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THE PHARMA REVIEW (NOVEMBER - DECEMBER 2014)

Evolving Regulatory Environment Indian Pharmaceutical Industry

Alok Sengupta & Shaheen Merchant

Introduction: The Indian pharmaceutical industry is experiencing constant change. On the demand side, we see a rise in the aging population, increased prevalence of diseases, and a steady growth in the access to pharmaceuticals; whereas on the supply side, we witness an increased competition from players of the emerging market, as well as a shift in the way drugs are being developed, manufactured, and delivered. Policy makers find themselves in a constant battle, struggling to provide improved access to better medicines and at the same time trying to curb the growth of healthcare expenditures. However, owing to many reasons and the health care infrastructure in India, there has been a slowdown in the growth of the top Indian as well as multinational companies (MNCs), the slowdown being more prominent with the MNCs. Implementation of the National Pharmaceutical Pricing Policy 2012 by the government of India has resulted in the gradual decline of profit margins from 20% to 16% for retailers and 10% to 8% for stockists respectively. This decrease in the stockist margins led to a significant uncertainty among many of them regarding the feasibility of staying in business. 

 

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