A first look at the survival status of Indian generic drug giants

According to relevant data from India, the total sales of Indian pharmaceutical companies in 2021 will be 41 billion US dollars, of which 24 billion US dollars will come from external exports, with an export rate of 60.

According to relevant data from India, the total sales of Indian pharmaceutical companies in 2021 will be 41 billion US dollars, of which 24 billion US dollars will come from external exports, with an export rate of 60.

In 2021, the top 5 generic drug giants in India are Sun, Arabindu, Cipra, D.

Change in sales of Indian generic drug giants (Rs mn)

Due to the small domestic market in India, the survival and development of Indian generic drug giants generally depend on the US marke.
It is not so much the world pharmacy as the US pharmacy, because 40%-60% of the sales of the five generic drug giants come from the US marke.
Europe and Japan account for only a small percentag.
After 2015, the .
.
generic drug market has gradually shrunk, and price competition has become extremely fierc.
The business growth of Indian generic drug companies has generally encountered bottlenecks, sales growth has slowed, and some companies have even experienced stagnation and declin.
Not only that, because of the fierce price war, the Indian generic drug giants, known for their low cost, are also obviously strugglin.
The profitability of the five generic drug giants has dropped significantly, and the average net profit level has gradually dropped from 18% in 2010 to 202 of 8.
Changes in the profitability of the top five generic drug giants in India (net profit/total revenue) For the Western generic drug giants, the cost advantage of Indian generic drugs is unmatched, which is the main reason why Indian generic drugs can revel in the United State.
Between 2010 and 2021, Indian generic drug companies have won 2,600 ANDA approvals, accounting for 36% of the total ANDA approvals during this period, and their market share has gradually risen to more than 20.
Indian generic drug companies also face competition from their Indian counterparts, which has accelerated the arrival of "bottlenecks.
In order to break this bottleneck, Indian giants are either looking for alternative new markets or product differentiatio.
In terms of developing new markets, Taiyo Pharma has worked hard to develop the Japanese and European markets, but with little effec.
Compared with the US market, the European market is fragmented and comple.
Only companies that have invested in the capital can establish a leading advantag.
Among Indian companies, except for Arabindu, the sales of other companies in the European market account for almost 15.
.
The Japanese market is even more distinctiv.
Few multinational generic drug giants can gain an advantag.
Most of the companies just made a profit for a period of time and finally left the marke.
In order to seek market differentiation, Rubin is actively exploring the Latin American market, Cipla is trying to explore the Middle East market, and D.
Reddy is trying to open up the Chinese marke.

In addition, in recent years, these Indian companies that have successfully gone overseas have set their sights on India, and the rapid growth of the local market is their main weapon to break the bottlenec.
The specific reason is that after 2005, India recognized drug patents, and innovative drugs began to gradually pour into the Indian marke.
Generic drug giants used their strong market influence to authorize sales to bring additional sales growt.
amoun.
In addition, with the take-off of the Indian economy, the Indian market will surely bring them a certain period of carniva.
In terms of seeking product differentiation, Indian generic drug companies have no obvious "good tricks" and are generally learning from the Wes.
That is, through the establishment of a technology platform, the strategy of using generic drugs and innovative preparations to drive both, while increasing high-barrier generic drugs, develop improved specialty drugs, especially in dermatology, ophthalmology, women's health care and respiratory diseases where the replacement of innovative drugs is not activ.
Sectio.
Many years ago, almost all of the five major Indian giants have mastered various oral sustained and controlled release technologies, so oral sustained and controlled release is no longer a scarce resourc.
In recent years, the major giants have been developing inhalation technology, and almost every company has inhaled preparations approva.
, but only Cipla can claim an international lea.
Because the US market mechanism is relatively simple, the early Indian companies developed too smoothl.
With the advantages of low labor cost, low environmental protection cost and perfect industrial chain, all they need to do is to obtain as many ANDA approvals as possible and maximize production capacit.
Therefore, the early development models of Indian generic drug companies are relatively extensive, and "high R&D investment + high production capacity" can ensure the stable development of the busines.
For this historical reason, the R&D investment of Indian generic drug companies is generally higher than that of Western giant.
Although it has declined somewhat in recent years, it is still higher than the Western leve.
According to the author's statistics in the early stage, the R&D investment of Western generic drug giants is generally between 5% and 6.
Only companies developing innovative drugs or biosimilar will increase their R&D investment to 8%-10.
That is to say, about 6% of R&D investment can maintain the normal operation of the generic drug business, and for giants that focus on OTC and health care, R&D investment is generally as low as 3%-4%
However, the average R&D investment of the five Indian giants in the past 10 years is 4%, of which D.
Reddy has the highest rate of 12%, Rubin also has 7%, and the Arabin degree is relatively low, only 2.
The R&D investment of Western generic drug giants is generally between 5%-6%, and only companies developing innovative drugs or biosimilar will increase their R&D investment to 8%-10.
That is to say, about 6% of the R&D investment can maintain the normal operation of the generic drug business, and for the giants that focus on OTC and health care, the R&D investment is generally as low as 3%-4.
However, the average R&D investment of the five Indian giants in the past 10 years is 4%, of which D.
Reddy has the highest rate of 12%, Rubin also has 7%, and the Arabin degree is relatively low, only 2.
D.
Reddy's was the highest, reaching 12%, Rubin also had 7%, and the Arabin degree was relatively low, only 2.
Due to the relatively low labor cost in India, the per capita efficacy of Indian generic drug giants is generally low, and the annual per capita sales are mostly between 100,000 and 150,000 US dollar.
Even the most leading Sun Pharmaceuticals, the per capita efficacy is only Tev.
One-third, one-half of Hikma, so Indian generic drug companies have huge room for cost optimizatio.
In fact, Indian generic drugs are not afraid of price competition from Western giants, but they are afraid of competing with their domestic counterpart.
Therefore, far-sighted companies have begun to optimize personnel costs and improve personnel efficienc.
Only when the per capita efficiency increases can they compete with their local counterpart.
The per capita efficacy of the top five generic drug giants in India (per capita annual sales, in 10,000 US dollars) Compared with Europe and the United States, the generic drug giants in India are almost all family-controlled, not fully market-oriented companie.
Therefore, their development is greatly influenced by their families, and they are not flexible enough when encountering problem.
However, the advantage is that there is little pressure on business development and almost no financial aggressive behavio.
Therefore, the asset status of Indian companies is generally better than that of Western generic drug giant.
In recent years, with the intensification of competition, Indian generic drug companies have also begun to learn from the West and plan their own development strategies finel.
Some companies have recovered their sales after breaking the bottlenec.

Changes in sales of the top five generic drug giants in India (millions of dollars) Note: The above content only represents the author's personal view.
If there is any extreme or wrong, please criticize and correct the reader.