India's pharmaceuticals market soon to be among top 10 performers

India is in line to become one of the top 10 global pharmaceuticals markets, and with its economy predicted to grow around 5% a year for the next half decade, it offers huge opportunity to pharma multinationals in contrast to the more mature markets of North America, the EU and Japan where growth is slowing, according to new study.

'India - Prescription for Growth' by Pricewater-houseCoopers (PWC) says the country's over-the-counter (OTC) market is currently worth US$940m (€774m) and is growing at 20% a year

The report identifies rapidly changing demographics and pharmaceutical needs, a robust services base, and attractive tax concessions for overseas investors as all contributing to India's attraction.

A number of foreign multinationals have been attracted by India's financial incentives, which include tax holidays for companies based in underdeveloped areas and the deduction of capital r&d expenditure. The US Food and Drug Administration (FDA) has already approved 60 manufacturing sites - more than any other country outside the US - for new developments.

Intellectual property protection continues to be a major concern, and changes in recent patent legislation may ease this but effective policing of the new laws will be important.

Despite the nation's lower operating margins, labour costs and research skills, only three foreign multinationals currently appear in India's top 10 pharmaceuticals companies based on sales, and they share only 11.9% of the market.

Thomas Mathew, PWC's India pharmaceutical leader said: 'India's native manufacturers present a huge threat to Western generics companies and currently produce 20% of the world's generics. In 2004 India's largest drug firms invested $142m on r&d. The global pharmaceutical industry must take notice of [this] booming industry.'