The Mood Alters ; the Expected Consolidation in the Domestic Pharma Industry Could Have Well Started Last Year. Prices Held Better, There Was a Flurry of New Launches and the Big Players Got Bigger. Or so Reveals Org Ims' Pharma Review of 2004.

Business Today › May 26, 2005

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Summary

Phew! That's the sound of a collective sigh of relief coming from the Indian pharmaceuticals industry. After years of uncertainty over the exact nature of the new product patents regime and introduction of a value-added tax (vat), companies are glad to get on with business on a surer footing. Despite last-minute concessions to its allies, the government has rammed through the Patents Bill into law, and despite the BJP-led states doing a volte-face, vat has been rolled out in 21 other states.

Yes, the switchover to vat this April has impacted sales (for some of the top companies, first quarter offtake by wholesalers is down 30 per cent on average), and there are signs that the consumer may have to pay more for some new drugs, but the fact remains that the pharma companies now have a better sense of where they are headed. It is evident, for example, that there will not be any significant change in the status quo for another two to three years; it is also clear that companies that don't have strong brands or a clear niche to operate in, will in the long term face extinction. On the other hand, those with a strong portfolio, marketing and distribution muscle, sophisticated R&D capabilities, and a global play-characteristic of Tier I companies-will not just survive, but thrive.

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The Mood Alters ; the Expected Consolidation in the Domestic Pharma Industry Could Have Well Started Last Year. Prices Held Better, There Was a Flurry of New Launches and the Big Players Got Bigger. Or so Reveals Org Ims' Pharma Review of 2004.

To get a glimpse of what's to come, one only has to look at what happened last year in the domestic market. According to org IMS' Market Intelligence Report, which tracks pharma's retail sales on an annual basis, the Rs 20,500-crore industry grew 6.4 per cent in value terms. Driving the growth, once again, were new launches (that is, drugs launched between 2003 an...

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