'Indian pharma market may reach $130 bn in next 5 years'

India's pharmaceutical sector is expected to reach $130 billion over the next five years, as per the panels that virtually took place during the 19th edition of BioAsia organised by Government of Telangana. The current market size of the pharma market in the country is around $41.7 billion. The industry experts have brainstormed during various sessions of the two-day event.

On the second day of BioAsia 2022, the chiefs of four major pharma companies in the country participated in 'CEO Conclave' as panelists. They have discussed on various challenges and opportunities in moving up the value chain for the next wave of growth into a resilient future.

Speaking about the direction of the future investments, Dr Reddy's Laboratories Co-Chairman and Managing Director GV Prasad said: "The US is an attractive, transparent, homogenous market, which is intense in competition. The situation might not improve dramatically in terms of pricing pressures but there will be some gems where we can get revenue outage. In that sense, companies like ours will look at increasing out capital allocation to other emerging markets like India, where the revenues and margins will be sustainable."

"Our Research and Development (R&D) budgets are around double digits, but a large portion of that goes into sustaining our existing business. We have the challenge of maintaining profitability, running the core and investing in a different business with a very different risk profile. So, managing this risk to return ratio, this is a challenge that can be solved via collaborations. Our research spends are already at 10-12 per cent. In that budget, we use two-thirds to support our current businesses and one-third to build the future in biologics or novel chemical entities," he added.

Pankaj Patel, CMD of Zydus Cadila, also said that their company will be spending close to 10 per cent on research by the end of coming five years.

Dilip Shanghvi, Managing Director of Sun Pharma, said: "For short and medium terms, we will continue to invest on growing businesses across geographies like India along with the regulated markets of US and Japan. At the same time, we will also be making investments to bring new innovatory products to the markets. Currently, it is between 7-9 per cent, but we're expecting to take it to 9-12 per cent in the next five years. And we're expecting to invest between $600-650 million on research."

He further said, "I believe the investments we've made need to produce the meaning returns that we expect to generate. We have seen over a 50 per cent growth in our innovatory business in last three quarters of this year and we expect the growth to continue."

Ajay Piramal, Chairman of Piramal Group, said: "We are increasing our investments onto more complex technologies. We've done an acquisition in Peptides last year and we've done investments in biologics. So across the board, we are now increasing our focus on technologies and people."