India Pharmaceutical & Health Care Industry Report - H2, 2013

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India Pharmaceutical & Health Care Industry Report - H2, 2013

This report profiles India’s pharmaceutical and health care sector and reviews current trends and market outlook as of H2 2013. It also reviews the leading sectoral players including Dr Reddy’s, Cipla, and Lupin, and the sector’s position vis-à-vis competitors in South America, China, Japan, and the United States.

Over the last decade, India’s pharmaceutical and health care sector has made great strides. The Indian pharmaceutical sector has reached new heights as the world’s most cost-effective generic drugs manufacturer. Many Indian pharmaceutical companies have maintained the highest standards in purity, stability, and international safety; in health and environmental protection during the production process; and in the supply of bulk drugs. Competing fiercely with other emerging markets such as Brazil and China, India has carved a niche for itself in becoming one of the leading generic pharmaceutical manufacturers in the world.

The Indian pharmaceutical and health care sector witnessed a challenging period in 2013. The domestic pharmaceutical market grew by 9% in 2013, having grown by 12% in 2012. The notification of Drug Prices Control Order (DPCO)-2013 brought a relief to the buyers of essential medicines. However, the order negatively affected the incomes of drug manufacturers as well as the margins of stockists, distributors, and retailers all over India. This led to a rift between the manufacturers and retailers on the issue of margins. The year also saw import warnings and a ban against the factories of two major manufacturers—Wockhardt and Ranbaxy—by the United States’ FDA. Both manufacturers witnessed a plunge in their stock prices as a result of FDA action.

Going forward, a revival is expected in the sector backed by government support and various macro growth drivers including the rise in per capita income and health insurance penetration, the proliferation of health care services across the remote areas, an increase in lifestyle diseases, the increasing preference for India as a cost-effective production center, and the increase in foreign investments and in government as well as private expenditure on health. However, frequent policy changes and the rising prices of raw materials may act as deterrents of growth for this sector.

Key Points:

• This report discusses the market position and financial highlights for three leading players in the industry—Dr Reddy’s Laboratories Limited (Dr Reddy’s), Cipla Limited (Cipla), and Lupin Limited (Lupin). The latter has manufacturing facilities across both India and Japan.

• The sector competes fiercely with companies from South America, principally Brazil, and China. The United States received 31% of total exports from India in 2013.

• Health care has become the preferred choice for foreign investors in the last few years. In the first half of 2013, the sector registered 25 deals with a value of USD 352mn. The sector was second only to the technology sector in terms of deals made in 2012.

• The pharmaceutical sector contributed 28% to the health care industry as of FY13. The sector grew at a CAGR of 10% during 2006–13. The sector mainly comprises two business segments—domestic market and exports. Pharmaceutical exports accounted for 43% of the total size of the sector in 2013. Hence, pharmaceuticals was one of the sectors of the economy which helped in containing the country’s trade deficit and added to its foreign exchange reserves.

Table of Contents

1. Industry Profile
1.1 Sector overview
1.2 Sector size
1.3 Competitive landscape
1.4 Environmental scanning

2. Market Trends and Outlook
2.1 Key economic indicators-India
2.2 Health status indicators
2.3 Healthcare infrastructure
2.4 Domestic pharmaceuticals market
2.5 Pharmaceuticals exports
2.6 Foreign investments
2.7 Mergers and acquisitions
2.8 Pharmaceutical research and patents
2.9 Medical tourism & health insurance
2.10 Healthcare equipments
2.11 Market outlook

3. Leading Players and Comparative Matrix
3.1 Leading Players
3.1.1 Dr Reddy’s Laboratories Limited (Dr Reddy’s)
3.1.2 Cipla Limited (Cipla)
3.1.3 Lupin Limited (Lupin)
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and Charts

Table 1: Role of the Department of Pharmaceuticals
Table 2: Responsibilities of NPPA
Table 3: Top healthcare private equity deals of 2012-13
Table 4: R&D expenditure of companies in India
Table 5: Key financial ratios of leading players
Table 6: Market multiples of leading players

Chart 1: Breakup of global pharmaceutical market by geography in 2012
Chart 2: Annual budget outlay for NRHM
Chart 3: Size of Indian healthcare industry
Chart 4: Pharmaceutical exports from India
Chart 5: Estimated size of domestic pharmaceutical market
Chart 6: Market share of different players in the pharmaceutical sector of India
Chart 7: Cumulative FDI in the pharmaceutical and healthcare sector
Chart 8: Per capita expenditure on health
Chart 9: Breakup of Indian pharmaceutical market by type of drug
Chart 10: Quarterly GDP growth rate-India
Chart 11: Average monthly USD to INR exchange rate
Chart 12: Inflation during FY14-India
Chart 13: Y/Y Change in index of industrial production
Chart 14: Child mortality rate (under 5 Years) per 1000 live births
Chart 15: Maternal mortality rate per 100,000 live births
Chart 16: Infant mortality rate (Under 1 Year) per 1000 live births
Chart 17: New HIV infections in India by states
Chart 18: Cases of communicable diseases
Chart 19: Cases of non-communicable diseases
Chart 20: Shortage of medical professionals compared to health infrastructure
Chart 21: Average population served per government hospital
Chart 22: Segments of domestic pharmaceutical market by value
Chart 23: Market share of players in domestic pharmaceutical market by value
Chart 24: Major export destinations of Indian pharmaceuticals by value
Chart 25: Breakup of exports by type of products
Chart 26: Market share of players in the exports market by value
Chart 27: Trade surplus in the pharmaceutical sector
Chart 28: Private equity investments in the healthcare sector
Chart 29: Forecast for the size of Indian health insurance industry
Chart 30: Estimated size of medical equipments industry
Chart 31: Forecast for the size of Indian pharmaceutical sector
Chart 32: Breakup of company’s revenue by segments (Dr Reddy’s)
Chart 33: Total revenues of Dr Reddy’s
Chart 34: Profit margin of Dr Reddy’s
Chart 35: Breakup of company’s revenue by segments (Cipla)
Chart 36: Total revenues of Cipla
Chart 37: Profit margin of Cipla
Chart 38: Breakup of company’s revenue by segments (Lupin)
Chart 39: Total revenues of Lupin
Chart 40: Profit margin of Lupin

Number of pages: 37
Release Date: Tue, 11 Feb 2014