Indian pharma must step up R&D, compliance focus for global play

This piece of news in today's Economic times perfectly analyzes the Indian pharma industry's hurdles going global. 

Read more at:

http://economictimes.indiatimes.com/articleshow/49264964.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

What takes one from A to B doesn't necessarily help in moving from B to C. That's the situation with the Indian pharma industry as it grows to tap the opportunities in the global healthcare market. The industry has reaped the low-hanging fruits of low-cost generics, making Indian pharma companies one of the most profitable ones globally. But, the future is likely to be tough with profitability coming under pressure.

The article discusses about problems like

1. The cost of compliance is slated to increase in the years ahead. 

2. The regulatory clamps faced by Indian pharma companies from foreign drug regulators.

3. Increasing investment towards research and development from the current average of 6-7 per cent of their revenues. 

4. Global pricing pressures in drugs area.

5. The rampant consolidation in the global pharma landscape with Indian companies also buying assets to scale up inorganically. 

To cut dependency on a single market, companies are diversifying geographic footprint. This increases their risk profile as they are subject to the vagaries of the different markets they enter. For instance, companies faced pricing pressure in Germany and currency volatility was aproblem in Russia and CIS countries.

The overall risk profile of the pharma sector has changed in the recent years. Make no mistake. It's no longer a classic defensive sector.