Ranbaxy tops the list of the country's pharmaceutical companies, followed by Glaxo, Dr Reddy's, Cipla, Wockhardt, Torrent, Lupin, Cheminor and Nicholas Piramal, according to a study conducted by Lehman Brothers on the Indian pharmaceutical industry.
The study has identified six key factors that support success in the pharmaceutical industry. They are:
Product range and pipeline, brand recognition, distribution capabilities and the network of medical representatives, international ties in order to access foreign markets and source new products, access to raw materials, in-house research and development, and track record with regulatory agencies.
Based on these criteria, Lehman Brothers have rated and ranked the nine major Indian pharmaceutical companies.
The study has identified the existing product range and the product pipeline of Indian formulation manufacturers as the most critical success factor for the pharmaceutical companies.
The report points out that a company's skill in process engineering is the indicator of its ability to bring new products to the market, which in turn raises its probability of success.
In regulated markets, the generic version of a drug is launched on the patent expiration date. This gives the generic manufacturer a window of three years on average to exploit the product before competitors drive down margins.
All major international drug makers are expected to seek joint ventures or affiliations with Indian companies to source bulk intermediaries within the next two to three years.
The study says that a critical success factor for a pharmaceutical firm is its ability to constantly bring new drugs to market. In India, more than 75 firms have made investments in R&D, but no more than a dozen companies will reach critical research mass by 2005, since the molecule research skills are different from low cost process development skills. Access to quality raw materials from facilities accredited with following good manufacturing practices will become more important. Indian companies which have so far been focussed on exporting bulk drugs, will have to move downstream and enter the export market for formulations.
The major drug export houses are already attempting this and the transition is expected to take place in phases.
Brand recognition and product distribution will gain significance and the study estimates that within the next five years poor quality manufacturers will be kept out. The study points out that generics have met with little success in brand building in many regulated markets. This is because in a strict regulatory environment where quality is monitored closely, there is no perceivable difference between two generic products.
The Lehman Brothers report says certification of good manufacturing practices (GMP) from a regulatory agencies will be essential for a company since it distinguishes drug manufacturers from speciality chemical manufacturers.
