India is one of the fastest growing pharmaceutical markets in the world, growing at a CAGR of almost 10% consecutively over the last five years. From being a purely reverse engineering industry, it has transformed into a research-driven, export-oriented global industry, offering a wide range of value-added products and services. The post patent era has placed it on a new growth trajectory. Strengthening of patent laws is encouraging MNCs to significantly increase the scale of investments and explore the Indian market. Today, no global pharma major can ignore India either as a competitive sourcing base or as a destination to benefit from the rapidly growing domestic drug market. It is quite remarkable to note that today several Indian pharma companies are approved by US Food and Drug Administration (FDA) and are listed on NASDAQ and NYSE. In fact, since the beginning of this decade, it has been the 10th largest receiver of FDI in the country.
Improving rate of health insurance penetration, boost from medical tourism segment, and favorable regulatory mechanism and support from government have all contributed to the domestic formulation market growth. Due to the spurt in global generics market and superior margins, the export market is witnessing a faster growth than the domestic market. Today, the industry ranks 4th in terms of volume, with approximately 8% share in global sales. In terms of value, it ranks 13th and produces 24% of the world's generic drugs. With a share of about 6.5%, Indian pharma industry is also one of the top five Active Pharmaceutical Ingredients (API) producers. The industry ranks 17th with respect to exports value of bulk actives and dosage. The pharmaceutical exports in 2007-08 stood at $6.68 bn, up against $5.73 bn in 2006-07, registering a growth rate of 16%.
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