OBSERVERS BULLISH ON INDIAN MARKET GROWTH

A string of new reports by respected market observers once again highlights the potential of India's pharmaceutical market. The newest major study, by PriceWaterhouseCoopers (PWC), has underlined that rapid growth in population and prosperity are set to be the industry's key drivers, at least in terms of drug consumption.

PWC's far-sighted study claims that India's economy is set to expand by an average 5% per year over the next 45 years, the highest rate of any emerging market. Notably, despite wide income gaps, the key middle class already accounts for 20% of the population and is set to become sizeable throughout Western and Southern and India over the next few decades.

Unsurprisingly, this will bring increased consumption of treatments for diseases associated with longevity, such as cancer and cardiovascular disorders, as well as growth in the rapidly liberalising private health insurance sector. Private patient out-care already accounts for 60% such services in India.

The report also examines attractive tax breaks offered to potential foreign investors in free-trade zones and R&D institutions, as the government seeks to lure finance towards much-needed technology transfer as well as economically deprived areas.

The generics sector also receives praise from PWC. India accounts for 20% of global generics production and having a long history of pioneering manufacturing methods intended to avoid patent infringement. The likes of Teva, Novartis and Germany's Ratiopharm are all investing in new production facilities in India.

Nevertheless, the studies understate the present challenges posed by India's occasionally difficult operating environment for multinationals. Poor distribution infrastructure, weak health provision, bureaucratic and harsh pricing — as well as uneven enforcement of new patent laws — are all major risks associated with India's rapidly evolving drug market.