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 An Indian pharmacist checking his stock of medicines in New Delhi in August.
Photo: PHILIPPE LOPEZ/AFP/Getty Images |
BUSINESS Fab Pharma IT and BPO outsourcing were the more hyped success stories of 2003. But an equally successful tale was etched out by the Indian pharmaceutical industry. Indian drug companies branched into foreign markets -- especially the United States and Africa -- producing drugs, at times, for a tenth of the price at which they are sold by US majors, thus creating a new outsourcing story. Critics sniggered that this was because Indian drug companies spent less than six percent of turnover on research and development while companies like Pfizer spend nearly 18 percent on R&D. Undeterred by such criticism, the Indian pharmaceutical industry continued to pass on the benefits of a process patent regime as opposed to a product patent one to the customer. Analysts believe India is poised to gather a lion's share of the $48 billion outsourcing opportunity in the global pharmaceutical industry by 2007. The bulk outsourcing or manufacturing outsourcing is currently at $14 billion and will be a $27 billion opportunity by 2007. In July, Wockhardt acquired CP Pharmaceuticals of Britain, becoming the largest Indian pharmaceutical company in the United Kingdom. The deal, at £10.85 million, was the largest overseas acquisition by an Indian pharmaceutical company yet. In November, three Indian companies -- Ranbaxy Laboratories, Cipla, and Matrix Laboratories -- were signed up by the Clinton Foundation to provide low-cost drugs to AIDS patients in Africa and the Caribbean. It was perhaps the best sign that the Indian pharmaceutical industry is slowly coming of age. Text: Priya Ganapati India set to tap $48 bn pharma outsourcing mkt Bulk drugs eye $15 bn global opportunity Interview with Wockhardt chairman Habib Khorakiwala
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