Pharmaceutical and Medical Products Practice
India Pharma 2020
Propelling access and acceptance, realising true potential
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The total market for healthcare products and services had grown at a compounded annual growth rate of 14 per cent from 2000 to 2005. The pharmaceutical industry had grown at a compounded annual growth rate of 9 per cent during that period. We felt in 2007 that the Indian pharmaceutical market was poised for a clear and discernable step-up in its growth trajectory. In our earlier report, India Pharma 2015 – Unlocking the Potential of the Indian Pharmaceutical Market, we projected that the market would grow at a compounded annual growth rate of 12 to 14 per cent to become a USD 20 billion to USD 24 billion market by 2015. This growth would be driven primarily by rising incomes, and be supported by five other factors: enhanced medical infrastructure; rise in the prevalence and treatment of chronic diseases; greater health insurance coverage; launches of patented products; and new market creation in existing white spaces. These factors are now bearing fruit, and market growth has kept pace with projections. Various industry reports suggest that the industry has been growing at 13 to 14 per cent over the last 5 years—a sharp rise from the 9 per cent compounded annual growth rate between 2000 and 2005. Most of the growth drivers have kept pace with expectations (Exhibit 1). India’s GDP from 2005 to 2009 grew at about 8 per cent. Growth in medical infrastructure and health insurance coverage has been in line with expectations. The treatment of chronic diseases has gone up. The remarkable success of a few recent launches has demonstrated the true potential of patented products.
Growth in input drivers in line with expectations1 in most cases
Growth in income level Real GDP growth Per cent, 2005-2009
Growth in medical infrastructure No. of doctors in India Thousands, 2009 ~780-800 760
Increase in health insurance coverage No. of people covered by insurance Millions, 2010
Rise in prevalence of disease Prevalence rate for diabetes in India Per cent
~150 Expected Actual2
1 Based on estimates made in India Pharma 2015 – Unlocking the potential of the Indian pharmaceuticals market 2 The steep rise in insurance coverage is due to government sponsored coverage for below poverty line (BPL) population. This possibility was highlighted in our previous report, though not included in projected estimates SOURCE: Global Insight; National Commission on Macroeconomics and Health - Burden of Disease in India; Medical Council of India; secondary research
While the market has gained in confidence, it is also facing a period of flux. First, the broader healthcare sector is experiencing discontinuous development. Manifold rise in public healthcare spending, rising patient awareness, expanding insurance coverage across the income pyramid and the emergence of new hospital formats illustrates this flux. Second, in the past 3 to 4 years, industry structure...