Indian Pharmacutical Industry

DEFINATION OF PHARMACUTICAL:

The word "pharmaceutical" is derived from the Latin pharmaceuticus and the Greek pharmakeutikos. By 1648 the word was in the English language and meant, "relating to the pharmacy and the manufacture and sale of drugs," by 1881 it meant "a medicinal drug." The United Nations' World Health Organization definition of a pharmaceutical is "any substance or mixture of substances manufactured, sold, offered for sale, or represented for use in the diagnosis, treatment, mitigation, or prevention of disease, abnormal physical state or the symptoms thereof in man or animal and for use in restoring, correcting, or modifying organic functions in man or animal."

GLOBAL OVERVIEW OF PHARMACUTICAL INDUSTRY:

The pharmaceutical industry is one of the most profitable industries in both the US and Great Britain. Gross Profit margins of some of the leading pharmaceutical companies in recent years has been around 70 to 80 percent

Global pharmaceutical turnover in 2005 was US $602 billion (approx. Ð'Ј309 billion). This follows a period of rapid growth in the sector. UK sales contribution was 3.5 % of total global sales, Europe contributed around 30% & the U.S. share was 45% of total global sales. Most common area where the world pharmaceutical expenditure have gone are cholesterol, triglyderide reducers, antiulcerants, cytostatics and antidepressants. In present world the companies have a portion of its cost as global as they can be carried out anywhere in the world. Research & development (R&D) and most manufacturing costs fall into this category, which is about 65 to 70 per cent of total costs.

The U.S. and U.K have dominated the pharmaceutical sector that enables them to dictate drug prices. In past recent years, the prices of pharmaceutical have fallen and risen much faster than the inflation rate. A patient will not change the demand for a product with a small change in price when there are no close or available substitutes. Actual manufacturing costs of medicines are relatively low. The pharmaceutical industry represents one of the fastest growing industry sectors in the world today. Discovery of drug has been key to the development of new therapies, increasingly pharmaceutical companies are depending on the development of new product formulations to maintain market share.

OVERVIEW OF INDIAN PHARMACUTICAL INDUSTRY:

The Indian Pharmaceutical sector today is a highly organized sector; the Indian Pharmaceutical Industry is estimated to be worth $ 6.0 Billion of the $600 Billion global pharmaceutical industry, growing at about 10% annually in comparison to 7% annual growth for the overall world markets and this figure speaks of a very promising scenario. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. In India we are able to manufacture medicines from simple headache pills to sophisticated antibiotics and complex cardiac compounds. We can say that every type of medicine is now made indigenously. This sector is highly fragmented with more than 20,000 registered units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical companies control 70% of the market with market leader holding nearly 7% of the market share. It is an extremely fragmented market with severe price competition and government price control.

Around 70% of the country's medicines requirements are fulfilled in India itself. Which includes demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India. These units produce the complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations. Following the de-licensing of the Indian Parma Industry, industrial licensing for most of the drugs and pharmaceutical products has been done away with. Manufacturers are free to produce any drug duly approved by the Drug Control Authority. Technologically strong and totally self-reliant, the pharmaceutical industry in India has low costs of production, low R&D costs, innovative scientific manpower, strength of national laboratories and an increasing balance of trade. The Pharmaceutical Industry, with its rich scientific talents and research capabilities, supported by Intellectual Property Protection regime is well set to take on the international market.

COMPANY BACKGROUND:

The Chemical, Industrial & Pharmaceutical Laboratories, which came to be popularly known as Cipla was founded by Dr. Khwaja Abdul Hamied In 1935, He gave the company all his patent and proprietary formulas for several drugs and medicines, without charging any royalty. Cipla was registered as a public limited company On August 17, 1935 with an authorised capital of Rs 6 lakhs. He started his pharmaceutical business in a small bungalow with a few rooms, which was taken on 20-year lease @ Rs 350 per month at 289, Bellasis Road, which is Cipla’s present corporate office.

On September 22, 1937, Cipla was officially launched when the first products were ready for the market. The Sunday Standard wrote: "The birth of Cipla which was launched into the world by Dr K A Hamied will be a red letter day in the annals of Bombay Industries. The first city in India can now boast of a concern, which will supersede all existing firms in the magnitude of its operations. India has lagged behind in the march of science but she is now awakening from her lethargy. The new company has mapped out an ambitious programme and with intelligent direction and skilful production bids fair to establish a great reputation in the East. "

This was the first and last time on October 31, 1939 in the company’s books when Cipla has shown loss of Rs 67,935. In 1942, Indian Government has accepted Dr Hamied’s proposal of blueprint for technical research institute. And led to the birth of the Council of Scientific and Industrial Research (CSIR), which is today the apex research body in the country.

In 1944, first class modern pharmaceutical works and laboratory was set up at the company new premises at Bombay Central and also decided to acquire land and buildings at Vikhroli. As there were severe import restrictions that were hampering