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INDUSTRIES FOR NEXT 20 YEARS
If the economic recession and the impact of pharmaceutical industry in 2011 and 2012 the
number of patent expired products to consider together, the research institutions are expected
between now and 2013, the global pharmaceutical market at an average annual compound
growth rate (CAGR) for the 3% to 6%, while between 2004 to 2007, the growth rate of 6.6%
~ 7.9%.
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Theories/Speculation
Several blockbuster drugs are due to expire in the next few years, such as Pfizer's Lipitor in
2011 and AstraZeneca's Nexium in 2014, possibly endangering the revenues of the
pharmaceutical industry for the next three to five years. IMS predicts that the growth rate for
pharmaceutical firms will hover around 3 to 6 percent moving into 2010 to 2012, down from
the average rate of about 7 percent from 2004 to 2007, as a result.
Predictions also suggest that demand for medications might fall in the developed world
(especially the United States, by perhaps 1 percent), further reducing revenues for big pharma,
although some of this decline will be offset from rising purchases in the developing world,
especially Russia, South Korea, Mexico and China.
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The poor infrastructure, fragile economy, unemployment and poverty are in fact holding back
development of economy in developing countries like Nepal. Pharmaceuticals are health
inputs and are not to be treated par with consumables.
Essential Drug Policy of World Health Organization:-
World health organization (WHO) essential drug policy clearly aims at providing a health for
all and accessibility of primary health care and medicine to all the human beings of the world,
irrespective of color, creed and economic status. It is continuously impressing upon
governments of developed and developing countries to make prizes of the drugs such that for
want of money no one get deprived of medicines and suffers morbidity and mortality due to
diseases.
Power of Multi-nationals:-
• Two third of World’s trade is done by Multi National Companies (Approx. $ 6 Trillion).
• The total compensation package of the Top 10 Pharma MNCs is more than twice the R&D
spends of the Indian Pharma Industry; data are not available on Nepalese R&D expenditure.
• The share of MNC Pharma in Indian market,in 1971 was 75 per cent. Now, it's 35 per cent,
Similar condition of Nepalese Market could be seen on present condition and can we repeat
the history of India?
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Strengths:-
• Mature Industry with strong manufacturing base
• Well-formed Legal and Financial frame-work
Weaknesses:-
• Inadequate resource base
• Poor R&D efforts
• Inadequate clinical and regulatory network.
• Low profitability of industry due to high competition
• Development as a Commodity player at global level, rather than brand player
• Lack of International marketing efforts
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Conclusion of 2006:
The study shows the consumption of allopathic drugs in the fiscal year 2061/62 (2004/05) has
been Rs. 10659 millions. The annual increment of allopathic drugs consumption has been
16.1%. Thirty-two percent of allopathic drugs consumption is met by national industries.
Considering the commercial sector only, 64.6% is the share of import and 35.4% is the share
of domestic production of the allopathic medicine.
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Considerations: Few Health Insurance Models have been practicing in Nepal, which
could/may be elaborated in future. Also, Health Insurance Scheme from private sectors is also
being implemented in these days. It will increase the total amount of Drug Consumption on
the population in the future days.
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Source: STRATEGIC PLAN FOR HUMAN RESOURCES FOR HEALTH; 2003 to 2017
MINISTRY OF HEALTH KATHMANDU; April 2003
Considerations: As per the Chart the percentage change for the occupational requirement for
Pharmacists is 1234% on the health care system, which is in the greater side than other
occupation.
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Projections are conditional statements about the future. They refer mostly to the exercises of
extrapolation of the past trends into the future; and they do not take into account changes in
the policy parameters. For example, a projection of the future population growth may not be
taking into account changes in the government health policies, family health programs, etc.
Projections are based on the assumption that the past trends will continue to operate in the
future. The reliability and usefulness of projections depend on the assumptions and their
closeness to reality. In the long run, the policy parameters are to be incorporated in the
projections. The likely effects of policy changes are to be judged and projections are to be
made accordingly. Thus, when an element of judgment is added to the projections, it becomes
a forecast. Forecasts enjoy the advantage of being based upon the assumption or a set of
assumptions which are likely to be realized in the near future and can yield a relatively more
realistic picture of the future. In general, population projections are treated as predictions and
are never to be termed as final population. They should be reviewed frequently in order to
determine the degree to which they agree with recent demographic changes. If the
discrepancies between the projections and the ultimate events are significant, it should be
found out whether it is due to the quality of input data or due to the methodology adopted.
There are various methods of projecting population (mathematical, economic and component
methods). Some are very sophisticated and rigorous while others are simple and less
sophisticated. Normally, population in future is governed by the following equation:
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As per the report of DDA (Quantification of Drug), the Drug Consumption rate has been
increased by 80% in 5 years and if we extra-plot the data up-to 2030, the value will be
increased up-to 203656.90 Million Rupees. The market coverage of Nepalese Industries in
Nepal, at 2030 should reach beyond 90% of total value to make a business of above
mentioned value.
250000
200000
150000
YEAR
100000 DRUG CONSUMPTION*
50000
0
1 2 3 4 5 6 7
Graph -1: X – axis: Years from 2000 to 2030 (1 point = 5 years), Y – axis: Drug
Consumption.
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The growth rate of Pharmaceutical Companies, considering the data of last 37 years is 7.17%,
however, considering data of last 13 years, it is only 5%. As per the considerations of growth
in the consumption level and market occupation in future, the data has to be plotted from both
growth rates, which will provide us the maximum and minimum numbers of Pharmaceutical
Companies going to be opened in the future. As our main aim is calculation of number of
pharmacist required for the industrial section only, the growth rate of Nepalese Pharma
Industries and the minimum / maximum numbers per year will provide us a clear vision for
the future.
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Final Conclusion:
The minimum number of Pharmaceutical Companies in next 20 years will be 125 and
maximum number will be 193. The Pharmacists required to work, in the Quality Control,
Production, R&D, QA, etc areas of inside Pharma Industries of Nepal (@ 15 per factory) will
be in the range of 1881 persons to 2890 persons.
The average number of Pharmaceutical industries in next 20 years will be 159
companies. The numbers of Pharmacists required for next 20 years in the Industrial
sector is 2385 numbers.
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Graph 2: Data Showing Increment in the no. of Pharmacists required for next 20 years.
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References:-
• Changing trends in pharma markets: Impact of WTO policies in developing countries; Arvind
M B, C S Shastry, G K Kadikudi, Kole P L, Nagappa A N
Contact Details:-
Bibek Singh Mahat, M. Pharm. 1st Year, 1st Semester, Batch of 2009; Kathmandu University,
School of Science, Department of Pharmacy, www.ku.edu.np/pharmacy
Email: bsm@student.ku.edu.np
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