Business   

China preferred choice for pharma cos. — study

Staff Correspondent

Indian cos. need to be innovative to turn out quality drugs

MUMBAI: China is considered a preferred choice over India by nearly 90 per cent of pharmaceutical executives for low-cost drug manufacturing, according to a survey released by Bain & Company, a leading global business consulting firm. Worryingly, only 17 per cent of the survey's respondents cite innovation as a key asset of Indian drug makers.

Bain's sampling of 179 international executives with headquarters in North America, Europe, Asia and India also expressed concerns about intellectual property protection (56 per cent), parallel trade or grey market imports (52 per cent) and regulatory uncertainty (46 per cent) affecting the Indian industry.

"The Indian pharmaceutical industry now stands at the crossroads,'' said Ashish Singh, Managing Director, Bain & Company India. "If India is looking to be the home for quality generic drugs, it needs to step up its innovation game.''

Despite current concerns with India's pharmaceutical industry, international executives increasingly expect greater collaboration here in the future. While only 38 per cent of the respondents now consider doing business in India to be `extremely important,' that number jumps to 62 per cent when survey participants were asked to project the marketplace five years from now. Similarly, 35 per cent characterised India as an `attractive' market in 2006 (as a domestic market for drug purchase and consumption), while 58 per cent expect it will be `attractive' by 2011.

Sixty per cent of the respondents believe that Indian pharma companies will improve their capabilities through the end of the decade in such areas as risk-sharing, product depth, increased scale and expanded expertise.

Bain has recommended that Indian pharma companies should strive for low cost leadership in their core generic drug businesses through a rigorous focus on operating efficiency and begin to invest in innovation. The Indian government should create the right investment climate for both multinational corporations (MNCs) and Indian companies by addressing key concerns over intellectual property protection, parallel trade and regulatory uncertainty.

Bain has also recommended that MNCs should start investing now to take advantage of the Indian domestic market as well as capabilities that India offers, "but do it in a measured way, while pressing for regulatory reforms.''

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

SEZ approvals limit to be raised from 150
China preferred choice for pharma cos. — study
Two new tax saver schemes from CUB
Bullion rates

Copyright © 2006, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu