This report profiles India’s pharmaceutical and healthcare industry, discussing market trends through 2014 and outlook for 2015 and beyond. The report also highlights leading players in the sector including Dr Reddy’s Laboratories Ltd, Cipla Ltd and Lupin Ltd.

Over the last decade, the Indian pharmaceutical and healthcare sector has taken great strides. India’s pharmaceutical sector has achieved 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, health and environmental protection during the production process as well as 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 domestic pharmaceutical market saw a revival after going through a challenging period in 2013. However, growth of pharmaceutical exports slowed down further in the year due to the Indian rupee depreciation. Going forward, a revival is expected in the sector backed by government support and various macro growth drivers, including rise in per capita income; rise in health insurance penetration; proliferation of healthcare services across remote areas; rise in lifestyle diseases; increasing preference of India as a cost effective production centre; increase in foreign investments; and increase in government and private expenditure on health. However, frequent policy changes and rising prices of raw materials may act as a deterrent for growth of this sector.

Key Points:

• According to the World Health Organization, the size of India’s healthcare industry was around USD 76bn as of 2012. The government sector accounted for around 33% of the total spending, while the private sector accounted for the remainder.

• India’s pharmaceutical sector was ranked among the top five globally in terms of production volume as of 2013. It accounted for over 10% of global drug production. However, in value terms, domestic pharmaceutical industry ranked 14th. It was minuscule in size when compared to the markets of U.S. and Japan. India accounted for only 1.4% of the global pharmaceutical market as of 2012.

• The pharmaceutical sector contributed 31% to the healthcare industry as of 2013. The sector grew at a CAGR of more than 10% during 2006-14.

• Pharmaceutical exports accounted for 39% of the sector’s total size as of 2014, thus helping to contain the country’s trade deficit and adding to its foreign exchange reserves.