Generic medicines in india promulgating growth & access

KNOWLEDGE PARTNER
GENERIC MEDICINES IN INDIA
Promulgating Growth & Access
September 2015

ACKNOWLEDGEMENT
D.S. Rawat
It gives me immense pleasure to watch ASSOCHAM organize the
Conference on Generic Medicines in India – Promulgating growth
& access, in association with the Department of Pharmaceuticals,
Government of India. Indian Pharma market is predominantly a
branded generics market, and this segment contributes around
90% of total sales, and also represents one of the key strengths of
the market, encompassing the OTC segment as well. Only about
10% of the market constitutes commodity generics sold through
institutional sales and innovator products. Government of India has
also its focus on boosting the growth of generics within India as
well as for exports. Soon to be launched “Jan Aushadhi” scheme
is a testament to the importance of generics for public health and
well being. This being said, the Generic Medicine industry in India
faces challenges in the form of regulatory and licensing issues
and ASSOCHAM hopes that through the platform created at this
Conference a way forward can be found and initiated.
I extend my heartiest thanks to all the stakeholders including
Department of Pharmaceuticals, ICMR, Belco Pharma, CiPi,
and HPMA among others for this Conference. I also thank our
Knowledge Partner of this Conference “RNCOS” for its wonderful
efforts in putting up this report on the subject of Indian Generic
Medicine industry.
I also acknowledge the efforts put in by Sandeep Kochhar, Deputy
Director and Head-ASSOCHAM Healthcare & Pharma Division
and his team members Shagun Ahlawat and Karanveer Singh for
organizing this Conference.
I not only wish the Conference a great success but also assume
that ASSOCHAM shall continue to organize such programs for
larger public benefits with a greater degree of excellence.
(Secretary General)
ASSOCHAM
(D.S.Rawat)
Secretary General
ASSOCHAM

1. India Demographics
1.1 Ageing Population
1.2 Healthcare Expenditure
1.3 Disease Profile
1.3.1 Cardiovascular Diseases
1.3.2 Diabetes
1.3.3 Cancer
2. India Pharmaceutical Market Outlook
3. Drivers & Challenges
3.1 Drivers
3.1.1 Rising Healthcare Expenditures
3.1.2 Ongoing Patent Cliff
3.2 Challenges
3.2.1 Monopoly of Doctors in Prescribing Branded Medicines
3.2.2 Lack of Price-Control
3.2.3 Weak Supply Chain Management
3.2.4 Lack of Promotion
3.2.5 Quality Control
3.2.6 Lack of Awareness
4. India Generic Overview
4.1 Indian Market Performance relative to the World
4.2 Market Size
4.3 Top Generic Drugs Globally
4.4 Key Therapeutic Areas for Generics
5. Patents Expiry of Blockbuster Drugs
6. Consolidations in Generics Industry
7. Government Initiatives
7.1 Jan Aushadhi Scheme for the Promotion of Generic Drugs
7.2 Free Essential Drug Scheme
7.3 ‘Sehat’- A Telemedicine Initiative to Drive Generic Drug Sales
8. Competition
8.1 Market Share of Major Players
9. Future Outlook
10. Opportunities
11. Recommendations
TABLE OF CONTENTS

LIST OF FIGURES
Figure1-1: Population Age Above 65 years (Million) 2009-2014
Figure1-2: Healthcare Expenditure (% of GDP) 2009-2014
Figure1-3: Diabetes Population in the Age Group 20-79 years (Million) 2013 & 2030
Figure2-1: Breakdown of India Pharmaceutical Market by Value (%) 2009-2014
Figure2-2: Domestic Pharmaceutical Market (Billion US$) 2014-2020
Figure4-1: India Generics Drug Market (Billion US$) 2009-2014
Figure4-2: Revenue Share of Major Generics Segments (%) 2014
Figure9-1: Generics Drug Market (Billion US$) 2015-2020
LIST OF TABLES
Table4-1: Similarities and Differences Between Branded And Generics Drugs
Table4-2: Top Generic Drugs Globally by Prescription (Million) 2014
Table5-1: List of Blockbustor Drugs Losing Patent (2015-2020)
Table6-1: Major Consolidations in Indian Generic Industry (2014-2015)
Table7-1: Free Drugs Provided by States
Table8-1: Share of Major Players in Generics Drug Market (%) 2014
LIST OF FIGURES & TABLES

1.1 Ageing Population
India is one of the fastest growing economies in the world, expected to overtake china within
the next two years. According to Central Statistics organization India is likely to have 20% of the
world’s working-age population in the coming years. Presently, the country is the home to the
largest cohort of young people in the world, with about 59% of its population under the age of 33.
This provides India a competitive advantage over China and other Asian countries.
However, the country is also witnessing the rise of ageing population (people above 65 years
of age). The older age group accounts for 5% of the country’s population. The proportion of the
older age group in the country’s population will equal the current US population (300 Million) by
2050. The country will witness a marginal rise in the old age dependency ratio from 13% in 2000
to 32.8% in 2050. Precisely, three Indians in the working age population will have to take care of
one elderly by 2050 as compared to eight at present.
A closer look at the ageing trend at the regional level reveals that southern states are ageing
faster among all the regions. Presently, states such as Kerala, Tamil Nadu, Andhra Pradesh
and Karnataka account for 21% of the population. These states have the total fertility rate (TFR)
below 2.1 which states that the median age of the population is declining. These numbers are
comparable to fast-ageing countries such as Norway, Australia, Sweden, Germany and Canada.
States such as Bihar, Uttar Pradesh and Rajasthan have a TFR of above 3, which is also reflected
in their young population. Also, the proportion of people above the retirement age (60 years) in the
southern states is 11% as compared to the country’s average 9%. Thus, by observing the current
scenario, southern India is likely to age faster than the rest of India.
Figure1-1: Population Age Above 65 years (Million) 2009-2014
1. India Demographics
1,100
1,120
1,140
1,160
1,180
1,200
1,220
1,240
2009 2010 2011 2012 2013 2014
56
57
58
59
60
61
62
Population (Million) Population above 65 years (Million)
04 Generic Medicines In India Promulgating Growth & Access
SOURCE- CSO

1.2 Healthcare Expenditure
The growing burden of an ageing population, will demand for better healthcare facilities including
higher investment in medical research and development. The country has underdeveloped geriatric
care with geriatric specialists in shortfall. India has the most inadequate medical infrastructure with
approximately nine hospital beds per 10,000 people as compared with a global average of 30.
Healthcare expenditure has increased from being 4.1% of GDP during 2009 to 6% of the GDP in
2014. India ranks among the bottom five countries globally with the lowest public health spending.
Although public healthcare services are subsidized in the country, but meagre infrastructure and
services are prompting the majority of the population to switch to better-equipped private providers.
Personal disposable income in India has grown by 9% since 2009. With the rise in income,
consumption patterns have changed and a new middle class has emerged, which is growing at a
fast pace. The share of middle class in the total population will likely to increase from around 5%
in 2005 to 41% in 2025. The rising middle class population will be a predominant factor for more
value based healthcare facilities. Additionally, India has limited healthcare insurance coverage
(both private and government) than other countries, which leads to nearly 80% of the out of the
pocket expenditure on medical facilities. This opens significant opportunities for businesses such
as primary healthcare as well as wellness and disease management.
Figure1-2: Healthcare Expenditure (% of GDP) 2009-2014
0.0
0.5
1.0
1.5
2.0
2.5
2009 2010 2011 2012 2013 2014
0%
1%
2%
3%
4%
5%
6%
7%
GDP (Billion US$) Healthcare Expenditure (% of GDP)
05Generic Medicines In India Promulgating Growth & Access
SOURCE- World Bank

1.3 Disease Profile
With the changing urban lifestyles, the prevalence of non communicable diseases such as
diabetes, cardiovascular ailments etc. are tightening their grip in India. Apart from sedantry
lifestyles, higher consumption of junk food, use of tobacco and alcohol, as well as psycho-social
stress are considered key reasons for the increasing disease burden.
Rising obesity among the youth and the middle aged population is contributing significantly to such
problems. India is ranked third in terms of the number of obese people. Obese individuals are at
high risk of developing health problems, such as heart disease, stroke, diabetes, certain types of
cancer, gout (joint pain caused by excess uric acid) and gallbladder disease. Being overweight can
also cause problems such as sleep apnea (interrupted breathing during sleep) and osteoarthritis
(wearing away of the joints). There were 30 Million obese people in India during 2013.
According to the WHO, one out of four Indians is at risk of dying from non-communicable diseases
like diabetes, cardio-vascular ailments or cancer before 70 years of age. These diseases, including
respiratory and other nutritional problems claim 60% of the total mortality reported in India.
Diseases like cancer, chronic respiratory problems and cardiovascular diseases are amongst the
biggest health threats, accounting for 38 Million deaths every year, with 28 Million deaths in low
and middle income countries, including India. Heart and vascular diseases, diabetes, common
cancers, chronic lung disease, and mental illness are the major NCDs prevalent in India.
1.3.1 Cardiovascular Diseases
Cardiovascular diseases are amongst the deadliest diseases in the world and India is no
exception. Such diseases, which affect the heart and the blood vessels, resulting in heart
attacks or strokes in extreme cases, account for 26% (2.5 Million) of the total deaths in
India. According to the WHO estimates, the total economic loss due to non-communicable
diseases in India between 2012 and 2030 is estimated to be US$ 2.17 trillion which is
about two and a half times of India’s GDP.
Cardiovasculardiseasesareexpectedtoberesponsibleforalmosthalfoftheaforementioned
loss. The consequence of the deadly disease is the decline in the productivity of the working
population ultimately hurting the profitability of businesses. Moreover, higher occurrence
of cardiovascular diseases significantly reduces the purchasing power of customers who
would have to spend much of their savings on their treatment.
1.3.2 Diabetes
India is one of the fastest growing diabetes markets in the world. With India emerging as
the nation with the largest population of diabetics, it is important that an Indian company
takes on the disease with cost-effective and easily accessible treatment. India has over 65
Million diabetes patients and by 2030 could comprise over 101 Million diabetes patients.
The prevalence of diabetes is predicted to double globally from 171 Million in 2000 to 366
Million in 2030 with the maximum increase in India.
It is observed that the prevalence of diabetes in rural populations is one-quarter that of the
urban population for India and other Indian sub-continent countries such as Bangladesh,

Nepal, Bhutan, and Sri Lanka. A lower proportion of the population is affected in states of
Northern India such as Chandigarh (0.12 Million), Jharkhand (0.96 Million) as compared to
Maharashtra (9.2 Million) and Tamil Nadu (4.8 Million) . The aetiology of diabetes in India
is multifactorial and includes genetic factors, coupled with environmental influences such
as obesity associated with rising living standards, steady urban migration, and lifestyle
changes. The economic burden imposed by diabetes gets magnified because it leads to
related complications, including heart, kidney, eye and foot diseases.
1.3.3 Cancer
India is progressively witnessing considerable rise in cancer cases. Some of the major
factors associated with the disease are changing lifestyles, unhealthy diet patterns, and
use of tobacco and alcohol. Also, skewed doctor to patient ratio, expensive medication
and ignorance among the people contribute to high mortality due to cancer. There is a
requirement of 1 cancer care unit per 100,000 populations, which is a far cry from the
current scenario. With millions of new cases diagnosed every year in the country, the
incidence of the disease is likely to rise fivefold by 2025.
According to the Health Ministry, there were around 492,000 cases of cancer in 2014 and
this number would grow by 9.4% by 2020, accounting for 845,000 cases. The maximum
number of cases registered till date are that of lung and oral cancers among men and
cervix and breast cancers among women. Elderly men are more prone to prostate cancer
besides kidney, penis and intestine cancer. It has been noted there are more than 300
cancer centres across India, and 40% of them are inadequately equipped with advanced
cancer care equipment.
Figure1-3: Diabetes Population in the Age Group 20-79 years (Million) 2013 & 2030
2013
SOURCE- IDF
65.1
101.2
2030f
CAGR
2.6%

Figure2-1: Breakdown of India Pharmaceutical Market by Value (%) 2009-2014
2009e
57.1% 59.2%
42.9% 40.8%
2010e 2011e 2012e 2013e 2014e
SOURCE- RNCOS
Export
Domestic
India ranks 4th in pharmaceutical production in the world with a production output of about US$ 31 Billion
in 2014. The country has a 1.4% share by value and 10% by volume in the global pharma industry. India
is one of the leaders in pharmaceutical exports. The country exports drugs worldwide to more than 200
countries. During fiscal year 2013-2014, the country reported US$ 14.8 Billion of drug exports.
The major export markets for the country’s pharmaceutical products are Americas, Europe, China, Japan,
Africa, etc. The US is single largest export destination. It accounts for nearly 28% of Indian pharmaceutical
exports, followed by the European Union (18%) and Africa (17%). The pharma exports to the US market
are high due to the large number of approvals from the USFDA. India has been the third-largest exporter
of drugs to the US market by volume and it has 370 FDA-approved manufacturing facilities outside the
US, which is the second largest in the world. Several Indian manufacturers such as Sun Pharma, Biocon,
Cipla, Dr. Reddys, Zydus Cadila and Lupin have been deriving significant revenues from the US market.
However, revision of regulatory policies by the US government, consolidations, and quality issues in
certain manufacturing facilities of Indian companies will have severe adverse implications on the growth
of exports.
Larger exports of Indian drugs in European and African countries are also supported by approvals from
the World Health Organization and regulatory agencies from the respective regions. In addition, higher
demand for therapeutics under the categories such as anti-malarial and anti-retrovirals are contributing
substantially to the export revenue.
2. India Pharmaceutical Market Outlook
55.8% 52.7% 51.2% 51.0%
44.2% 47.3% 48.8% 49.0%

The domestic pharma market was valued at US$ 15.4 Billion in 2014 and is expected to expand at a
CAGR of 13.3% to US$ 32.7 Billion by 2020. Driven by favorable demographics including growing aging
population, increasing lifestyle diseases, steep growth in disposable incomes, and increasing penetration
of Indian drug players in the global market, India is likely to be among the top three pharmaceutical
markets by incremental growth and sixth largest market globally in absolute size.
Figure2-2: Domestic Pharmaceutical Market (Billion US$) 2014-2020
2014e
15.4
17.4
19.6
22.2
25.1
28.6
32.7
2015f 2016f 2017f 2018f 2019f 2020f
SOURCE- RNCOS
CAGR
13%

3. Drivers & Challenges
3.1 Drivers
3.2 Challenges
3.1.1 Rising Healthcare Expenditures
The Indian population has witnessed a steady rise in healthcare expenditure from 3.8% of
the GDP in 2011 to 6% of the country’s GDP in 2014. The major chunk of the population
(nearly 40% of Indians) live on less than US$1 per day and most of them have to pay out
of their own pockets for medical services. Out-of-pocket spending in India is over four
times higher than public spending on healthcare. The direct out-of pocket payments have
pushed 2.2% of all healthcare users and one-fourth of all hospitalized patients, into poverty
during 2014.
Thus, the progressive rise in healthcare expenditures has forced the government and
private health insurance players to seek ways to control healthcare costs. Generic drugs
play an essential role in alleviating the high costs of the healthcare system. These drugs are
priced 80-85% lower than their branded counterparts. This pressure creates an increasing
demand for generic drugs versus branded counterparts
3.1.2 Ongoing Patent Cliff
A rise in geriatric population across the globe is making the countries move to cheaper
APIs and formulations which are India’s strengths. It is estimated that around US$ 40
Billion worth of drugs in the US and US$ 25 Billion worth of drugs in Europe will be going
off patent (series of patent expirations of important prescription drugs) in the coming years.
Patent expiry of Lipitor by Pfizer, Diovan by Novartis, Plavix by Bristol-Myers Squibb etc.
have already pushed Indian generic players to expand in international markets.
Subsequently, some of the other global pharma majors such as Teva, Glaxosmithkline
and Allergen are likely to lose patent exclusivity of several drugs. Therefore, the patent
cliff is giving significant opportunity to Indian manufacturers to develop generic versions of
respective patented drugs. India is a major market for generic drug manufacturing in the
world, followed by South Korea and Japan.
3.2.1 Monopoly of Doctors in Prescribing Branded Medicines
Currently, fast moving branded medicines are manufactured by MNCs or large Indian
companies. The branded medicines are usually expensive as they are strongly promoted
through doctors and chemists and such promotional costs add to their retail prices,
i.e., Maximum Retail Price (MRPs). The practice of bribing doctors by pharmaceutical
companies to create more and more prescriptions is one of the major hurdles for the
generics demand.

3.2.2 Lack of Price-Control
India is a branded generics dominated market. The companies are very possessive of their
Brand Names and Brand Image. Most of them go out of the way to nurture and protect
their brand names and hence will always ensure the quality and packing of the product.
Hence, most of the drugs sold in the country are branded generics. These medicines are
usually expensive as they are strongly promoted through doctors and chemists and such
promotional costs add to their retail prices, i.e., Maximum Retail Price (MRPs).
On account of the lack of price control measures, consumers in India end up paying higher
price for the majority of branded generics. The higher prices of medicines are a result of
the commission being charged by pharmacist/pharmacies for recommending a particular
company’s drug to the consumers. If the companies sell their drugs without having to indulge
in promotions through pharmacists, patients/hospitals would get the same medicines at
lower prices.
3.2.3 Weak Supply Chain Management
Though India has been a manufacturing hub for generic medicines, the majority of the
population is unable to get benefits of cheaper drugs. Ee though the central government
took initiatives to provide generic medicines through retail stores free of cost, the execution
of the programme was limited to a few hospitals as the infrastructure for procurement and
distribution is not put in place. There is no equal regional distribution of such stores in the
country.
Jan Aushadhi retail chains have been opened only in eight states including Punjab and
Rajasthan with Rajasthan having more than half the total Jan Aushadhi stores in India.
All Jan Aushadhi stores in Rajasthan are run by Rajasthan State Consumer Co-operative
Federation. Stores in other states are mostly operated by the Red Cross. Other states are
devoid of JAS stores. States such as Gujarat and Tamil Nadu do not have plan to open
such stores in the future. Also, under this programme, 319 generic drugs were identified
to be supplied through these stores, but only 85 drugs belonging to 11 therapeutic groups
are sold. According to the scheme, there were 112 JAS, out of which 107 have been
operational.
More than half of the Jan Aushadis shut down because of fundamental flaws such as a
weaker supply chain management system and the huge task of engaging physicians to
prescribe generic medicines. Several drug stores have been running out of stock due to
poor supply chain and distribution network.
It has been observed that there is a strong lobby between pharmaceutical distributors and
district medical officers. The monopoly of providing branded medicines through specified
medical stores has been limiting the reach of middle class and poor patients to generic
medicines. Furthermore, a majority of the physicians does not prefer generic medicines
due to less business offered by these drugs. This adds to the out of pocket expenditure on
healthcare facilities.

3.2.4 Lack of Promotion
In several cases, drug companies follow unethical promotional strategies that push
consumers to spend heavily on branded medicines. Generic drugs are released only after
the originator loses its license. Replacing generics over the branded brings new challenges
for the players. Players involved in manufacturing of generic drugs have been unsuccessful
in promoting their generic drugs. This is due to the lack of investment in promotion and
marketing activities. The government has also been less focused to generate awareness
about the potency of generics.
To promote affordable drugs, the Government set up the Jan Ausadhi scheme during 2008,
whose objective was to open generic drug stores around the country. However, due to the
lack of proper implementation, the scheme failed to meet the target of distributing generics
across the country.
3.2.5 Quality Control
Despite the efforts of government to push generic drugs in India, there is less attention
paid to their quality. Generic drugs are chemical copies of the originator drugs and don’t
go through clinical trials. The country only has a specific set of tests to check the chemical
composition of a generic drug, rather than to ensure “bioequivalence” or its efficacy over
the pioneer drug. Reportedly, there is no proper authority for testing quality of these drugs.
India’s national drugs regulator, the Central Drugs Standard Control Organization, only
has authority for newer drugs. The drugs that have been on the market for over four years
are under the regulatory jurisdiction of state-level regulators, who are understaffed and,
in some cases, corrupt. For instance Ranbaxy Laboratories Ltd., was pleaded guilty for
fabricating data, committing fraud, and selling adulterated drugs in the US market.
Similarly, anti-fungal drug Liposomal Amphotericin B used against kidney failures has been
claimed to be of poor quality by ICMR. Furthermore, India does not have a limit on the
number of companies that can be allowed to manufacture the generic version of a drug.
Several companies are granted licenses to manufacture the generic version for specific
originator drugs. For example, over a dozen pharma companies have been awarded the
licenses to manufacture Liposomal Amphotericin B.
3.2.6 Lack of Awareness
In India, most people identify a product or commodity by a brand name. Even in the rural
belt, people are aware of brand names than the commodity. The ‘brands’ have created a
trust at a larger scale. When it comes to drugs, particularly the ‘Over the Counter’ (OTC),
the majority of patients ask for the’ Brand’.An average person asks for a Crocin, Combiflam,
Amoxil, etc.
In general, patients go by doctors’ prescriptions in case of scheduled drugs (drugs that
are fatal). It has been observed that nearly 70% of India’s population lives in rural areas,
and does not have access to well develop medical facilities. This group does not have
knowledge about generics medication. They are unaware of the fact that generic drugs
have potential to treat similar ailments at prices lower than the reference products.

4.1 Indian Market Performance relative to the World
In 2014, India accounted for a 3.7% share in the global generic drug market by value. As these
drugs do not progress through clinical trial hurdles, these drugs are fast to enter into the market. It
is worth noting that more than 80% of the six million AIDS patients globally are treated with Indian
generic drugs. Moreover, the country has the second largest number of Abbreviated New Drug
Applications (ANDAs) and is the world leader in Drug Master Files (DMFs) applications with the
US.
The country is attracting several big pharma companies like Novartis, Roche, Merck and Pfizer
among others due to cheap labour, favourable government policies, rising personal disposable
incomes, and high-out of pocket health expenditure. India is the leading supplier of affordable
HIV and tuberculosis medications and is the second leading provider of medicines distributed by
UNICEF in the developing world.
Similarities Differences
It must contain the same active ingredients (the
chemical substance that makes the drug work)
It must have the same route of administration
(the way the medication is introduced into the
body)
It must have the same dosage strength (the
amount of active ingredients, for example 20
mg or 40 mg)
They could have different sizes, shapes, colours
or markings. – They have different names
It must be the same dosage form (that is, it
needs to be available in the same form as the
original—for example, as a liquid, pill, etc.)
They might have different inactive ingredients.
– Drugs are made up of both active and inactive
ingredients. Some people may be sensitive to
inactive ingredients. For example, some people
have reactions to certain dyes used in some
drugs
It must deliver similar amounts of the drug to
the bloodstream (that is, it needs to deliver
a comparable amount of the drug into the
bloodstream within a similar time period as the
brand name drug)
The generic costs less than the brand name
drug. – The cash price and insurance co-pay
is usually lower. Generics can cost between 20
and 80 percent less, but keep in mind that cost
is only one factor when considering the right
medication for your condition
4. India Generic Overview
Table4-1: Similarities and Differences Between Branded And Generics Drugs
SOURCE- International Journal of Pharmacy & Pharmaceutical Sciences

4.2 Market Size
Generic drugs account for 75% of the domestic pharmaceutical market by value. According to
RNCOS, the generic drugs market has grown at a CAGR of 11% from 2009 to 2014. Fuelled by
cheap labour, patent cliff of blockbuster drugs and prevalence of lifestyle diseases, the domestic
generic market has shown positive growth during these years. However, the influence of physicians
in India in terms of prescribing branded medicines and the lack of drug pricing control laws have
limited the consumption of unbranded generics in the domestic market. Thus, Generics majors like
Sun Pharma, Lupin, Dr, Reddy’s etc., have been targeting international markets for their revenue.
In the last two years, Indian drug makers have gained more than 100 generic drug approvals from
the US FDA, making the US region its biggest market.
4.3 Top Generic Drugs Globally
Drugs for cholesterol control, pain management, anticoagulant, respiratory, liver disorders,
depression and lipid regulators are highly prevalent in the global market. Indian firms have been
successful in penetrating in the global market. Recently, Sun Pharma got the US FDA nod to
manufacture generic hydocodone bitartate with acetaminophen (APAP) tablets. It is a narcotic
analgesic indicated in the treatment of relief of moderate to moderately severe pain of acute,
chronic, or post-operative types.
Similarly, Mumbai based Wockhardt is manufacturing generic Lisinopril for treating high blood
pressure (hypertension), congestive heart failure, and to improve survival after a heart attack.
Hyderabad based firm Ranbaxy is authorized to manufacture Simvastatin, which is a cholesterol
lowering medication. The drug category became the 7th largest category by volume.
2009e
6.8
7.4
8.2
9.0
10.0
11.6
2010e 2011e 2012e 2013e 2014e
SOURCE- RNCOS
CAGR
11%

Name of Drug Volume (Mllion)
Hydrocodone-acetaminophen 123.4
Lisinopril 103.1
Levothyroxine Sodium 95.2
Atorvastatin Calcium 77.0
Amlodipine Besy 76.4
Simvastatin 73.5
Omeprazole (Rx) 73.2
Metformin Hcl 61.2
Amoxicillin 54.0
Hydrochlorothiazide 49.5
Table4-2: Top Generic Drugs Globally by Prescription (Million) 2014
SOURCE- IMS Health
4.4 Key Therapeutic Areas for Generics
• Anti-infectivessegmentisdominatedbyoldIndiandrugmakerssuchasCiplaandRanbaxy(nowa
partofSunPharma).Thegrowthofthesegmentisfuelledbyrisingincidencesoflifestylediseases
• The aggravating stroke problems in the country due to increasing obese
population, and patent expiry of GlaxoSmithKline’s cardiovascular pill ‘Lovaza’
have opened the doors for Indian firms to target the cardiovascular segment
• Indian manufacturers have limited penetration in the gastro-intestinal segment
with few firms active in the market such as Lupin, Aurobindo Pharma etc.
• Patent expiries of blockbuster respiratory drugs such as Actavis’s- Daliresp (2015), and
Tudorza Pressair (2016) will propel the demand for more generics. Some of the renowned
names in the segment include Cipla, Ranbaxy, Sun Pharma, and Aurobindo Pharma
• The demand for Multivitamins/Mineral supplements is rising with growing health awareness
among the youth. Thus, sufficient supply of such drugs would be needed in the future. Domestic
manufacturers like Piramal, Zydus Cadila are already established players in the market
• Analgesics/pain market is highly competitive with the presence of Ranbaxy
(Now a part of Sun Pharma), Wockhardt, GSK, Zydus Cadila, Piramal etc.

• Indiaisgoingtobecomethediabetescapitaloftheworldthatwouldcreateasignificantburdentothe
healthcaresysteminIndia.Followingthetrend,severalIndianplayersaretargetingthissegment.
The largest player; Sun Pharma derives 11% revenue from its diabetes business, Similarly, Dr.
Reddys,Lupin,Cipla,ZydusCadila,PiramalHealthcarehavebeengeneratingsufficientrevenues
• Other important segments, including dermatology, gynaecology, oncology, anti-depressants,
Thyroid, etc. contributed 32% of the total domestic generic sales. Continued patent cliff, inclining
chronic diseases and rising healthcare expenditure are likely to open new opportunities for
Indian players
Figure4-2: Revenue Share of Major Generics Segments (%) 2014
15% Anti-Infectives
32% Others
13% Cardiovascular
10% Gastro-intestinal
7% Anti-diabetes
7% Pain/Analgesic
7% Vitamins, Minerals
9% Respiratory

Ongoing Patent cliff would be a big financial boost for the generic industry. India exports 40-45% of the
generic drugs to several market including US, Europe andAfrica. Thus, it is benefitting several Indian firms.
The share of Indian companies is growing rapidly in the international generics market with increasing
number of Abbreviated New Drug Application (ANDA) filings.
5. Patents Expiry of Blockbuster Drugs
Parent Company Drugs Year
Actavis Daliresp 2015
Otsuka Pharmaceutical Co. Abilify 2015
Forest Laboratories Namenda 2015
Astrazeneca Nexium 2015
Astrazeneca Synagis 2015
AstraZeneca Cretor 2016
Daiichi Sankyo Benicar 2016
Daiichi Sankyo Benicar HCT 2016
Cubist Pharmaceuticals Cubicin 2016
Hospira Biotax 2016
Santarus Zegerid 2016
Actavis Tudorza Pressair 2016
Eli Lilly Alimta 2017
Otsuka Velcade 2017
AstraZeneca Seroquel IR 2017
Eli Lilly Prozac Weekly 2017
Novo Nordisk A/S Novolog 2017
Abbott Niaspan 2017
Abbott Tricor 2018
Abbvie Zemplar 2018
Astrazeneca Prilosec 2019
Takeda Pharma Dexilant 2020
Table5-1: List of Blockbustor Drugs Losing Patent (2015-2020)
SOURCE- Various Industry Sources

Generic manufacturers have been successfully involved in mergers and acquisition activities to enhance
their existing capabilities. The acquisition provides necessary impetus to their business and the strengthen
their reach to newer markets with a wider portfolio of products. Indian firms are also keen to enter into
licensing deals with larger pharmaceutical companies that are looking at emerging markets such as India
to license out their products.
Acquisitions at the global scenario create handful of opportunites for Indian generic makers to acquire
products and grow their business. For instance, acquisition of Allergan’s generics business by Teva
Pharmaceutical Industries creates certain product overlaps that is likely to boost domestic generics
players to widen their product portfolio. The merger deal between Sun Pharma and Ranbaxy has been
the biggest deal in pharmaceutical industry in Asia. Another influencer of the market is Lupin which is
seeking to expand its generic business in the developed markets.
S.No. Company Company (Acquired) Year Purpose
1
Sun
Pharmaceutical
Industries Ltd
Ranbaxy Laboratories
Ltd
2014
Aiming to become 5th largest
Global Pharma Company with
operations n over 55 markets
and 40 manufacturing facilities
worldwide
2
Strides Arcolab
Limited
(Strides)
Bafna Pharmaceuticals 2014
To acquire majority stake
of Bafna’s branded generic
business
3 Lupin
European Generics
firm
2014
To increase capabilities in
complex generics like inhalation
products and injectables,
dermatology products, and
biosimilar drugs
4 Abbott CFR Pharmaceuticals 2014
Exceeding generic capabilities
in emerging markets including
India
5 Lupin
GAVIS
Pharmaceuticals LLC &
Novel Laboratories Inc.
(GAVIS)
2015
To expand US Generics
Business. Broadens Lupin’s
pipeline in dermatology,
controlled substance products
and other high-value and niche
generics
6 Cadila Claris Lifesciences 2015
To acquire generic sterile
injectables business of claris
Table6-1: Consolidations in Indian Generic Industry (2014-2015)
SOURCE- Dept of Pharmaceuticals
6. Consolidations in Generics Industry

7. Government Initiatives
7.1 Jan Aushadhi Scheme for the Promotion of Generic Drugs
Jan Aushadhi scheme enables free distribution of low cost unbranded generic drugs through Jan
Aushadhi stores in various districts of the country. The following initiatives define Jan Aushadhi
Campaign.
• Encouraging public–private partnership to establish retail outlets in Government hospitals
premises and in selected districts.Applicatnts would be invited form NGOs, charitable institutes,
consumer bodies, hospitals to run retail oulets
• To engage medium and small, enterprises for manufacturing the drugs to shore up the supply
of generic drugs
• To train and encourage doctors to prescribe generic drugs
• Increasing the public awareness about the usage, availability and price of generic drugs
through national helpline or multimedia
• To open Jan Aushadhi stores in all medical colleges and district hospitals
• To increase the availability of anti-biotics, anti-cardiac, anti-infective and gastro intestinal drugs.
• Widening marketing and distribution channel through quality cGMP facilities and improved
logistics chain
7.2 Free Essential Drug Scheme
The free drug programme is one part of the National Health Assurance Mission announced by
the president. The scheme now has been implicated to the states government. A large number of
states have been agreed to the proposal made my the center to provide free drugs. The Centre
will financially incentivize states to start the free drug scheme.
To initiate a free drug scheme and fulfilling the condition of putting in place a quality assurance
system, states will be will be given 5% of its NHM allocation as an incentive. However, centre has
also decided to provide 50 essential free. The mission will essentially have three components
— free drugs, free diagnostics and free health services. Major drugs to be distributed include
antibiotics, anti-hypertensives and anti-diabetes drugs. In addition, include drugs to cure fever,
cough, cold, rabies, etc., would be also provided for free.
The health ministry had sought Rs 500 crore budgetary support for the scheme. Under the
programme, 348 drugs in the National List of Essential Medicines (NLEM) were proposed to be
provided free from 1.6 lakh sub-centres, 23,000 primary health centres, 5,000 community health
centres and 640 district hospitals.

7.3 ‘Sehat’- A Telemedicine Initiative to Drive Generic Drugs Sales
The Government has announced a Telemedicine/Teleconsultation services support named ‘Sehat’.
The initiative will help people in rural areas to consult doctors through a video link and also order
generic drugs. The Common Service Centres (CSCs) will deliver tele-consultation in collaboration
with Apollo Hospitals. Under the service, people can visit CSCs and fix an appointment for seeking
expert consultancy with a doctor. The faclity will be available in 60,000 CSCs across the nation. The
CSCs will also provide diagnostic services and promote sale of generic drugs through collaboration
with Ministry of Health, by setting up Jan Aasudhi Stores.
States
Cost Incurred
( INR Crore)
Free Drugs
Rajasthan Medical Service
Corporation (RMSC)
295 607
Tamil Nadu Medical Service
Corporation (TMSC)
300 651
LKerala Medical Service
Corporation (KMSC)
242 771(essential)
Karnataka State Drugs
and Warehousing Society
Logistics (KSDLWS)
200
378 (and some
surgical items)
Table7-1: : Free Drugs Provided by States

8.1 Market Share of Major Players
The domestic generic drug market is highly competitive by the presence of several players such
as Sun Pharma, Lupin, Dr. Reddys, Cipla, Aurobindo pharma among others. The top 10 players
account for 25% of the domestic market. Rest 75% of the domestic generic drug market is
influenced by international players such as Teva Pharma, Sandoz, Actavis, Pfizer, small & medium
enterprises such as Natco pharma and among others.
Acquisition of Ranbaxy by Sun Pharma have made it to emerge as the domestic generic leader.
The company derived US$ 612.54 Million of the revenue from India. It specializes in various
therapeutic areas with dominant player in neuropshitary, cardiology, gastroenterology and
diabetology segments. The combined entity of Sun Pharma- Ranbaxy aims to become the sixth
largest generic player in the world.
With 4% share in the domestic generic market, Cipla became the second largest player by value.
The company generates about 40% of the revenue from domestic sales. Mumbai-based player
which is popular for its APIs manufacturing was able to derive US$ 467 Million from its generics
sale during 2014.
8. Competition
Name of Drug Volume (Mllion US$) % Share
Sun Pharma 613.0 5.3%
Cipla 467.0 4.0%
Lupin 417.0 3.6%
Zydus Cadila 409.1 3.5%
Dr. Reddys 288.0 2.5%
Biocon 249.0 2.2%
Workhardt 168.0 1.5%
Jubiliant 166.0 1.4%
Aurobindo Pharma 125.0 1.1%
Others 866.2 74.9%
Table8-1: Share of Major Players in Generics Drug Market (%) 2014

The domestic generic drug market is poised for an impressive growth in the near future. According to
RNCOS, the market is anticipated to grow at a CAGR of 16.3% from 2014 to 2020. The Generics would
account for 85% share in the domestic pharma market by 2020. With key initiatives announced by Modi
Government to include price control policies and the revision of Jan Aushadhi campaign, the market is
likely to show a notable incline in the penetration of unbranded drugs.
India is likely to be the diabetes capital of the world. This, coupled with the rising prevalance of chronic
diseases would give rise to a huge patient pool. These aggravating problems would demand value added
drugs at affordable prices. Keeping these factors in mind, players are leveraging their capabilities in new
therapeutic segments.
Therisingconsolidationsinthemarketareopeningdoorsforthedomesticplayerstoextendtheircapabilities,
making the industry highly competitive. Players are expanding their global footprint, announcing new
distribution channels and opening new manufacturing facilities. Moreover, several drugs are going to
lose their patent protection in the US and Europe, which will generate huge opportunity for the domestic
players by opening up a number of developed markets.
9. Future Outlook
2015
13.1
14.9
17.2
20.1
23.5
27.9
2016 2017 2018 2019 2020
SOURCE- RNCOS
CAGR
16%

10. Opportunities
Leveraging different Distribution Channels
Through government efforts to promote generic drugs by opening JAS stores across the nation, generic
manufacturers have the opportunity to widen their distribution channel system. For instance, drug
distribution channelized via government tenders is on rise with increasing evidence of Government
involvement in drug procurement in states such as Tamil Nadu, Andhra Pradesh and Karnataka. This is
due the fact that the majority of the generic players such as Sun Pharma, Dr. Reddy’s Laboratory, Cipla
and Lupin are located in Western & Southern parts of the country. These companies have limited their
supply chain to their own regions.
The hospital procurement channel is another distribution channel that can be leveraged in other states.
This channel is characterized by its organized nature and inherent legalities. Companies may have to
remodel their current commercial channels to leverage the opportunity that these new channels offer.
Capitalizing on Unbranded Generics Market
Presently, the generics market in India is dominated by branded generics (an off-patent drug sold under a
brand name) and this has been a potential roadblock for sale of unbranded generic products by domestic
manufacturers. The revival of Jan Aushadhi Scheme and Free Essential drug scheme by the state &
central government would provide ample opportunity to the domestic players to capitalize on unbranded
generic drug sector.
Revision of Patent Laws to Promote Generic Drug Manufacturers
Indian patent law aims to curtail a process known as ‘evergreening,’ in which pharmaceutical companies
make sometimes minor improvements to an old medicine, allowing them to renew their patent. Under India’s
tough standards, modifications that do not improve the efficacy of the drug are not eligible for extended
patents. Perhaps, India is a leading supplier of affordable HIV/AIDS and Tuberculosis medications and is
the second leading provider of medicines distributed by UNICEF in the developing world. For instance,
rejection of patent extension of Novartis innovator product by Indian Supreme Court during 2012 would
open the doors for domestic manufacturers to develop cheaper drugs that are affordable for poor patient
population.
Similarly, issuing of compulsory licensing to the generic drug companies under the section 92 of Indian
Patent Law would encourage domestic manufacturers. For instance, IPO granted first CL to the domestic
company Natco against the anti-cancer drug by German pharma company, Bayer in 2012. The similar
move has been taken for Roche’s Herceptin (trastuzumab), a biotech drug for the treatment of breast
cancer and Bristol-Myers Squibb’s (BMS’s) Sprycel (dasatinib) for the treatment of leukemia and Ixempra
(ixabepilone) for the treatment of breast cancer. This would make easier for manufacturing of generic
drugs in India.
Remodeling of Product Pipeline
Indian companies should focus on niche segments and products that involve a higher level of technology
and complexity such as:
New Drug Delivery Systems (NDDS): Indian companies can grab the opportunity presented by
delivery-based drug systems. Technology-intensive products such as extended-release tablets,
patches and inhalers may help companies create a more differentiated portfolio.

Emerging therapeutic areas: With increasing healthcare awareness, growing geriatric population
in the country, new needs are emerging, leading to new opportunities. Areas such as diabetes,
respiratory, inflammatory disorders, oral contraceptives, etc. can be the potential focus segments.
Value added generics: While niche and complex molecules are a part of the diversification
strategy that companies can adopt to build a sustainable portfolio, value- added generics are a
means to enhance present offerings. Indian companies must innovate and look at generating
value from ‘super-generics’, which can deliver additional benefits – increased efficacy, improved
ADME characteristics, etc., to patients.
Expanding Regional Presence
Generic drug companies in India are confined to the Southern and Western regions. Thus, the performance
of any drug manufacturer is affected by unequal distribution of its manufacturing plants and distribution
channels in the domestic market. The revision of government policies such as technical training, funds
allocation, opening of organized retail chains in states such as Rajasthan and Punjab as well as the
encouragement of public private partnership in the industry would be an initiative welcomed by generic
players to widen their regional location.
New Export Markets (International)
Several compliance issues and stringent quality control regulations in the US/EU markets are acting as
restraints for generic exports. India derives major chunk of its export revenues from these developed
markets. Markets such as GCC, Japan and CIS still remain untapped. For example, India’s presence in
the world’s second largest pharma market, Japan, is merely 1%. However, ability of Lupin to successfully
establish its footprint in Japan is a proven example for exploring other markets. In addition Indian generic
manufacturers can look to establish their foothold in regulated markets such as South East Asia and
Africa.

11. Recommendations
Focus on Quality Control: Since India has been a leading manufacturing hub for generic drugs, and
popular destination for low cost HIV drugs, the country is still struggling with quality issues such as
adultration, manufacturing malfunctions and product recall from international markets. Thus, improvements
need to be made on the safety and efficacy of these drugs.
Creation of Robust Supply Chain Network: Establishing a firm and sound logistics framework is
imperative to meet the demand of affordable medications. States governments need to devise novel
strategies, and work closely with third party supply chain operators to develop warehouses and new retail
outlets.
Support to Other States: Central Government’s initiative to establish Jan Aushadhi retail chains has
been limited to a few states. Special attention is required to open manufacturing plants in Uttar Pradesh,
Haryana, Punjab, Bihar, etc. These states have a potential for strong consumption of medicines due
to severe cold and continuous fog in the months from November through February. Thus, there is a
tremendous need for antibiotics, anti-colds, anti-asthmatics, and cough suppressant products during
these months.
Access to Modern Technology: In an increasingly complex and competitive economic landscape, the
need to align people, processes and technology is stronger than ever. Access or availability of modern
technology can help enterprises reduce cost and time taken to innovate and offer sophisticated products
and services. This helps generic drug players of the country differentiate from global peers.
Need for Infrastructure Development: The small & medium enterprises engaged in generic drug
manufacturing face a lot of problems in terms of infrastructure as they do not have enough supply of water
or electricity, also they do not have warehouses where they can keep their excess stock or raw materials.
Therefore, infrastructure development is very much needed so that enterprises can manufacture goods
to their maximum capacity.
Need for Increasing Awareness Programmes: The generic drug sector in India faces a major issue of
lack of awareness regarding low cost generic drugs among the population. The ministry should conduct
awareness programmes in rural as well as urban areas, so that people should get to know about the
benefits of the these drugs.
Encouraging New Entrepreneurs: Government has been very supportive towards the industrial units
in several states, giving special incentives to SMEs. Various incentives like capital, bank loans, plant
& machinery, among others, along with special incentives and relaxations such as procurement of raw
materials at subsidized rates, entrepreneur training to the rural entrepreneurs will give a further push to
the industry.
R&D for Product Development: The generic drug sector is in a dire need for accelerating R&D and
modern technology adoptions in various fields. The government should help the enterprises with research
in developing new products and there should an existence of proper R&D centres or institutes which
should be exclusively dedicated to research and development of generic products.

ASSOCHAM
THE KNOWLEDGE ARCHITECT OF CORPORATE INDIA
Evolution of Value Creator
ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. Having in its fold
more than 400 Chambers and Trade Associations, and serving more than 4,50,000 members from
all over India. It has witnessed upswings as well as upheavals of Indian Economy, and contributed
significantlybyplayingacatalyticroleinshapinguptheTrade,CommerceandIndustrialenvironment
of the country.
Today, ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is
all set to redefine the dynamics of growth and development in the technology driven cyber age of
‘Knowledge Based Economy’.
ASSOCHAM is seen as a forceful, proactive, forward looking institution equipping itself to meet the
aspirations of corporate India in the new world of business. ASSOCHAM is working towards creating
a conducive environment of India business to compete globally.
ASSOCHAMderivesitsstrengthfromitsPromoterChambersandotherIndustry/RegionalChambers/
Associations spread all over the country.
Vision
Empower Indian enterprise by inculcating knowledge that will be the catalyst of growth in the
barrierless technology driven global market and help them upscale, align and emerge as formidable
player in respective business segments.
Mission
As a representative organ of Corporate India, ASSOCHAM articulates the genuine, legitimate needs
and interests of its members. Its mission is to impact the policy and legislative environment so as to
foster balanced economic, industrial and social development. We believe education, IT, BT, Health,
Corporate Social responsibility and environment to be the critical success factors.
Members – Our Strength
ASSOCHAM represents the interests of more than 4,50,000 direct and indirect members across the
country. Through its heterogeneous membership, ASSOCHAM combines the entrepreneurial spirit
and business acumen of owners with management skills and expertise of professionals to set itself
apart as a Chamber with a difference.
Currently, ASSOCHAM has more than 100 National Councils covering the entire gamut of economic
activities in India. It has been especially acknowledged as a significant voice of Indian industry in
the field of Corporate Social Responsibility, Environment & Safety, HR & Labour Affairs, Corporate
Governance, Information Technology, Biotechnology, Telecom, Banking & Finance, Company
Law, Corporate Finance, Economic and International Affairs, Mergers & Acquisitions, Tourism,
Civil Aviation, Infrastructure, Energy & Power, Education, Legal Reforms, Real Estate and Rural
Development, Competency Building & Skill Development to mention a few.

Insight into ‘New Business Models’
ASSOCHAMhasbeenasignificantcontributoryfactorintheemergenceofnew-ageIndianCorporates,
characterized by a new mindset and global ambition for dominating the international business.
The Chamber has addressed itself to the key areas like India as Investment Destination, Achieving
International Competitiveness, Promoting International Trade, Corporate Strategies for Enhancing
Stakeholders Value, Government Policies in sustaining India’s Development, Infrastructure
Development for enhancing India’s Competitiveness, Building Indian MNCs, Role of Financial Sector
the Catalyst for India’s Transformation.
ASSOCHAM derives its strengths from the following Promoter Chambers: Bombay Chamber of
Commerce&Industry,Mumbai;CochinChambersofCommerce&Industry,Cochin:IndianMerchant’s
Chamber, Mumbai; The Madras Chamber of Commerce and Industry, Chennai; PHD Chamber of
Commerce and Industry, New Delhi.
Together, we can make a significant difference to the burden that our nation carries and bring in a
bright, new tomorrow for our nation.
The Associated Chambers of Commerce and Industry of India
ASSOCHAM Corporate Office:
5, Sardar Patel Marg, Chanakyapuri, New Delhi-110 021
Tel: 011-46550555 (Hunting Line) • Fax: 011-23017008, 23017009
Email: assocham@nic.in • Website: www.assocham.org

26 Come Invest in Africa: The continent of the future
About RNCOS
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• Pre-testing and post launch evaluation
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• Phone Consultations/ Expert Recruitment
for Industry Insights
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• Setting up of Dealer Distributor Network
• Set up a representative office in any par-
ticular geography.
• Capturing and increasing market shares
• Identifying potential clients
• Competitive Intelligence Services
• Location Consulting Service
• Report Writing Services
• Region / Country Analysis
• Sector / Industry Briefings
• Technology Reports
• White Papers
Business Consulting Services firm offering a broad spectrum of Management Consulting and Business facilitation services including but not
limited to Financial & Business Assessment, Market Entry / Expansion Strategies, Market and Industry
Research, Identification & Selection of Business Partners, Feasibility and Facility Location Studies etc.
Since our inception in 2002, we have been offering research solutions to distinguished clientele’ across multi geographies and industry verti-
cals. We help our clients in achieving sustainable performance and better growth prospects by weeding out their obsolete business process
with well laid strategies by working in close co-ordination with them.

A - 142, Second floor, Sector 63,
Noida - 201301, INDIA
Tel: +91-120-4224700/01/02/03
Fax: +91-120-4224707
Website: www.rncos.com
Email: marketing@rncos.com
5, Sardar Patel Marg, Chanakyapuri,
New Delhi-110 021
Tel: 011-46550555 (Hunting Line)
Fax: 011-23017008, 23017009
Email: assocham@nic.in
Website: www.assocham.org

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