India Drug Market Expands, Eyes Potential Opportunities in South America
By Lori Clapper
Riding on the coattails of Argentina’s move to permit Indian finished drug imports last month, officials in Peru now plan to investigate the loan licensing system in India. A loan-licensing system is essentially a form of contract manufacturing, as a small or medium sized pharma company can utilize another company’s licensed manufacturing facility to create drugs targeted for a particular market, The Business Standard says.
Peru’s decision also comes after a visit from a delegation led by Sudhanshu Pandey, the joint secretary, department of commerce, ministry of commerce and industry for India, which recently spent some time in Peru, Argentina, and other Latin American countries.
"Peru had put all applications from Indian pharma companies using the loan-licensing system. They had some doubts related to this process and we have explained to them even regulated markets like the U.S. and the European Union (EU) allow such contract manufacturing and that the Indian government permits it," P V Appaji, director general of the Pharmaceutical Export Promotion Council (Pharmexcil), told the Business Standard.
Although Peru is a smaller market compared to other Latin American countries, it could open up opportunity for smaller pharma companies, rather than for Big Pharma, according to Alok Dalal, pharmaceutical analyst with Motilal Oswal. He did note that the opening of Argentinian market, due to its larger population, will likely open up ample opportunities for Indian drug makers as a whole. The drug market in Argentina is currently $6 billion and is expected to grow to $15 billion by 2020.
For the Indian pharma industry, South America has always been an important market to potentially drive industry growth. India’s manufacturing cost effectiveness, along with the right collaborations “may help immensely in making a successful headway in the region,” according to a Business Standard report. This is especially true in the production of biopharmaceuticals, since they are normally very expensive to make, yet highly prescribed because of their effectiveness.
Currently, about eight percent of India’s drug exports go to Latin American countries.