Good News for Pharma: India is Getting Sicker- October 22, 2010,

* October 22, 2010, 2:30 PM IST

Good News for Pharma: India is Getting Sicker

(BIT OLD NEWS BUT DO NEED ATTENTION...VIBHA)

By Geeta Anand

It may sound like bad news for the average Indian but it’s good news for the pharmaceutical industry.

A report from the U.S. consulting firm McKinsey & Co. released Friday projects that the Indian pharmaceutical market will balloon to $55 billion by 2020 if the population continues to grow at its current rate—and the prevalence of illnesses continues its rapid rise.

The 1.3% annual rise in the population, plus a steady increase in disease, will make the patient pool in India 20% larger in ten years that it is today, the report said.

At $55 billion in annual sales, the pharmaceutical industry will be four times its current $12.6 billion size, according to the report. If things go super well, according to what McKinsey calls the “aggressive growth scenario,” the industry could grow even faster to $70 billion by 2020.

But McKinsey also said too many regulatory controls and an economic slowdown could depress the growth of this key segment of the Indian market and produce only a $35 billion market in ten years.

McKinsey expects pharmaceutical markets in four developing countries—India, China, Russia and Brazil—to spearhead future growth as the industry slows in the U.S., currently the biggest market in the world.

“While growth in the developed markets will decrease, growth in the emerging markets will become increasingly important in coming decades,” the report said.

India offers unique challenges and benefits, the report said. It has huge volumes but low price. It is the third largest market in terms of volume but only the 10th biggest in terms of value.

Between 2000 and 2005, the Indian pharmaceutical industry recorded compound annual growth of 9%, which has increased to around 13% in the last five years, the report said.