SWOT Analysis of Indian Pharma Industry

India advantage

• Cost competitiveness due to lower labour cost and production cost
• Well-developed industry with strong manufacturing base
• Well established network of Laboratories and R & D infrastructure for new drug discovery and development
• Access to pool of highly trained  and skilled scientists, both in India and abroad
• Strong marketing and distribution network in domestic as well as international market
• India is second largest country in terms of population in world with rich biodiversity
• Expertise in reverse engineering and development of new Chemical process made Indian pharmaceutical industry as one of the strongest generic industry

Weaknesses

• Low investment in innovative Research & Development
• Lack of resources to compete with MNCs for New Drug Discovery Research and to commercialize molecules on a worldwide basis
• Lack of strong linkages between industries and academia
• Lack of culture of innovation in the industry
• Low  per capita medical expenditure and healthcare spend in country
• Inadequate regulatory standards
• Production of spurious and low quality drugs tarnishes the image of industry at home and abroad

Emerging trends and opportunities

• Significant export potential to the developing as well as developed countries
• Licensing deals and collaborations with MNCs for New Chemical Entities and New Drug Delivery Systems
• Providing marketing operations to sell MNC products in domestic market
• India can be niche player in global pharmaceutical R & D by developing world class infrastructure
• Contract manufacturing arrangements with MNCs
• Potential for developing India as a centre for International Clinical Trials
• Increasing aging world population
• Increasing incomes and buying power of people especially in rural areas has opened the great opportunity for Indian pharma companies. Around 70% of the total population of India is residing in rural areas.
• Growing awareness for health and increasing spending on health

Threats

• Product patent regime poses serious challenges to domestic industries unless it invests in R & D.
• R & D efforts of Indian pharmaceutical companies hampered by lack of enabling regulatory requirement. For instance, restrictions on animal testing out-dated patent office.
• DPCO puts unrealistic ceilings on product prices and profitability and prevents pharmaceutical companies from generating investible surplus.
• Exports effort hampered by procedural hurdles in India as well as non-tariff barriers imposed abroad.