PCD Pharma Sector: Preparing for 2020

For PCD pharma companies the growth story has been pretty sweet. According to a PwC report, the pharma industry has been on a steady growth curve for a few years now and this will continue. Worldwide the sale of medicines in 2011 was estimated at$1.08 trillion USD. This was actually an increase by 7.8% of2010. A PwC report now pegs the figures to reach at least $1.5 trillion by 2020!

 

Interestingly, an important part of this growth story is the emerging markets of countries like India, China and Brazil. Of these the Indian market is poised to make a complete game-changing trajectory, one that may put it well ahead of its rivals. The availability of skilled labour, technical know-how and an already established international presence are expected to work in its favor.

But while we expect the Indian sector to grow significantly, only a fool would take this for granted. A closer look at the market tells us that we still have work to do before we close the gap with the top players. While India leads world trade in volume, we are still positioned at 14th place in terms of sale. Clearly we must understand the challenges facing us as well as the opportunities for our growth.

The Challenges

1. Lack of attention paid to R&D: Indian companies have always lagged behind when it comes to R&D. The costs involved are often considered to be too steep. However, no industry can flourish without the invention of new medicines and active research in healthcare.

2. Rising R&D costs: To compound the lack of attention pid to R&D is the rising costs now involved in R&D. This is because of rising manpower, equipment and overhead costs. This acts as a further deterrent for pharma companies, especially the new entrants.

3. Stricter global regulation: Thanks to technology, information sharing is now a matter of seconds. Cutting-edge software now gives us information at the click of a button, including blackballed lists! To add to this technology is the increasing collaboration of countries and their regulators. This means that any black mark against an erring PCD pharma company in one country is available to regulators from other countries almost instantly.

4. Changing marketing strategy: Worldwide the marketing in the pharma sector has changed completely. Market dynamics, technology, new and emerging markets have changed the way pharma companies are looking at markets, marketing medicines and reaching out to consumers. While it has created opportunities for many small companies in India, it has also forced us to rethink strategy.

5. Rising healthcare costs: While generic medicines may not have risen too much in value, certain branded medicines are today available at extremely steep price. Often made by big pharma companies, the rise in medicines costs has driven the cost of healthcare.

6. Patent problems: Indian PCD pharma companies are generally quite lax in registering patents. In many of the developed countries, they have already lost the patent wars. The reasons range from sheer laziness to ignorance. The result is that Indian companies are often stuck making generic drugs, while established big pharma companies hold most of the valuable patents.

Now that we have identified the challenges, let us look at some of the growth areas that we can exploit.

Drivers of Growth

1. Higher affordability: As incomes rise in India, there are more takers of branded medicines. More disposable income means that people are now actively seeking out specialized healthcare and willing to pay the price for it.

2. Improved healthcare infrastructure: Along with the rising incomes has come the availability of a viable and strong healthcare infrastructure, including insurance cover, availability of medicines and healthcare professionals.

3. Rising cases of diseases: The news of an outbreak every other month may seem like a public emergency, but for healthcare companies this is the silver lining. It gives them an opportunity for research, new innovations and an avenue for revenue.

4. Emergence of a low value but high volume market: For many emerging economies like India, the real avenue for growth is actually towards the lower end of the healthcare spectrum where various factors have pushed up sales overnight. While not high in value, the sheer volume makes up for the required numbers.

Conclusion

All industry-wide market researches show that the pharma sector worldwide is expected to keep up its growth trajectory and India will be one of the driving forces. However the 2020 roadmap for PCD pharma companies must be prepared today.

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About the Author: Vijay Aegis

Vijay is a compulsive blogger who likes to educate like-minded people on various new technologies and trends. He works with Aegis SoftTech as a software developer and has been developing software for years. Stay Connected to him on Facebook and Google+

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