India's drug market to reach $20b by 2015
Saturday, 25 August 2007
Amy Yee, FT Syndication Service
NEW DELHI: India's pharmaceuticals market will more than triple to $20bn by 2015 on the back of rising personal incomes, the spread of chronic diseases and the growth of hospitals and clinics across the country, according to McKinsey, the consultancy.
India's projected growth would rank it 10th globally in 2015, from 14th two years ago, McKinsey said in a report released on Wednesday. The retail sales value of India's drug market was $6.1bn in 2005 and $3.4bn in 2000.
The forecast by McKinsey implies a compounded annual growth rate of 12.3 per cent, compared with 9.0 per cent from 2000 to 2005.
The bullish forecasts are based on the swelling demand for quality health care as the country's middle class grows and "lifestyle diseases" such as diabetes, heart disease and cancer spread.
McKinsey said that greater take-up of health insurance, adoption of product patents and market penetration by smaller companies would contribute to growth.
Driven largely by private investment such as corporate hospital chains, the number of hospital beds and physicians in the country is expected to double by 2015, adding 2.0m more hospital beds and 0.4m physicians.
However, India "needs a large infusion of public health professionals", said Palash Mitra, a partner with McKinsey in New Delhi. Incentives and an overhaul of medical schools are needed to attract people to medical careers. "A concerted effort needs to be made through [government] reform," said Mr Mitra.
Health insurance remains nascent in India partly because of the dearth of quality hospitals, clinics and physicians to offer quality care. But health insurance penetration is expected to double by 2015 to cover 220m people, said McKinsey. Indian private hospital chain Apollo and DKV, Europe's largest private health insurer, this month launched a health insurance joint venture in India.
In spite of the bullish projections, Swiss drug maker Novartis said it would scale back research and development in India after losing a controversial court case this month that challenged India's patent laws. The ruling from a court in Chennai "will have long-term negative consequences for research and development into better medicines for patients in India and abroad," said Novartis.
Another potential hurdle to growth is pricing control over some drugs by the Indian government's National Pharmaceutical Pricing Authority.
NEW DELHI: India's pharmaceuticals market will more than triple to $20bn by 2015 on the back of rising personal incomes, the spread of chronic diseases and the growth of hospitals and clinics across the country, according to McKinsey, the consultancy.
India's projected growth would rank it 10th globally in 2015, from 14th two years ago, McKinsey said in a report released on Wednesday. The retail sales value of India's drug market was $6.1bn in 2005 and $3.4bn in 2000.
The forecast by McKinsey implies a compounded annual growth rate of 12.3 per cent, compared with 9.0 per cent from 2000 to 2005.
The bullish forecasts are based on the swelling demand for quality health care as the country's middle class grows and "lifestyle diseases" such as diabetes, heart disease and cancer spread.
McKinsey said that greater take-up of health insurance, adoption of product patents and market penetration by smaller companies would contribute to growth.
Driven largely by private investment such as corporate hospital chains, the number of hospital beds and physicians in the country is expected to double by 2015, adding 2.0m more hospital beds and 0.4m physicians.
However, India "needs a large infusion of public health professionals", said Palash Mitra, a partner with McKinsey in New Delhi. Incentives and an overhaul of medical schools are needed to attract people to medical careers. "A concerted effort needs to be made through [government] reform," said Mr Mitra.
Health insurance remains nascent in India partly because of the dearth of quality hospitals, clinics and physicians to offer quality care. But health insurance penetration is expected to double by 2015 to cover 220m people, said McKinsey. Indian private hospital chain Apollo and DKV, Europe's largest private health insurer, this month launched a health insurance joint venture in India.
In spite of the bullish projections, Swiss drug maker Novartis said it would scale back research and development in India after losing a controversial court case this month that challenged India's patent laws. The ruling from a court in Chennai "will have long-term negative consequences for research and development into better medicines for patients in India and abroad," said Novartis.
Another potential hurdle to growth is pricing control over some drugs by the Indian government's National Pharmaceutical Pricing Authority.