Bharat Book Bureau

Bulk drugs Market structure and its Investments

Press Release   •   Sep 17, 2010 14:58 IST

Bulk drugs

· Bulk drugs or active pharmaceutical ingredients (API) are the raw materials for manufacturing formulations or finished dosage forms of drugs.
· As the Indian bulk drug industry is primarily export-oriented, its future prospects largely hinges on its ability to tap the opportunity arising both in the regulated and semi-regulated market.
· The opportunities in the regulated market (outsourcing/supply of bulk drugs) are expected to emerge both for manufacturing on-patent and off-patent drugs. This is in the wake of the extensive cost-reduction initiatives of global pharmaceutical companies in a bid to improve profitability and impending genericisation respectively. ( )

Market size and structure

· Bulk drugs exports account for around 80-90 per cent of the total production.
· Bulk drugs export in terms of revenue was estimated to be around $5.9 billion in 2008-09.
· India’s share in the total global bulk drug market has grown from around 3.5 - 4.0 per cent in 2003-04 to 6.5 - 7.0 per cent in 2008-09.
· Rising pressure on innovator companies to re-align costs and ensure higher scale of business at improved profitability levels has significantly enhanced supply of bulk drugs to regulated markets. Bulk drugs export to the regulated market have surged from an estimated $0.5 billion in 2003-04 to an estimated $3.1 billion in 2008-09 on the strength of growing outsourcing/supply of bulk drugs for manufacturing off-patent drugs.
· Share of bulk drug exports to regulated markets in total bulk drug exports has increased significantly from around 35 per cent in 2003-04 to nearly 54 per cent in 2008-09.
· Also bulk drugs supplied for manufacturing on-patent drugs is gaining momentum with its share rising from 1.7 per cent in 2003-04 to around 9.3 per cent in 2008-09.

Investment outlook

· The bulk drug industry is not capital intensive. However, relatively higher capital commitment is required to set up manufacturing facilities conforming to several international regulatory requirements such as approval of the plant by United States Food and Drug Administration (US FDA), cGMP compliance etc.

· Investments are expected to maintain its pace in tandem with the growth momentum expected in the bulk drug industry in the next 5 years. The sector is likely to witness investments to the tune of $ 5-7 billion in the next five years. With a continuing focus on exports, substantial investments will be directed in setting up plants in compliance with international regulatory standards.

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