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Mumbai , Sept 16

THE business potential and the challenges before the Indian pharmaceutical industry found sharp focus at the two-day international business convention that concluded on Tuesday under the aegis of the Indian Pharmaceutical Association (IPA).

From a production of Rs 18 crore of bulk drugs in the 60s, the industry has grown by about 300 times to Rs 5440 crore, while formulations have grown from Rs 150 crore to Rs 21,000 crore.

McKinsey & Company has predicted a compounded growth of 19 per cent for the industry.

According to Mr K. Satish Reddy, Managing Director of Dr Reddy's Laboratories Ltd, the Indian pharmaceutical market was valued at $5.8 billion in 2002, representing about 1.5 per cent of the world pharmaceutical market.

He said this pie was split amongst about 24,000 companies, making the industry one of the most fragmented and price-sensitive industries.

Harmonisation of regulations, stricter patent regimes and other regulatory standards besides legal claims are some of the hurdles facing Indian companies overseas, he added.

Moving up the value chain and retaining world-class talent are the other challenges that need to be overcome in order to leverage the Indian advantage.

Dr P.A. Mody, Chairman and Managing Director of Unichem Laboratories, said that Indian companies could adopt different entry models for the global markets depending on their capabilities, which would involve moderate to high investments.

Many indigenous pharmaceutical companies have successfully demonstrated their skills in the area of developing cost-competitive technologies, which would help in realising their goals.

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