In the present patent regime, the competition for Indian pharma companies is going up day by day with the industry experiencing a pricing pressure, which had not been there before 2004.
In fact, the disappointing performance of some Indian pharma majors during the last fiscal was attributable to the loss of exclusivity in some drugs and the increasing competitiveness of the market.
However, this is being seen as a major challenge for the better, by many Indian companies, according to analysts.
"It is true that the US market in particular and international market in general are getting increasingly competitive. Far from being a handicap, the pricing pressure
helps efficient, cost competitive companies like Wockhardt, to gain market share," Habil Khorakiwala, chairman, Wockhardt, told PTI.
"In fact, we are quite bullish on the US market. We filed 16 ANDAs (Abbreviated New Drug Applications) with the US FDA in 2005, nine of them for injectables, and are looking forward to increased US business in the coming years," he adds.
Despite the downward trend in the price margins, the business volumes of Indian companies are on a growth path. For instance, Wockhardt's bethenecol chloride improved its share of the US market to 44 per cent from 40 per cent in 2004 and in Enalapril, it grew from 20 to 26 per cent.
According to Krishna M Ella, chairman and managing director, Bharat Biotech a further scaling down of prices in the US market cannot be ruled out.
"Industry is now on a consolidation mode and should be able to surge ahead further in the US market. Higher price margins would be a bygone era soon as prices would jump down further," he says.
To sustain up front competition from countries like China for a better pie in global pharma market, innovation should be the mantra, he says. "The current pressures will act as a catalyst for future growth," he adds.
Global pharma players including those of the US, are increasingly setting up more and more shops in India. This trend might drive out the cost advantage factor, particularly in generics market, according to industry sources.
Higher investment in R&D for innovation and building up the necessary talent pool and skills and infrastructure would impart long-term sustainability to the industry, say the analysts.
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