Indian Officials Urge Generics Export Focus

The Indian government's National Manufacturing Competitive Council (NMCC) has urged the domestic pharmaceutical industry to focus on generics exports in the coming years. The calls contrast with analysis from the private sector, which emphasises the need to grow India's biotech and clinical research capabilities.

According to a survey by the organisation, India accounts for 8% of world drug output by volume and just 1.5% by value, or roughly US$7.8bn. However, with approximately US$70bn worth of blockbuster drugs set to go off patent by 2010, opportunities clearly still exist for Indian generics makers, despite -- or perhaps because of -- the country's recent adoption of a tougher patent law.

Aside from these potential opportunities, the NMCC does not overlook India's strengths beyond its sizeable generics industry. The council estimates that the clinical services market will be worth US$5bn by 2010, with drug exports reaching roughly US$12bn over the same period. India's pharmaceutical R&D spending has grown tenfold since 1995 to INR15bn (US$343mn), but this remains dwarfed by the US$32bn spent in 2004 by research-based multinational drugmakers.

Nevertheless, it appears that the generics sector is likely to face growing competition in the coming years, despite the fact that the industry's revenue growth continues to outpace that of ethical drugs. Private sector groups have identified countries such as France, Spain, Italy and Japan as being potentially the toughest markets for Indian generics makers to penetrate. Further, the competitive threat from China, Brazil and South Africa is growing, and a lack of regulatory and scientific infrastructure could also affect the Indian generics sector's prospects.