Multinational Pharma Companies' Declining Presence in India's Pharmaceutical Market
Pharmaceutical Multinational Corporations Continue to Witness Reduced Market Presence in India
The fingerprints of multinational pharmaceutical giants on India's drug scene have been diminishing dramatically. By May 2025, their share dipped to a staggering 14.5% from a towering 22% in 2013, according to Pharmarack's reports.
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The downfall rocketing downwards, the market share of these foreign drug mavericks has been dwindling year after year since the peak in 2013. As per Pharmarack, the share plummeted slightly from 14.8% in the previous month.
The main force driving this slide is a perfect storm of factors:
- Expired Patents: In recent times, numerous patent expirations on blockbuster drugs have led to a stiff battlefield in the branded generics landscape.
- Negligible Focus: The bigwigs of the multinational sector have kept their eyes off the branded generics segment, leading to less competition for the local players.
- Quality Strides: The domestic pharma industry has leapfrogged in terms of quality standards, matching or even surpassing the quality of their international counterparts.
Behind closed doors, industry insiders have spilled the beans about MNCs throwing their hats in the ring for niche therapy areas like oncology and transplant, where the patient base might be relatively small but the level of specialization is enormous.
Once their patent-protected drugs expire, local pharmaceutical companies knock off their equivalents at one-fifth or one-tenth of the original drug's price, causing a sizable dent in MNCs' profits. As the years went by, homegrown pharma companies stepped up their quality control game to par with—and sometimes surpass—their international rivals.
At present, approximately 30 pharmaceutical multinationals rule India's market, but the big players like Sanofi and Eli Lilly have been gradually shifting their focus away from the Indian turf. Sanofi, for example, has handed over its core products to Indian firms such as Emcure, Encube Ethicals, and Universal NutriScience, focusing only on consumer business. Eli Lilly has granted their India marketing rights to Cipla.
The legal landscape in India also ain't always favorable to multinationals. For instance, the ongoing legal feud between Reddy's Laboratories, OneSource Specialty Pharma, and Danish pharma titan Novo Nordisk serves as an illustration. Novo Nordisk filed a patent infringement lawsuit against Dr. Reddy's and contract drugmaker OneSource for producing and selling the popular diabetes medication semaglutide, their covered territory.
Moreover, regulations like compulsory licensing jeopardize MNC's interests in India. This provision permits the Indian government to grant third parties the rights to produce and market patented drugs without consent from the patentees under exceptional circumstances.
With healthcare bills rising steadily worldwide, the demand for affordable generics has been surging, which benefits domestic pharmaceutical firms. Additionally, improved regulatory frameworks and clinical trial regulations in India have paved the way for increased investments in R&D, making this landscape more appealing for both national and international players, potentially eroding the competitive advantage of multinational corporations.
- In light of the decreasing market share of multinational pharmaceutical companies in India, investors might want to consider diversifying their portfolio by investing in local pharmaceutical stocks that specialize in branded generics.
- The ongoing decline of multinational corporations in India's pharmaceutical market could signal a shift towards decentralized finance (defi) platforms for financial transactions in the sector, as the demand for affordable generics increases.
- With the Indian pharmaceutical market becoming more competitive due to improved regulations and increased R&D investments, multinational finance entities might need to reevaluate their business strategies to maintain a significant presence in this ever-evolving market.
