India's pharma industry set to quadruple by 2020

The Indian pharmaceuticals market looks poised to grow to $55 billion in 2020, according to a new McKinsey & Company report — “India Pharma 2020: Propelling access and acceptance, realising true potential”. This will be a quadrupling of the market from the $12.6 billion the industry made in 2009. The report states that the pharma market has the further potential to reach $70 billion by 2020 if aggressive growth efforts are embraced.

“The scale and complexity of the market is increasing as India is moving towards the global top tier,” says Palash Mitra, Partner at McKinsey & Company, and Leader of the Pharmaceuticals & Medical Products Practice in India.

cknowledging existing discontinuities in global pharmaceuticals markets, the report says it is the BRIC countries, including India, that will lead growth in the coming decade.

The other countries in the BRIC bloc are Brazil, Russia and China.

The Indian pharmaceutical industry has been growing at 13-14 per cent in the past five years, a significant increase over the nine per cent growth witnessed between 2000 and 2005. According to the report, five new opportunities will capture 45 per cent of the market by 2020, growing from the $3-billion industry today to $14-18 billion in 2020. These are patented products, consumer healthcare, biologics, vaccines and public health.

Metro and Tier-1 markets, which have been growing at 14-15 per cent in the last five years, will drive growth in the industry. They account for 60 per cent of the Indian pharmaceuticals market today and look set to continue growing to a market size of $33 billion by 2020. This will be the result of rapid urbanisation and the expansion of medical infrastructure. Rural markets, on the other hand, will constitute 25 per cent by 2020, up from 20 per cent currently, while Tier-2 markets will decline from the present share of 20 per cent to 15 per cent.

“Access in rural and Tier-2 markets are an issue,” said Mitra, “Traditional commercial models are not going to work. The industry needs to look to newer approaches to enhance healthcare and drugs.”