THREATS
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Uncertain business climate after 2005 due to implementation of IPR.
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Expensive upgradation due to WHO, GMP and revised schedule M.
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Intense pressure on R & D costs.
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Drug price control.
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Increasing interest in herbal drugs and indigenous systems medicines (ISMs) (because of low price and less regulations) industries are moving away totally from NDDR for diseases.
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Greater competition for SMEs due to the removal of protective frame work resulted from the liberalisation and globalisation of Indian economy.
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Large scale mergers and acquisitions may result in big trading houses rather than knowledge based innovative pharma industry.
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Trade unionisation adopting arm-twisting tactics and increasing the man power cost. Devaluation of Indian currency will escalate the cost.
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Any sudden change in International regulatory policies will have adverse impact on the Indian Pharma industry.
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Product patent regime will slow the growth of industry.
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Sales cost going up.
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Infringement of patented products (specially herbal and Biotechnological) will add the cost of litigation.
CHALLENGES CONFRONTING THE PHARMA INDUSTRY
Developing countries, especially China, will mount tough competition for Indian manufacturers in the coming years through its huge production capacities and an inherent strength to deliver large quantities at short notice. The Chinese manufacturers have also been rapidly upgrading their technology base.
Internationally, the pharma industry is facing sluggish growth in sales and increasing R & D costs. The choice in front of pharma leaders are only two: (i) make R & D more productive, or (ii} make each of the drug, a blockbuster. The industry forecast states that the pharma industry structure would change dramatically after 2005 with only few producers reigning the market.
Trained Personnel : There is an unmet demand for trained personnel at a reasonable cost. This problem is in fact acute for small firms since they cannot afford highly qualified persons. Even larger units find it difficult to get people who are well trained in regulatory and technical aspects. It is expected that job opportunities in the shop floor would be reduced with automation, whereas those in marketing, product management, formulation development, production planning and inventory control, quality control and quality audit will expand.
Access to Information : Small firms are finding it difficult to avail right information, technological as well as regulatory. This problem is accentuated by the fact that local market pressure can dampen improvement in the technological sphere. It is essential to make available correct and relevant information to small firms. Similarly, there is also a need to provide them with sources of proven technologies.
Specialization : Unlike entrepreneurs in the past who had a huge market to explore from, those of the present generation are finding it difficult to stay in business, be it due to rising quality expectations or shrinking profitability criterion. In their effort to maximize profit and stay in business (the profit being low), many units have adopted the 'me-too' approach in business. Rather than find competitive advantage through specialisation, they get into the trap of making hundreds of products -as many types of drugs as demanded in the local market or at least as indicated temporary market needs. Interestingly the product profile (hundreds of products) changes with changing market demand. With such diverse product profile, it is not easy to go for WHO-GMP or have a good resource management.
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