The above statistics clearly show that the pharmaceutical sector is clearly divided among large no. of players and none of the players enjoy a clear large market share. This condition is a bit dangerous for Indian companies as they may die in the longer run competing to large pharmaceutical companies like GSK and Pfizer. Also in future consolidation may take place resulting in large consolidated companies where smaller Indian companies may become a target of large multinationals. Unlike other industries, the domestic pharmaceutical industry does not bunch-up due to a low capital-intensity and gestation period.
Hence, companies expand capacities in line with demand patterns. Cost of setting up manufacturing plant (RS Million)| Bulk Drugs | Formulations| Average gestation Period| US FDA Approved| 300-400| 500-600| 18-24 Months| Others| 150-200| 250-300| 6-12 Months| Also, unapproved units have lower gestation periods. The average gestation period for a US FDA-approved manufacturing facility is 18-24 months as compared to 6-12 months for an unapproved facility.
Similar is the scenario in the pharmaceutical sector. Investments will dry up due to higher lending rates. As most of the revenue is driven by the new investments by the pharmaceutical companies, expenditure might be seriously affected. Global Economic Downturn: Many companies in the pharmaceutical sector have been exporting to North America and Europe. Down turn and lower spending in these areas will severely affect the demand of Indian origin generic medicines resulting in low export for pharmaceutical sector.
The Term Paper on Indian Pharmaceutical Companies
1. OBJECTIVES One objectives of the post-1994 policy regime was the incentivisation of pharmaceutical research and development (R &D). Innovative products were given exemption from price control; a number of financial scheme were made available to firms for undertaking R&D; technology collaboration were brought under the automatic approval route; and most importantly, patent rights were ...
The impact may not be as high compared to other sectors as drugs are a necessity rather than a luxury item and also due to relatively high dependence of the companies on Indian markets and other developing markets. Increasing Income: Increasing income level of the common people will increase the spending on drugs. People will be ready to pay for drugs for cure. Higher income level will lead to deep penetration of pharmaceutical companies in the healthcare sector of India especially in the rural areas. This will have a positive impact on pharmaceutical sector.
Government Policies: Government is one of the largest spenders in pharmaceutical sector through government hospitals. With every year the government spending on the pharmaceutical sector is increasing to improve the healthcare facilities in India. The government is launching various schemes to improve the health status of people in the country. Government plans of taking healthcare facilities to the doorstep of every people so that everyone in India have access to the healthcare services will increase the demand of the drugs, which in turn will increase the growth of the pharmaceutical sector.
Inflation: Pharmaceutical sector sector is relatively immune to inflation. Drugs being a necessity rather than a luxury product will always be in the demand. People will spend on drugs as it is one of the necessities. But the new projects might dry up due to high inflation. High inflation may put a large entry barrier for the coming companies but the existing ones are relatively immune to inflation. Literacy: Literacy is one of the prime drivers of pharmaceutical sector.
The Essay on Revised Harm Principle Drugs Drug Government
An Argument for the Legalization of Drugs, Based on John Stuart Mills' 'Revised Harm Principle' The question of whether or not to legalize certain drugs has been debated for decades. Although opponents have thus far been successful in preventing this, there are nonetheless a substantial number of people who believe that legalization should be given a chance. Their arguments range from the seeming ...
