The Hindu Business Line : Patented drugs inflow set to grow, says McKinsey

Study says
Domestic pharma market will touch $20 b by 2015
Growth buoyed by higher incomes, expansion in medical infrastructure, health insurance, and diseases.
Generic drug cos will also show a healthy growth trend in next 7 years.

P.T. Jyothi Datta

Mumbai, Aug. 23 The depressed sentiment among multinational drug companies following the recent judgment on Novartis’ cancer drug Glivec may not quite affect the flow of new and patented drugs into India in the long run.

Patented drugs are likely to see increased sales in the domestic pharmaceutical market, growing from virtually nothing at present to about $2 billion in seven years, says a recent report from McKinsey & Company.

This would be part of a robust overall growth of the domestic pharmaceutical market to an estimated $20 billion by 2015, from sales of $6 billion at present, the consultant company said.

The judgment on Glivec may be an immediate dampener affecting sentiment in the near-term, said McKinsey’s Director, Mr Gautam Kumra. But multinational drug companies are increasingly looking at India and they will bring their patented products into the country, in the long term, he told Business Line.

Glivec judgement

Recently, the Madras High Court had in its judgment on a case relating to Novartis’ blood-cancer drug Glivec indicated that incremental innovation would not be granted a patent unless it proved it was more efficacious than similar products in the market.

Several multinational drug companies had expressed their unhappiness and said that the judgment would stifle the flow of patented drugs into India.

Even as the patented drugs segment looks poised for growth, generic drug companies will also show a healthy growth trend in the next seven years, showing an absolute growth of $14 billion, the study said. Such growth is next only to the United States and China and in the same league as Japan, Canada and the United Kingdom, he said.

Reason for growth

Outlining the factors that buoy growth in the domestic pharma market, the study identifies higher disposable incomes, expansion in medical infrastructure, increased coverage from health insurance, and the disease profile of an increasing population.

At an estimated $20 billion in 2015, India would also be catapulted into the top 10 pharma markets of the world, he said, up four notches from its current place.

While patented products would be about 10 per cent of the total medicine market, generic drugs will continue to dominate the space.

And despite the shift towards speciality products, mass therapies will continue to hold about 55 per cent of the market, the study said.

Mass therapies will remain important because of the gap between the prevalence and treatment rates in a range of segments such as anti-infective, gastro-intestinal, respiratory and pain management therapies.

For example, a fifth of the population suffers from anaemia but only 25 per cent receives treatment at present, the study said.