore doses per month by September 2021.

1.6 Road Ahead :-

Medicine spending in India is projected to grow 9-12% over the next five years,
leading India to become one of the top 10 countries in terms of medicine
spending. Going forward, better growth in domestic sales would also depend on
the ability of companies to align their product portfolio towards chronic therapies

8
for diseases such as such as cardiovascular, anti-diabetes, anti-depressants and
anti-cancers, which are on the rise. The Indian Government has taken many steps
to reduce costs and bring down healthcare expenses. Speedy introduction of
generic drugs into the market has remained in focus and is expected to benefit
the Indian pharmaceutical companies. In addition, the thrust on rural health
programmes, lifesaving drugs and preventive vaccines also augurs well for the
pharmaceutical companies.

1.7 Historical Background :-

Human beings have been using “drugs” to treat illness and disease for more than
3000 years. A few dozen drugs of plant and animal origin were already recorded
in China around 1100 BCE and by the end of the 16th century the Chinese were
using at least 1900 different remedies. Today Traditional Chinese Medicine
recognises more than 13 000 drugs.
Outside China, the first known pharmacopeia, the five volumes of De Material
Medica, were written in the first century CE by Discords, a Greek botanist. Herbal
practitioners of this early period have been identified in many indigenous
populations across the globe, such as North and South America, India and
Australia. In the later mediaeval period, herbalism flourished in both the
Islamic and Christian parts of the world. This tradition continued up to the 17th
century, encompassing the work of Paracelsus in Switzerland and Culpepper in
England. Culpepper's work, The English Physician, published in 1652, was one of
the first English language pharmacopeias.
Until the 18th century the use of herbal medicines had been entirely based on
empiricism: practitioners knew what worked but not why or how. However, in
the late 18th century the foundations of pharmacology, the study of the actions
of drugs and how they exert their effects, began to emerge. William Withering in
the 1780s was one of the first people to study and isolate the active ingredient in
a herbal remedy. He isolated digitalis from the foxglove, describing its extraction
from various parts of the plant, its subsequent effects and the optimum way of

9
using it to treat patients. The science of pharmacology developed slowly during
the next century and Oswald Schmiedeberg (1838–1921) is now generally
recognised as the founder of modern pharmacology. In 1872 he became
professor of pharmacology at the University of Strasburg in Austria where he
studied the pharmacology of chloroform and chloral hydrate and in 1878
published the classic text, Outline of Pharmacology.
Coincidentally, modern organic chemistry also began to emerge at around the
same time as pharmacology. Before the 19th century, chemists had generally
believed that compounds obtained from living organisms were endowed with a
“vital force” that distinguished them from inorganic compounds. However, in
1828 Friedrich Wöhler produced the organic chemical urea, a constituent of
urine, from the entirely inorganic compound, ammonium cyanate. Although
Wöhler was always cautious about claiming that he had disproved the theory of
vital force, this event has often been thought of as the starting point of organic
chemistry. These two scientific developments in pharmacology and organic
chemistry led, amongst other developments, to the foundation of the
pharmaceutical industry in the last decade of the 19th century.
The modern pharmaceutical industry can trace its origin to two main sources:
companies such as Merck, Eli Lilly and Roche that had previously supplied natural
products such as morphine, quinine and strychnine, moved into large-scale
production of drugs in the middle of the 19th century, whilst newly established
dyestuff and chemical companies, such as Bayer, ICI, Pfizer & Sandoz, established
research labs and discovered medical applications for their products.
Nevertheless, growth was relatively modest and at the start of the 1930s most
medicines were still sold without a prescription. Almost half of them were
compounded locally by pharmacists and in many cases physicians themselves
dispensed medicines directly to their patients.

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 However, a number of major advances were made in the early part of the 20th
century. Salicylic acid, a natural constituent of willow bark, had been recorded by
Hippocrates as having analgesic properties. In 1897, scientists at Bayer
demonstrated that a chemically modified version of salicylic acid had much
improved efficacy and the product, aspirin, is still in widespread use today. In the
1920s and 1930s both penicillin and insulin were identified and manufactured,
albeit at a modest scale. The Second World War provided a major stimulus to the
developing industry, with requirements for the large-scale manufacture of
analgesics and antibiotics and increasing demands from governments to
undertake research to identify treatments for a wide range of conditions. After
the war, the implementation of state healthcare systems in Europe, such as the
UK's National Health Service (NHS), created a much more stable market, both for
the prescription of drugs and, much more importantly, their reimbursement. This
produced a major incentive for further commercial investment in research,
development and manufacture. This greater role for the state was paralleled on
both sides of the Atlantic, with increasing government regulation of medicine
production.
The post-war period from the 1950s to the 1990s saw major advances in drug
development with the introduction of new antibiotics, new analgesics, such as
acetaminophen and ibuprofen, and complete new classes of pharmaceuticals
such as oral contraceptives, big-blockers, ACE inhibitors, benzodiazepines and a
wide range of novel anti-cancer medicines.
The thalidomide scandal of 1961 triggered a complete reassessment of state
controls on the industry. New regulations now demanded proof of efficacy, purity
and safety, with the latter leading to a massive increase in the requirements and
costs of research and development, particularly in the clinical testing of new
drugs. As the barriers to entry in drug production were raised, a great deal of
consolidation occurred in the industry. Likewise, the processes of globalisation,

11
which had begun before the war, increased. This resulted in new drug
development being dominated by a small number of very large multi-national
companies and the beginning of the era of the “blockbuster” drug.
In 1977, Tagamet, an ulcer medication, became the first ever blockbuster
pharmaceutical, earning its manufacturers, GSK, more than US$ 1 billion a year
and its creators the Nobel Prize. This was followed by a succession of products,
each seemingly more successful than its predecessors. Prozac, the first selective
serotonin re-uptake inhibitor (SSRI) was launched by Eli Lilly in 1987 and
omeprazole, the first proton pump inhibitor (PPI), was introduced by Astra in
1989. Atorvastatin, marketed as Lipitor in 1996, became the world's best-selling
drug of all time, with more than US$ 125 billion in sales over approximately 15
years.
This was probably the golden age for the industry, with research producing an
apparently endless stream of increasingly successful and profitable products;
since then, the industry has been beset by a series of major problems, many of
which have yet to be solved.
chemical names to describe their molecular structure. However, although
useful to the synthetic chemist, these long and cumbersome names are poorly
suited to either the description of experimental work or for use in a marketing
context. For example, it is clearly much simpler to describe something as warfarin
rather than use its systematic name (R,S)-4-hydroxy-3-(3-oxo-1-phenylbutyl)-2H-
chromen-2-one. Consequently, during its life cycle the same drug will be
described in several different ways. Initially, as it makes its way down the
development pathway, the substance will be given a unique reference code, e.g.
Sanofi has a series of codes such as SAR391786 and SAR438037 to identify
substances in their R&D pipeline. This convention is primarily for simplicity, but it
also has the advantage of hiding any structural information about the compound
from competitors.

12
 As the drug progresses through clinical trials it will acquire a generic name,
which describes the active ingredient. Initially such names were often simple
contractions of the systematic name, but in 1953 the World Health Organization
(WHO) created the international non-proprietary name (INN) system to bring
some order into the nomenclature. Although there has been a major
improvement in generic naming, there are, however, still instances where an
active ingredient has acquired more than one generic name from different parts
of the world. For example, N-(4-hydroxyphenyl)-ethanamide is known as
acetaminophen in the USA and Japan but as paracetamol in the rest of the world.
Today, the generic name of a drug will be created from descriptors that classify
the drugs into different categories and also separate drugs within categories. The
generic name is widely used in the scientific literature and the medical profession
since it represents the specific active ingredient whereas the “common” name, by
which the drug will usually be known to the public, is the company trade name.
A drug is usually given a trade name during the later stages of its clinical trials
as the marketing strategy for the product begins to be developed. The trade
name will be protected as a trademark, it relates only to the specific company
product and will have been designed with marketing of the drug in mind. For
example, Novartis market the big-blocker, metoprolol, as Lopressor since it is
effective at lowering blood pressure. Once a drug is out of patent the same active
ingredient may acquire a large number of different trade names, which can cause
additional confusion, e.g. acetaminophen (paracetamol) is marketed as both
panadol and tylenol (and has >100 other trade names in different parts of the
world).

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1.8 What is a Pharmaceutical?

This may seem an odd question since we all surely know what a pharmaceutical
is. However, there is no straightforward scientific answer to this apparently
simple question. Pharmaceuticals are not a class of substances like phthalates or
PCBs. They have no chemical, physical, structural or biological similarities. There
is thus no scientific justification for treating pharmaceuticals collectively as a
coherent set of chemical substances.
Pharmaceuticals are often thought of as being complex chemical structures but
they can also be simple aromatic molecules like the anesthetic, propofol (2,6-
diisopropylphenol), simple aliphatic molecules like the vasodilator, nitroglycerine
(1,2,3-trinitroxypropane), or more complex but still relatively low molecular
weight molecules like the statin, atorvastatin .
In fact, the only common factor which unites pharmaceuticals is their use;
substances that we identify as pharmaceuticals are simply those substances that
we use as human (or animal) medicines. This means that, in principle, any
substance might be identified, at some point, as a pharmaceutical.
Not surprisingly therefore, many pharmaceuticals are also used for non-
pharmaceutical purposes. For example, the vasodilation properties of
nitroglycerine were only discovered by William Murrell after its invention by
Alfred Nobel as the active constituent of dynamite. Similarly, the discoverers of
warfarin ((R,S)-4-hydroxy-3-(3-oxo-1-phenylbutyl)-2H-chromen-2-one) at the
University of Wisconsin in 1948 would be amazed that at the beginning of the
21st century this rat poison is still the most frequently prescribed anticoagulant in
the world. This is not just a historical oddity. The most recent example is
dimethylfumarate, which has widely been used as a mould inhibitor. It is
interesting to note that a year after the European Union applied the new REACH
regulation to impose severe restrictions on its use as a mould

14
inhibitor, dimethylfumarate under its trade name, Tecfidera, was granted a
pharmaceutical marketing authorization in 2013 for use against multiple sclerosis.
In other words, the global inventory of chemical substances can be divided into
two groups: pharmaceuticals and those substances for which no pharmaceutical
use has yet been identified, e.g. before 2013 dimethylfumarate was not a
pharmaceutical, however, after 2013
Many commentators seem to believe that pharmaceuticals should be subjected
to different regulatory treatment because they are “designed to be biologically
active” with the implication that this criterion is sufficient to differentiate
pharmaceuticals from other substances. However, this is incorrect, being derived
from a misunderstanding about pharmaceutical development and it wrongly
implies that pharmaceuticals are uniquely biologically active by design. It would
be more appropriate to say that pharmaceuticals are selected from the many
substances that produce a specific effect in animals, including humans, based on
their overall safety.
The majority of pharmaceuticals are initially discovered using high-throughput
screening techniques capable of screening >100 000 compounds day −1, applied to
chemical “libraries” containing several million compounds. 25 The vast majority of
chemicals are known to exhibit some biological activity, so the screening assay is
designed to identify only those substances that exhibit the specific biological
activity of interest. It is not unusual for this initial screening step to generate
several hundred potential leads which then need to be refined down to 1 or 2
candidates for further investigation. All these initial potential leads exhibit the
relevant biological activity but this may be accompanied by other less-welcome
toxicological properties which must be ruthlessly screened out of the selected set
during the refining period. Thus the final candidate(s) will have the desired
biological activity, but few or no undesirable properties; the purpose of the

15
refining process is to eliminate those compounds with worse toxicological
profiles, many of which may already exist in the environment.
Thus, from an environmental risk assessment perspective, pharmaceuticals are
indistinguishable from any other chemical. They are but one class of the myriad
numbers of micro contaminants that emerged at the end of the 20th century due
to major improvements in analytical science. However, from a risk-management
point of view, pharmaceuticals as a group do need to be treated differently due
to their major direct impact on human health and wellbeing. Pharmaceuticals do
not pose any more risks to man and the environment than other chemicals, but
the risk/benefit calculations may be very different.
Finally, it is worth mentioning the way in which pharmaceuticals are named, as
this can be a source of confusion. Pharmaceuticals, as chemical substances, all
have systematic IUPAC chemical names to describe their molecular structure.
However, although useful to the synthetic chemist, these long and cumbersome
names are poorly suited to either the description of experimental work or for use
in a marketing context. For example, it is clearly much simpler to describe
something as warfarin rather than use its systematic name (R,S)-4-hydroxy-3-(3-
oxo-1-phenylbutyl)-2H-chromen-2-one. Consequently, during its life cycle the
same drug will be described in several different ways. Initially, as it makes its way
down the development pathway, the substance will be given a unique reference
code, e.g. Sanofi has a series of codes such as SAR391786 and SAR438037 to
identify substances in their R&D pipeline. This convention is primarily for
simplicity, but it also has the advantage of hiding any structural information
about the compound from competitors.
As the drug progresses through clinical trials it will acquire a generic name,
which describes the active ingredient. Initially such names were often simple
contractions of the systematic name, but in 1953 the World Health Organisation
(WHO) created the international non-proprietary name (INN) system to bring

16
some order into the nomenclature. Although there has been a major
improvement in generic naming, there are, however, still instances where an
active ingredient has acquired more than one generic name from different parts
of the world. For example, N-(4-hydroxyphenyl)-ethanamide is known as
acetaminophen in the USA and Japan but as paracetamol in the rest of the world.
Today, the generic name of a drug will be created from descriptors that classify
the drugs into different categories and also separate drugs within categories. The
generic name is widely used in the scientific literature and the medical profession
since it represents the specific active ingredient whereas the “common” name, by
which the drug will usually be known to the public, is the company trade name.
A drug is usually given a trade name during the later stages of its clinical trials
as the marketing strategy for the product begins to be developed. The trade
name will be protected as a trademark; it relates only to the specific company
product and will have been designed with marketing of the drug in mind. For
example, Novartis market the ßig;-blocker, metoprolol, as Lopressor since it is
effective at lowering blood pressure. Once a drug is out of patent the same active
ingredient may acquire a large number of different trade names, which can cause
additional confusion, e.g. acetaminophen (paracetamol) is marketed as both
panadol and tylenol (and has >100 other trade names in different parts of the
world).

17
 1.9 Global Scenario :-

The global pharmaceutical market was estimated pharmaceutical industry is

best known for manufacturing pharmaceutical drugs which aim to diagnose, cure,
treat, or prevent diseases. The pharmaceutical sector represents a huge industry,
with the global market valuing in at more than one trillion U.S. dollars. The best
known top global pharmaceutical companies are Pfizer, Merck and Johnson &
Johnson from the U.S., Novartis and Roche from Switzerland.

In 2021, the United States was still the largest single pharmaceutical market,
generating more than 550 billion U.S. dollars of revenue. Europe was responsible
for generating around 228 billion U.S. dollars. These two markets, together with
Japan, Canada and Australia, form the so-called established (or developed)
markets. The rest of the global pharmaceutical revenue is mainly from emerging
markets which include countries like China, Russia, Brazil and India. In fact, these
emerging markets show the fastest increase in pharmaceutical sales. Latin
America and the Indian Subcontinent are the world regions with the highest
predicted compound annual growth rates up until 2025.

18
Import pharmaceutical product in India :-

19
 Export pharmaceutical product from India :-

India's exports of pharma products to these countries in FY21-22

were: USA with US$ 7,101.6 million, the UK with US$ 704.5 million, South Africa
with US$ 612.3 million, Russia with US$ 597.8 million, and Nigeria with US$
588.6 million. India's pharma exports to USA in value grew at a CAGR of 6.9%
over last three years.

20
1.10 Regulatory Framework :-

1. Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules, 1945

The Central Government and the State Governments are responsible for the
enforcement of the Drugs and Cosmetics Act and Rules made thereunder. The
Central Drugs Standard Control Organization, headed by the Drug Controller
General of India, is primarily responsible for coordinating the activities of the
State Drugs Control Organization, formulating policies, and ensuring uniform
positive implementation of the Drugs and Cosmetics Act and Rules throughout
India.
The Drug Controller General of India, on the other hand, is responsible for
handling matters of product approval and standards, clinical trials, the
introduction of new drugs, and licenses for new drugs.

2. Pharmacy Act, 1948

The Pharmacy Act tends to regulate the profession of pharmacy in India including
education and practice of pharmacy. It specifies the offences while practising the
profession of pharmacy by a registered pharmacist which, as a consequence, may
lead to penal action under the Act to the extent of permanent deregistration

3. The Drugs & Magic Remedies (Objectionable Advertisements) Act, 1954 and
the Drugs & Magic Remedies (Objectionable Advertisements) Rules 1955

The Act aims to regulate the advertisements of drugs relating to diagnosis/ cure/
treatment/ prevention of certain prescribed diseases and conditions in India. It
prohibits advertisements of drugs and remedies that claim to have magical
properties and makes doing so, a cognizable offence. The term diseases and
conditions include AIDS, Asthma, Cancer etc.

4. Drugs Price Control Order, 2013

It is an order issued by the Government of India under Section 3 of the Essential

Commodities Act, 1955 and supersession of the Drug (Prices Control) Order,

21
1995. Since the drugs are essential for the health of the society, the same has
been declared as essential and accordingly put under the Essential Commodities
Act, 1955. The order provides a list of price-controlled drugs, procedures for
fixation of drug prices, method of implementation of prices fixed by the
government and penalties for contravention of provisions. It further aims to
regulate the margins offered to dealers and retailers and imposes an obligation to
sell bulk drugs and formulations to dealers (conditionally) and consumers
(unconditionally). As per the provisions of the Drugs Price Control Order, National
Pharmaceutical Pricing Authority fixes the ceiling price for medicines in the
controlled category.

5. Information Technology Act, 2000 (IT Act)

The IT Act imposes liability on such body corporate or the person who deals with
sensitive personal data or information for negligence in implementation and
maintenance of reasonable security and procedures for securitization of such
data if such negligence causes wrongful gain or loss to any person. It further
criminalises the disclosure of personal information to a third person, in the event
the same is done without the consent of the person to whom such information
belongs or in breach of a lawful contract, coupled with the intention or
knowledge that such disclosure will cause wrongful gain or wrongful loss.

6. Narcotic Drugs And Psychotropic Substances Act, 1985

Under the Narcotic Drugs And Psychotropic Substances Act, 1985, it is illegal for a
person The Narcotic Drugs and Psychotropic Substances Act,
1985ce/manufacture/cultivate, possess, sell, purchase, transport, store, and/or
consume any narcotic drug or psychotropic substance. The Narcotic Drugs and
Psychotropic Substances Act is designed to fulfill India’s treaty obligations under
the Single Convention on Narcotic Drugs, Convention on Psychotropic
Substances, and United Nations Convention Against Illicit Traffic in Narcotic Drugs
and Psychotropic Substances.

7. Medical Devices Rules 2017

The Medical Devices Rules, 2017 have been notified with an aim to bring within
its purview the entire universe of devices by notifying them as “drugs” in a phase-

22
wise manner thereby bringing them within the jurisdiction of the Central Drugs
and Cosmetics Organisation. Presently, only a few types of medical devices are
regulated in India as “drugs” under Section 3(b)(iv) of the Drugs and Cosmetics
Act and all other non-notified medical devices do not require any registration
certificate or other regulatory approvals. With the Medical Device Rules and the
subsequent notification of medical devices, regulatory approvals would be
required. Further, discussions are underway for developing detailed guidance on
essential principles for safety and performance to be followed in the
manufacturing process of medical devices intended to be sold in India.

23
1.11 Top 10 pharmaceutical companies in India :-

1. Cipla
Cipla is an Indian multinational pharmaceutical firm that delivers generic
medicines to cure medical conditions like respiratory, diabetes, weight
control, and a lot more. Cipla was started in 1935 in Mumbai. They provide
a vast variety of medicines and are the largest manufacturer of
antiretroviral drugs globally. The company owns 34 manufacturing units in
India and 80 other countries. The company has acquired a lot of
recognition in the Indian and global markets because of the highest
standard quality. They supply more than 2000 formulations. The arising
market regions for Cipla covers all markets outside of India, the US, South
Africa, and Europe.

2. Sun Pharmaceutical Industries Ltd

Sun pharmaceutical industries ltd is an Indian multinational pharmaceutical
company started in 1983. Its headquarter is in Mumbai, Maharashtra. It
produces and sale of chronic and acute therapies, which possess API
(Active pharmaceutical ingredients), ARVs (antiretroviral), OTC (over the
counter), and generic drugs in India and the US.

Sun pharmaceutical is India’s first biggest pharmaceutical company and the

4th generic pharmaceutical company globally. In 2014, sun pharmaceutical
obtained Ranbaxy, making it the largest pharma company in India and the
US. They have over 40 manufacturing API and formulation plants in over
100 countries globally. They offer 2000+ formulations in India and other
countries.

3.  Aurobindo pharma
Aurobindo Pharma is a pharmaceutical firm headquartered in HITEC City,
Hyderabad. They deliver generic pharmaceuticals and API. The company
started in 1986 by launching one unit of semi-synthetic penicillin in
Pondicherry. In 2014, the company purchased ACTAVIS, which performed
generic operations in 7 Western European countries. The company supplies
its products in 125 countries, and it also includes its production and
research and development units. They deliver the best quality products
24
 and have massive demand in the market. Aurobindo pharma owns
Aurobindo pharma, USA, Novagen pharma (pty) Ltd., AuroZymes limited,
and many others.

4. Reddy’s Laboratories Ltd

Dr Reddy’s Laboratories Ltd is an Indian multinational pharmaceutical
company established in 1984. Its headquarter is in Hyderabad, Telangana.
It develops and sells active pharmaceutical formulation, generic drugs, OTC
drugs, and 60 active Pharmaceutical ingredients (API) for drug producers,
diagnostics kits, biotechnology products, and acute care in India and other
countries. Over 10 FDA (Food and drug administration) plants manufacture
API across India. Earlier, to overcome the covid-19 pandemic, they
associated with the Russian direct investment fund to perform final-stage
clinical trials and delivered 100 million doses of Russia’s Sputnik V vaccine
for India.

5. Divi’s laboratories limited

Divi’s laboratories are one of the top 10 pharmaceutical companies in
India. It manufactures API, intermediates, and nutraceutical ingredients. It
was established in 1990. Its headquarter is in Hyderabad, Telangana. In
market capitalization, it is India’s second worthwhile pharma company. The
company has 3 manufacturing units in Hyderabad, Vishakhapatnam, and
Kakinada and 3 research and development units in India. Divi’s laboratory
exports products to Japan, the USA, Australia, South Africa, and the
Philippines. Divi’s laboratories involve Divi’s laboratories (USA), Inc. and
Divi’s Laboratories Europe AG.

6. Abbott India
Abbott India is the oldest and largest multinational pharma company in
India. It is the associate of Abbott Laboratories of the United States. It was
established in 1944 and headquartered in Mumbai, Maharashtra. The
company delivers pharmaceutical drugs and offer therapeutics that
incorporates neurology, women’s health, gastroenterology, anti-infective,
diabetology, urology, thyroid, vitamin, etc. They manufacture 400 branded
generic pharmaceuticals globally. They deliver high-quality and reliable
products.

25
7.  Alkem laboratories
Alkem Laboratories is an Indian pharma multinational firm that sells high-
quality generic pharmaceuticals, APIs, and nutraceuticals in India and more
than 50 countries worldwide. The company owns 21 manufacturing units in
different countries, including 19 in India and 2 in the USA. It was
established in 1793 and headquartered in Mumbai, Maharashtra. It is the
first anti-infective drugs provider pharmaceutical company in India that
strikes 1,000 million sales in India.

8. Torrent pharmaceuticals
Torrent pharmaceutical is one of the top 10 pharmaceutical companies in
India owned by Torrent group, and it is an Indian multinational pharma
firm registered in 40+ countries. The company was established in 1959 and
is headquartered in Ahmedabad. They produce the best quality product at
a minimum price.

 Torrent Pharma is indexed in the therapeutic areas of cardiovascular,

gastrointestinal, central nervous system, women’s health care, anti-
infective, diabetology, oncology, gynaecology, and pain management
areas. Its manufacturing plants and research Centres are all across India.
The company owns 7 companies like Heumann pharma GmbH &co.,
generic KG, Bio-pharm, Inc., and many others.

9. Lupin Limited
Lupin is the biggest pharma company that delivers various products like
generic drugs, biotechnology products, and APIs. The company’s primary
focus areas are anti-tuberculosis, asthma, diabetology, cardiovascular, anti-
effective, and paediatrics. The company was established in 1968 by
manufacturing folic acid and iron tablets. After that, it started producing TB
drugs which made a massive revenue for the company, and it is
headquartered in Mumbai, Maharashtra. Lupin’s manufacturing units are
broadened in India, Mexico, Brazil, the United States, and Japan. The
company produces in over 100 countries.

26
10.Zydus Cadila healthcare
Zydus Cadila is the oldest company in the Indian market and evolved as the
leading manufacturer in pharmaceutical, diagnostics, herbal product OTC
products, and skincare products. The company was established in 1952 and
is headquartered in Ahmedabad. Zydus exist in the regulated markets of
the US, Europe, South Africa, and Latin America. Over 30 manufacturing
units globally include India, Brazil, and the USA. 

27
 Chapter 2
Research Methodology

28
Research design: Analytical Research

Data collection method:

Secondary data through:-
Published material and annual reports of mutual fund reports of mutual fund
companies
Other published material of mutual fund.
Research data collected through AMFI website.

Objectives of research
 To find strength, weakness, opportunity and threats of pharmaceutical
Industry .
 To find factor affect to pharmaceutical Industry by pestle analysis
 To find strategic method use in pharmaceutical Industry

29
 Chapter 3
Data Analysis

30
 SWOT Analysis of Indian Pharmaceutical Industry :-

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%2F&psig=AOvVaw34OOty95-xcCnK2qPZN_LB&ust=1669877300953000&source=images&cd=vfe&ved=0CBAQjRxqFwoTCOi7je-
n1fsCFQAAAAAdAAAAABAD

The pharmaceutical industry is a large-scale industry that has a wide stretched

market. It is known for discovering, creating and producing medically usable
drugs. This industry has to abide by a set of rules that helps to govern the whole
ordeal.

A pharmaceutical industry SWOT analysis will help one to analyze this industry
and take necessary steps to improve their standing in the business sector. It also
shows what preemptive steps to take in order to make the industry better than
ever. For the higher ups in the management sector understanding the SWOT
analysis of their company or industry is a necessity.

A SWOT analysis is a composition of a company’s strength, weakness,

opportunity and threats. Assisting a company to develop a clear image of their
business pattern is the main objective of a SWOT analysis. It clearly lays out all
the factors that are involved with the target company. That is why
a pharmaceutical industry SWOT analysis is very helpful for this industry.
Primary business strengths, weaknesses, opportunities, and threats will be the
main focus of our pharmaceutical industry SWOT analysis

31
Strengths of Pharmaceutical Industry in SWOT Analysis

A pharmaceutical industry swot analysis presents only the best and brightest
parts of the pharmaceutical industry. This section of the pharmaceutical industry
swot analysis will focus on the strength of this industry.

Efficient and experienced general officers: This industry works on so many

different levels that it is very hard for inexperienced personnel to maintain
any sub sector of it. So, in order to keep things running smoothly the
industry hires highly trained personnel as its executive officers. This in turn
maintains the high standard that the industry has set for itself.

Skilled staffs: Any and all staff of the pharmaceutical industry is highly

skilled. They are employed only after they have spent a good amount of
time on rigorous training. These staff are the backbone of this industry. So
having a skilled set of staff surely helps with the industry’s face value.

Wide-spread base of buyers: This industry has a large base of customers. It

also produces some common types of medicine, which actually helps
support this base. This also ensures that this industry will have enough
buyers for their products.

Resource and Labor availability: This industry needs a high amount of

manpower and chemical resources. The countries of Asia and Africa can
offer up a nice amount of manpower at a very low price. Then again, the
countries of Europe and America have bountiful financial resources.  They
can also buy necessary chemicals for their drugs.

32
 Setting the benchmark: Pharmaceutical industry has set an awfully high
benchmark for the medical industry. It is a known fact that the
pharmaceutical industry is a subsector of the medical industry. So, by doing
its job efficiently the industry is setting a good example of excellence for
the medical industry.

Noticeable market presence: The pharmaceutical industry has quite an

impressive presence in the market. Its large and intimidating aura often
scares away potential competition and lures in many customers.

Weakness of Pharmaceutical Industry in SWOT Analysis

The weaknesses of this industry are the next focus of this pharmaceutical
industry SWOT analysis. It is an essential part of the SWOT analysis. These points
are usually the ones that are responsible for holding back the industry. These
points to improve are enlisted below:

Non availability of modern technology: This industry lacks modern

machinery. This makes it rather outdated and dull as customers are always
searching for new and improved health care materials. Not to mention
with modern tech support the production could be a lot faster.

Lengthy decision-making process: This industry is quite vast and

widespread. So, when taking a new and/or revolutionary decision, it may
take a while before it is properly executed. This slows down the whole
process. The main cause is the lengthy decision-making process of the
industry. As the companies have their own board of directors and chairman
they can hardly agree on anything in a short period.

Low profitability and low profit margins: As the price is quite high for the
resources in this sector, profits are quite low more often than not. And it’s
not that it is only the case for some of the companies. Almost all the
companies have low profit margins. This causes the industry to fall behind
on the ground of wealth.

33
 Low staff morale: The staff in this industry doesn’t have much motivation.
This is the reason for low rates of production. Because many psychological
articles suggest that if the morale is low or non-existent the performance
of humans takes a heavy blow. So low staff morale is an issue.

Opportunities for Pharmaceutical Industry in SWOT Analysis

At this part of our pharmaceutical industry SWOT analysis, we will focus on all the
good points that are there but are yet to be utilized. These are enlisted below:

Government support: This industry is often favored by the

government. So, they get all the support and help they need from the
government. It is also the factor for which the industry is flourishing to this
day. The laws and taxes are often in their favor.

Growing space: This industry is still in its growing phase, according to

the Life Cycle of an Industry. So, it can still go a long way and spread its
wings further apart. So, it can still take control over the market, given the
right marketing and advertising.

Financial support: Along with the government, many insurance companies

are also favoring this industry. They have reasonable conditions and rules
for them to follow. Also, the interest level is very low for them.

Patents: The pharmaceutical industry develops new and effective

medication. If one company creates it, it can patent that product
themselves and earn a handsome amount of profit. This gives the industry
a chance to grow.

34
 Global market: Globalization has made the world closer than ever. This
includes all the customers. The pharmaceutical industry is showing a
promising future in the global market. If this works out well, the deficiency
of proper resources and low profit margins will be no more.

Threats for Pharmaceutical Industry in SWOT Analysis

For each and every SWOT analysis having a fresh and unique perspective
regarding the factors that are harmful to the industry is a must. Only due to the
fact that without sharpening their defenses against these, the pharmaceutical
industry will not be able to rise above its competitions. In the pharmaceutical
industry SWOT analysis threats are taken very seriously.

Currency devaluation: In the current society’s currency devaluation has

taken a turn for the worse. This is affecting the pharmaceutical industry in
a grim manner. It makes the whole ordeal a lot harder than it already is.
New competitors: Since globalization, the rivaling industries are increasing.
Many people are interested in the Ayurvedic industry, homeopathic
industry and many others instead of medicines. This poses a great threat to
the pharmaceutical industry.
Insufficient power supply: The pharmaceutical industry requires a huge
amount of power. However, to supply this power on a large scale is a
problem. As a result, many companies of the industry don’t get enough
power to carry out their necessary routines.
Inflation: The inflation of prices is an undeniable evil that is ever present.
Especially in a sector is where raw materials are pricey to begin with,
inflation of price just adds salt to the wound. Suddenly the necessities are
out of reach for many companies in the industry. This causes the
production cost to skyrocket and suddenly the profits are lower than ever.

35
 PESTEL Analysis of Indian Pharmaceutical Industry :-

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company%2F&psig=AOvVaw3OCkF_sl0PwnuVq-
zc_kpQ&ust=1669877500015000&source=images&cd=vfe&ved=0CBAQjRxqFwoTCIDt2syo1fsCFQAAAAAdAAAAABAE

POLITICAL :-

 Increasing political focus on healthcare.

 Global governments look for healthcare savings
 Britain voted to leave Europe causes political turmoil

ECONOMICAL :-

 Increasing labor cost

 Inflation
 Consumer confidence is low
 Low fuel prices and interest rates helps promote growth in market
capacity

SOCIAL :-

 Increasing attention in healthcare

36
TECNOLOGICAL :-

 Opportunity: Advertise through social media

ENVIRONMENT :-

 Advance weather condition causes the temporary suspension of

some factories
 Growing attention to environmental protection

LEGAL :-

 Hello World Pharmacy was fined $450m for pollution issues

37
 Five Forces Analysis of Indian Pharmaceutical Industry :-

\
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ap1fsCFQAAAAAdAAAAABAE

Threat of New Entrants :-

 High no. of legal procedures and licenses

 High capital requirement for mfg, supply chain & R&D
 Low success ratio in R&D
 Patent issues
 Barriers are moderate incase of generics as R&D expenses are low
 Exports require high regulatory dearness

Bargaining Power of Buyers :-

 For generics and OTC drugs its high

 Needs to keep buyer’s satisfied otherwise will risk to lose to
competitors
 For some of the patented and Life saving drugs buyers power will be
moderate

38
Bargaining Power of Supplier :-

 High no. of suppliers

 At times, use of single supplier as sole sources for particular material
 Delay in supplying materials hampers their ability to deliver products

Threat of Substitutes & Complements :-

 For R&D intensives drugs threat is moderate

 For generics and off patent drugs threat is very high
 Alternative medicines like auyrveda, unani posing threat
Competition :-

 High competition across companies for generics

 Very less differentiation points in generics
 Price discounting and margin pressures in generics
 For patented drugs it acts almost as monopoly

39
Chapter 4
Conclusion

40
Pharmaceutical Industry plays an important role on implementing the
welfare state of the people.

Economic growth of the industry along with the availability of generic

goods and healthy competition is the need of the hour for India.

High capital requirement for mfg, supply chain & R&D

After analyzing the impact of the FDI in the Indian pharmaceutical

industry, it is establishment that India needs adequate FDI and its
spillovers for the growth of the industry.

Pharmaceutical industry works on so many different levels that it is

very hard for inexperienced personnel to maintain any sub sector of it.
So, in order to keep things running smoothly the industry hires highly
trained personnel as its executive officers.

Pharmaceutical industry is often favored by the government. So, they

get all the support and help they need from the government. It is also
the factor for which the industry is flourishing to this day. The laws and
taxes are often in their favor.

41
BIBLIOGRAPHY

 SubbaRaoChanganti(2008), states in his book, “Pharmaceutical

Marketing in India”
 SanjeeveChandran et al. (2005), in their paper, Implication of
New Patent Regime on Indian Pharmaceutical Industry:
“Challenges and Opportunities”
 Ravi KiranandSunita Mishra (2009), in their international paper,
“Changing Pragmatics of the Indian Pharmaceutical Industry in
the Pre and Post TRIPS period”
 Prashant B. Kalaskarand P.N. Sagar (2012), the authors in their
review article, Product Patent Regime Posed Indian Pharma
Companies to Change Their Marketing Strategies: “A Systematic
Review”
 GehlSampath (2004), in his WHO study, Economic Aspects of
Access to Medicines after 2005: “Product Patent Protection and
Emerging Firm Strategies in the Indian Pharmaceutical Industry”
 Shashi Sharma (2007), in report, New Patent Regime in India:
“Challenges and Future of the Pharmaceutical industry”
 SudipChaudhuri et al. (2010), in a study for UNDP, Five Years into
the Product Patent Regime: “India’s Response”
 Gopakumar and Santhosh (2012), in their article, “An unhealthy
future for the Indian pharmaceutical industry”

42