Boston, MA -- (SBWIRE) -- 03/17/2014 -- Due to its large population and substantial unmet medical needs, India represents a market with strong commercial opportunities for pharmaceutical firms. However, we highlight that the government is impeding the development of its pharmaceutical sector, mainly due to extensive bureaucracy and poor policy planning. Some of the issues affecting various subsectors in the industry include the regulation of clinical trials, pricing of patented and essential drugs, generally low government involvement in healthcare and foreign direct investments.
Headline Expenditure Projections
Pharmaceuticals: INR840.0bn (US$15.7bn) in 2012 to INR904.0bn (US$16.1bn) in 2013; +7.7% in local currency terms and +2.7% in US dollar terms. Forecast was slightly downgraded from Q413 due to a slowdown in the pharmaceutical industry.
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Healthcare: INR3,814.7bn (US$71.4bn) in 2012 to INR4,214.5bn (US$75.3bn) in 2013; +10.5% in local currency terms and 5.4% in US dollar terms. Forecast broadly in line with Q413, although growth in US dollar terms was impacted by the depreciation of the rupee.
Risk/Reward Rating: India's Pharmaceutical Risk/Reward Rating (RRR) score for Q114 is 51.8 out of the maximum 100, in our newly improved RRR system. The country scored above average for some indicators and sub-indicators including overall market expenditure, sector value growth, population growth. Nevertheless, it scored below regional average for most indicators under industry and country risks. Consequently with the moderate score, India is ranked tenth, behind New Zealand, out of the 19 key markets in Asia Pacific.
Key Trends And Developments
In December 2013, the Indian government decided to dissolve an inter-ministerial panel that was created to reduce patented drug prices. The panel was formed in 2007 and involved seven members from the Department of Pharmaceuticals (DoP), the National Pharmaceutical Pricing Authority (NPPA), the National Institute of Pharmaceutical Education and Research, the Pharmaceutical Export Promotion Council of India, and the Drug Controller General of India.
In November 2013, the US-based not-for-profit public service organisation, the Initiative for Medicines, Access & Knowledge (I-MAK), filed a pre-grant opposition aiming to prevent Gilead Sciences/ Pharmasset (acquired by Gilead in 2012) from gaining a patent in India for sofosbuvir, used in the treatment of hepatitis C (HCV), and which is expected to come to market soon. The move has been welcomed by Medecins Sans Frontieres (MSF); the organisation claimed that Gilead is expected to charge US$80,000 for one treatment course of the drug in the US. Even if offered at a fraction of this price in developing countries, MSF argued, the drug will still be priced out of reach.
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