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Pharma Industry And Market Value Essay

484 words - 2 pages

The Indian pharmaceutical market is highly competitive and remains dominated by low priced, domestically-produced generics. In value terms, India accounts for less than 4% of the world market and per capita expenditure on pharmaceuticals is relatively low. By 2010 end, the domestic Pharma market in India is expected to be US$ 13.76 billion and this is likely to increase at a compound annual growth rate of 9.5-10 per cent till the year 2015. The success and failure of any project in this industry is largely dominated by R&D spending. R&D spending of the large firms is almost as high as 10 percent of the total earnings. The aim of our study is to find out what effect R&D spending has on the market capitalisation ...view middle of the document...

In value terms, India accounts for less than 4% of the world market and per capita expenditure on pharmaceuticals is relatively low.

The pharmaceutical sector is currently experiencing double digit growth and this is expected to continue, driven by the vaccines market. Continued growth is also expected in the diagnostic and therapeutic segments, including cancer and diabetes.

The Indian pharmaceutical industry represents around 8% of world pharmaceutical production. This industry plays an important role in promoting and sustaining development in the field of global medicine. Due to the presence of low cost manufacturing facilities, educated and skilled manpower and cheap labour force among others, the industry is set to scale new heights in the fields of production, development, manufacturing and R&D. By 2010 end, the domestic Pharma market in India is expected to be US$ 13.76 billion and this is likely to increase at a compound annual growth rate of 9.5-10 per cent till the year 2015.

Industry Trends

• The Pharma industry generally grows at about 1.5-1.6 times the Gross Domestic Product growth
• Globally, India ranks third in terms of manufacturing Pharma products by volume
• In 2007-08, India exported drugs worth US$7.2 billion in to the US and Europe followed by Central and Eastern Europe, Africa and Latin America
• The Indian vaccine market which was worth US$665 million in 2007-08 is growing at a rate of more than 20%
• The retail pharmaceutical market in India is expected to cross US$ 12-13 billion by 2012
• The Indian drug and pharmaceuticals segment received foreign direct investment to the tune of US$ 1.43 billion from April 2000 to December 2008

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