How International Trade affects Indian Pharmaceutical Market??

Pharma crunch imageb1With the increasing international trade kiosk from the biggest Pharmaceutical market, raising negotiations with American Pharma giants to focus on local trade by President Trump administration, and decreasing monopoly of western pharma companies at global contexts. We can expect some newer policies on International trade in Pharmaceuticals as well & it’s obvious that any new policy in International trade may affect Indian Pharma Industry(IPM) as well especially when it comes to the United States of America being the undisputed contributor to global pharma market(GPM)

So let us understand how these international trade benefits IPM & health index of the nation as a whole.

  1. International trade in Pharmaceuticals boosts commercial opportunities for both the trading partners; create a sustainable business source outside of existing market. The MNCs gets the new market to expand businesses outside their domestic market & at the same time, Indian players can try their fortune in newer potential geographies.

    Ex: Anti-retroviral treatments for HIV to African countries by many Indian Pharmaceutical giants (Cipla being leader in this segment)

  2. It allows the Indian residents to avail the better promising treatment options because of inflow of newer medicines as the principle of top to the bottom flow of technology. Therefore moving up the health status of India on global health index.

    Ex: Several life-threating treatments are available in Indian market (Hep-C, Oncology etc.)

  3. International trade enhances the competitiveness of Indian pharmaceutical companies, most often by engaging in JVs & marketing alliances. 

    Ex: JV between USV & Novartis has given an opportunity to USV to build a strong muscle as an anti-diabetic leader.
    Ex: Marketing alliance between MSD & Lupin for “Pneumovax-23” vaccine has given an opportunity to Lupin to sell a blockbuster vaccine.

  4. It reduces poverty by generating growth, reducing risk through increased investment climate.

    Ex: Cumulative FDI inflows worth US$ 13.85 billion between April 2000 and March 2016, according to data released by the Department of Industrial Policy and Promotion (DIPP)

  5. It also reduced the cost of inputs and at the same time ensures value addition to products hence making drugs relatively cheaper.
    Ex: Bulk drugs import from China

  6. It facilitates exports diversification, giving local generic players access to the new market, challenging the MNCs in their home countries in terms of quality & affordability. Therefore, allowing them to develop new production capabilities.

    Ex: Aurobindo Pharma, Hetero Labs & Akums each has built dedicated manufacturing plants for regulated markets.

  7. It increases innovation in the IPM by exchange of “Know-how”, by technology transfer & also by R&D investments.

    Ex: In licensing & Joint R&D exercises (Jubilant, Ajanta & Glenmark for various in licensed projects)

  8. Trade expands choices to the physicians to select the best fit. It also reduces costs because of adequate supply over created demands.

    Ex: Increased anti-diabetic drug options for prescribers.

  9. International trade also exchanges the best practices, hence encouraging Indian pharma players to adapt the global standards in all dimensions.

    Ex: Quality of drugs, working cultures, compensation standards, welfare policies for employees & safeguarding of environmental standards.

  10. The opportunities for Indian Players to “Go Global” has emerged IPM as a sector with comparative advantages.

    Ex: 20% of global exports in generics, making it the largest provider of generic medicines globally Ex: India is expected to be the third largest global market for active pharmaceutical ingredients by 2016, with a 7.2% increase in market share.


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