on sun pharmaceuticals industries ltd

Project Report on

Sun Pharmaceuticals

Industries Ltd.

Mentored By:- Mr. Vinay Jathar

Mr. Dhamala

Mr. Devang Trivedi

Submitted By:- Shruti Chowdhary

Strategic Design Management

National Institute of Design

Acknowledgement The training with Sun Pharmaceuticals Industries Ltd. was a great learning. I religiously put in my best effort and dedication but, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I am highly indebted to Mr. Vinay Jathar, Mr. Dhamala and Mr. Devang Trivedi for their guidance and constant supervision as well as for providing necessary information regarding the project & also for their

support in completing the project. I would also like to express my special gratitude and thanks to Ms. Darshana and Mr. Vinay for giving attention and time Also, the Sun Pharmacueticals Industries Limited for giving me an opportunity to comprehend with the system as a whole and all other important people of the for their kind co-operation and encouragement which helped me in completion of this project. Last but not the least, my thanks and appreciations also goes to my

institute National Institute of Design for making the summer internship, a part of the curriculum which helped me in understanding and learning the working of the industry and exposing me to the real scenario and environment which would help me in near future.

|Shruti Chowdhary|NID| 30th May 2012| Sun Pharmaceuticals Industries Limited | 1

Contents

1. History of Pharmaceuticals 2. Pharmaceutical market 3. Pharmaceutical market in India 4. Regulatory Issues in the Indian Pharmaceutical Industry 5. Sun Pharmaceuticals industries Ltd. 6. Background of SPIL 6. Introduction of SPIL 7. Competitors of SPIL

8. Processing at SPIL 9. Research and Development at SPIL 10. Business Strategy 11. Conclusion


History of Pharmaceuticals

The earliest drugstores date to

the Middle Ages. The first known drugstore was opened by Arabian pharmacists in Baghdad in 754 and many more soon began operating throughout the medieval Islamic world and eventually medieval Europe. By the 19th century, many of the drugstores in Europe and North America had eventually developed into larger

pharmaceutical companies. Most of today's major pharmaceutical companies were founded in the late 19th and early 20th centuries. Key discoveries of the 1920s and 1930s, such as insulin and penicillin, became mass-manufactured and distributed. Switzerland, Germany and Italy

had particularly strong industries, with the UK, US, Belgium and the Netherlands following suit. Legislation was enacted to test and approve drugs and to require appropriate labelling. Prescription and non-prescription drugs became legally distinguished from one another as the pharmaceutical industry

matured. The industry got underway in earnest from the 1950s, due to the development of systematic scientific approaches, understanding of human biology (including DNA) and sophisticated manufacturing techniques.

Numerous new drugs were

developed during the 1950s and mass-produced and marketed through the 1960s. These included the first oral contraceptive, "The Pill", Cortisone, blood-pressure drugs and other heart medications. Valium (diazepam), discovered in 1960, was marketed from 1963 and rapidly became the most prescribed drug in history, prior to controversy over dependency and

habituation. Attempts were made to increase regulation and to limit financial links between companies and prescribing physicians, including by the relatively new U.S. Food and Drug Administration (FDA). Cancer drugs were a feature of the 1970s. From 1978, India took over as the primary centre of

pharmaceutical production without patent protection. By the mid-1980s, small biotechnology firms were struggling for survival, which led to the formation of mutually beneficial partnerships with large pharmaceutical companies and a host of corporate buyouts of the smaller firms.

Pharmaceutical manufacturing became concentrated, with a few large companies holding a dominant position throughout the world and with a few companies producing medicines within each country.


Pharmaceutical market

The global medical industry is one of the world's fastest growing industries, absorbing over 10% of gross domestic product of most developed nations. It constitutes of broad services offered by various hospitals, physicians, nursing homes, diagnostic laboratories, pharmacies and ably supported by drugs, pharmaceuticals, chemicals, medical equipment, manufacturers and suppliers. The United States of America has one of the largest medical and healthcare industries in the world, followed by Switzerland and Germany. The global medical industry is highly fragmented, comprising of various ancillary sectors namely medical equipment and supplies, pharmaceutical, healthcare services, biotechnology, and alternative medicines sectors. The pharmaceutical industry comprises of several establishments involved in developing, researching, marketing and distributing drugs or medicines. Globally, the market share of pharmaceutical industry is US $340 billion. The global pharmaceutical sales account for US$ 602 billion, with an annual growth rate of 7%. In the year 2006, the global pharmaceutical exports totalled US $ 271.9 billion having an annual growth rate of 10%.

The working of the Pharma sector

has been explained pictorially below:

Inputs: The major inputs required for the Pharma sector are basic chemicals, labours and Research and Development (R&D). The sector is a research-driven industry with the focus being on discovering and

launching new and innovative drugs. Companies spend millions of dollars/rupees on research and get the competitive advantage of patents if they are successful in launching drugs. In India, R&D costs as a % of revenues are around 5-8% on an average. This is very low compared to the companies in

developed countries like US, UK etc. where the average R&D spend is close to 17-20% of the revenues. Products/Services: The Pharmaceutical products/services can be broadly divided into 3 segments


Source:http://stockshastra.moneyworks4me.com/pharma-sector-india- stock-overview-and-analysis/

a)Active Pharmaceutical

Ingredients (APIs) – These are substances which are responsible for medicinal activity. For e.g. Paracetamol is an API which is present in drugs like Crocin, Anacin etc. and is responsible for relieving the pain. APIs (also called as bulk drugs) are the raw material for the final drug that we consume. Well known API manufacturers include Orchid

Chemicals, Elder Pharma etc. b)Formulations – While APIs are responsible for the medicinal effect of a drug, we cannot directly consume an API due to different reasons like stability, taste, odour etc. Hence APIs are combined with certain substances called excipients to form the final drugs or

formulations which are suitable for human consumption. Continuing the example given above, Crocin is a formulation. Companies like Sun Pharma, Cipla, Dr. Reddy’s etc. are examples of companies manufacturing formulations. c)Contract Research and Manufacturing Services (CRAMS)

– Just like IT, major Pharma companies outsource their manufacturing work to low-cost centres like India to reduce cost while focusing on drug-discovery and marketing themselves. Further, they also outsource part

of their research activities to some of the Indian pharma companies. Over the last few years CRAMS has emerged as a major focus area for many of the Indian Pharma companies. Examples include companies like Divi’s Labs, Jubilant Life Sciences etc. As mentioned above, companies from developed countries spend a large amount on R&D and are responsible for discovering and launching a number of innovative drugs/formulations. Companies like Pfizer, Merck, Novartis, Roche etc. are some of the biggest ‘innovator companies’ globally. Compared to this, Indian companies have established their presence in the generics(low-cost versions of branded drugs and have the same medicinal effect as the branded or original drug) segment. d) Users: Pharmaceutical products reach the end users through different mechanisms. There have emerged two different types of markets globally: 1.Branded Markets: Countries like India, Brazil, Russia, Mexico, etc. are branded in nature. In India, our doctor prescribes us the medicine for a particular disease. The prescription is usually a brand name of a drug for that disease. We also tend to purchase the exact brand prescribed by the doctor even if the chemist offers a different/generic version available at a low cost. 2. Unbranded Markets: Developed countries like US, UK and some



European countries are known as

unbranded markets. Here, instead of prescribing the brand, the doctors prescribe the molecule or API (with the dosage) for a particular disease. In these countries, a large percentage of the population (95%) has medical insurance. Hence, the insurance companies decide which generic drugs will be covered by the insurance;

understandably these will be the ones which are sold at the lowest costs. When consumers approach the chemist, they are given the drug as per the prescription and their insurer.

As seen in the above table, Dr.

Reddy’s Laboratories Ltd. has clocked the highest Net Sales CAGR of ~31% over the last 6 years. Its Net Profit has also grown strongly with a 5 year CAGR of close to 84%. However, its Net Profit margin is quite low at 7%. In terms of volume, Cipla is the

market leader with a 5.3% market

share in India.

Sun Pharma enjoys the highest

Net Profit margins with a 6 year

average of 36.5%. This is because

of the strong brand it has

created and its strong presence

especially in the CNS therapy

area.

The companies that will benefit

the most are those which have a

robust pipeline of products in the

regulated markets, a favourable

geographic mix (strong presence

in India and US with some

presence in emerging markets)

and potential in niche products.

These companies will be best

positioned for sustainable

growth.

Thus, considering all these

factors, we can say that in the

long term the Indian Pharma

sector is poised for robust growth

and is shifting from a defensive to

a growth sector.


Source:www.infocusrx.com/pharma-marketing/.../indian-pharma-

industry/


The Pharmaceutical sector in India is highly fragmented with more than 10,000 listed and unlisted companies. India is one of the fastest-growing pharmaceutical markets in the world, and its market size has nearly doubled since 2005. The total turnover of the Indian Pharma sector is estimated to be close to US$ 21 bn of which around US$ 9 bn comes from exports while the rest comes from domestic sales. US is the topmost destination for Indian Pharma exports followed by Russia, Germany and Austria. A region-wise segregation of Indian exports has been shown below:- The domestic pharma market is currently US $ 10 bn in size and is expected to reach ~US$ 20 billion by 2015 and establish its presence amongst the world’s leading 10 markets.

Currently, India is the 4th largest market in the world in terms of volume and 12th in terms of value.

Based on the different therapeutic areas, the Pharmaceutical market

can be broadly divided into 2 categories – Acute and Chronic. Acute Segment – It includes diseases that usually last for a short duration and includes therapies like anti-inflammatory, pain-killers or analgesics etc. Chronic segment – It includes diseases that are recurring in nature and include lifestyle diseases. This includes therapies like

anti-diabetics, cardiovascular (CVS), cancer etc. In most cases, ailments in the chronic segment ensure regular consumption of medicines for the lifetime of the patient. Thus, chronic segment is expected to grow much faster than the acute segment going forward. Currently, the Indian

Pharmaceutical Market is more than 60% acute with the rest being chronic. The share of chronic is

Pharmaceutical market in India


Source:www.infocusrx.com/pharma-marketing/.../indian-pharma-

industry/

expected to increase going

forward.

Anti-infectives is the largest contributor (17%) to the domestic sales followed by Cardiovascular and Gastrointestinal. The highest growth has been shown by Anti-diabetics followed by Neurology (CNS) and Cardiovascular. The Pharmaceutical Industry in India is increasingly being recognised as a reliable source of

quality medicines at affordable prices and is emerging as a global powerhouse. Apart from drugs and pharmaceuticals, India also offers tremendous outsourcing opportunities in areas such as clinical trials, R&D, custom synthesis, technical services, etc.

To highlight these opportunities experienced professionals from healthcare and pharmaceutical industry did an extensive research which culminated into an

exhaustive report. Certain obstacles were discovered which were worked for an improvement. The table below highlights them:


Source:www.infocusrx.com/pharma-marketing/.../indian-pharma-industry/

Pharmaceutical market in India

Regulatory Controls in the IPI(Indian Pharmaceutical

Industry)

The principal regulatory bodies

entrusted with the responsibility of

ensuring the approval, production

and marketing of quality drugs in

India are:

The Central Drug Standards and

Control Organization (CDSCO),

prescribes standards and measures

for ensuring the safety, efficacy and

quality of drugs, cosmetics,

diagnostics and devices in the

country; regulates authorization of

new drugs and clinical trials

standards; supervises drug imports

and approves licences. The

National Pharmaceutical Pricing

Authority (NPPA) revises the prices

of decontrolled bulk drugs and

formulations at judicious intervals;

periodically updates the list under

price control; maintains data on

production, exports and imports

and market share of

pharmaceutical firms; enforces and

monitors the availability of

medicines, imparting inputs to

Parliament in issues pertaining to

drug pricing. The Department of

Chemicals and Petrochemicals also

oversees policy, planning,

development and regulatory

activities pertaining to the

chemicals, petrochemicals and

pharmaceutical sector. The Ministry

of Health and Family Welfare

examines pharmaceutical issues of

public health while the Ministry of

Chemicals and Fertilizers is on

industrial policy. The Ministry of

Environment and Forests, Ministry of

Finance, Ministry of commerce, the

Ministry of Science and Technology

also plays an important role.

In India, drug manufacturing, quality and marketing is regulated

in accordance with the Drugs and Cosmetics Act of 1940 and Rules 1945. The Drugs Controller General of India (DCGI), who heads the CDSCO assumes responsibility for the amendments to the Acts and Rules. Other major related Acts include Pharmacy Act of 1948, The Drugs and Magic Remedies Act of 1954 and Drug Prices Control Order (DPCO) 1995. The central

regulatory authority undertakes approval of new drugs, clinical trials, standards setting, control over imported drugs and coordination of state bodies’ activities. State authorities assume responsibility for issuing licenses .

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Background of SPIL Sun Pharma began in 1983 with

just 5 products to treat psychiatry ailments. Sales were initially limited to two states in Eastern India. Sales were rolled out natiowide in 1985. Products for cardiology were introduced in 1987, and Monotrate, one of the first products launched then, countinues to be sold even today. SPIL established their first

research centre, SPARC, in 1993. Sun Pharma was listed on the main stock exchanges in India in 1994 during which the profits were used to build a greenfield site for API manufacture, as well as for acquisitions. SPIL’s first API manufacturing plant was built in Panoli in 1995, for access to high quality actives

ahead of competition, and in order to tap the vast international opportunity for speciality APIs. Another API plant at Ahmednagar was acquired from the multinational Knoll Pharmaceuticals in 1996, which helped SPIL in expanding and substantially upgrading for regulated markets,

In 1997, SPIL headquarter shifted to Mumbai where SPIL had their first international acquisitions with an initial $7.5 million investment in Caraco, Detroit. By 2000 SPIL had completed 8 acquisitions adding new therapy areas.

Also in the same year, a new research center was set up in Mumbai for generic product development for the US market. From a ranking at 38th in 1994, by 2000 we were ranked 5th with a

leadership in 8 of the 11 therapy areas that we are present in. The year 2000 was the year of turnaround at the US subsidiary, Caraco, as it began to receive approvals after successful inspection by the USFDA. In December 2004, a research center spread over 16 acres was inaugurated by the President of

India, with special lab space for drug discovery and innovation. In September 2010 acquisition of Taro Pharmaceuticals doubled the size of US business and brought a range of generics including a strong line of dermatological which added to the company’s production capacity. By the year 2010, SPIL has 23

manufacturing plants in 3 continents, 4 research centers with a total manpower of 9000 employees. Because of such a strong positioning, SPIL is a world renowned brand with a strong US generic market. With over 58% of sales from such a huge market, SPIL has been investing enormous in R&D.


Introduction: SPIL

Sun Pharmaceutical Industry

Limited was established in 1983 by Mr. Dilip Sanghvi (CEO).

It was Mr. Sanghvi’s vision to accomplish the mission of

establishing a world class pharma company to facilitate both domestic and international market. SPIL originally started with with just 5 products in 1983 . Since then, SPIL has crossed several milestones to emerge as a leading pharma company in India and abroad.

Today besides having a large presence in the US and India, it has robust footprint across 40 other markets. In the US, which is the company’s largest market, have built a strong pipeline of generics,

directly and through the

subsidiaries Caraco and Sun

Pharmaceutical Inc. Taro adds

strong dermatology range to this

portfolio.

In India and rest of the world

markets, SPIL brands are

prescribed in chronic therapy

areas like cardiology, psychiatry,

neurology, gastroenterology,

dialectology etc. SPIL is among

the market leaders in speciality

therapy areas in India

Since the mid- nineties, SPIL has

been using a combination of

growth and acquisition to drive

growth.

Important acquisitions includes

those of the US, Detroit-based

Caraco Parma Labs and a plant

at Halol which now holds

UKMHRA and USFDA approvals.

The 2010 acquisition of Taro

Pharmaceuticals doubled the US

business which helped SPIL in

gaining new heights in

dermatology and paediatrics.

Sun Pharmaceutical Industries Inc

is a Michigan Corporation and a

wholly owned subsidiary of Sun

Pharmaceutical Industries Ltd,

India. Sun Pharma

Inc.manufactures and distributes

pharmaceuticals both in the

United States and internationally


Source: orbesindia.com/article/person-of-the-year-10/dilip-shanghvi-a-rocky-road-to-his-target/2046

Research and Development at SPIL

Competitors of SPIL Ranbaxy Dr Reddy's Laboratories Cipla Lupin Labs Pfizer Inc. Aurobindo Pharma

GlaxoSmithKline Pharma (GSK) Cadila Healthcare Aventis Pharma Ipca Laboratories Divi's Laboratories Ltd. Glenmark Pharmaceuticals Ltd. Torrent Pharmaceuticals Ltd. Piramal Healthcare Ltd. Wockhardt Ltd.


Source: www.google.com

The whole procedure at SPIL is broadly divided into 7 main departments namely:- 1. Warehouse 2. Engineering and utility 3. Quality Control / Quality

Assurance 4. Active Pharmaceutical

Ingredient(API) 5. Capsulation of Formulation 6. Package & Dispatch 7. Safety and Environment

1. Warehousing: activities include verifying, receiving, storing, dispensing and dispatching of the material. A whole lot process has to be followed strictly as it is the initial stage of the production. The raw material is ordered as per the requirement and that too from the approved suppliers. The ordered supply includes raw material (solid /solvent) and packaging material( barrel, carton, pallet, cello tape and stickers). The vehicle carrying the raw material is checked at the security and also all the necessary documents are demanded for verification of the driver identity, the ordered amount, the approved supplier name and address. Any mismatch leads to rejection. The approved material is stored at different temperatures depending upon there reactivity, state of matter and nature. Mainly 3 kinds of temperature is maintained:- a) Controlled temperature-

15oC to 30oC b) Cold temperature- 2oC to

8oC

c) Ambient/room temperature

2. Engineering and utility: this department is responsible for maintenance, installation, providing spare parts and utilities (electricity, cool tower, steam, boiler, nitrogen gas, water treatment plant, compressed air) for the various equipment's efficient and effective functioning for maximum output. The plant receives electricity from the Gujarat Electricity Board which is 11kv. It is then converted into two phases that is, 430V (machines, reactors and equipment) and 230V (server, air conditioner, lights). In case of power failure there is a provision of backup power which is supplied through a diesel generator which automatically starts functioning, producing 1000KvAm (430V). Also, UPS (Uninterrupted Power Supply)is there for the QC department for an uninterrupted and impeccable results. There are 3 bore wells which stores water. This water is filtered, permeated(RO, reverse osmosis), demineralised, purified(activated Carbon). The water thus obtained is then used for the formulation process. Since it is a pharmaceutical plant and the end product is ingested by human therefore, assurance for water purity is a major priority. After the water has been used, it is collected for effluent treatment which assure proper cleaning and removal of harmful impurities and wastes up to a safe level, after


Processing at SPIL: Karkhadi unit

which it is finally sent to GPCB (Gujarat pollution control board) from where it is safely disposed. Compressed air is a mixture of oxygen(23%), nitrogen(76%) and

other gases(1%). Nitrogen is absorbed form here for reactor formulation procedure. Cool tower works on 2 principles namely: a)vapour compression system which maintains the water at 25oC to 29oC and b) vapour absorption system which uses a mixture of methanol, water in the ratio of 80:20 and 60:40 which

maintains water temperature at -20oC to -60oC respectively. The nitrogen produced is absorbed and stored for reactor formulation procedure. The steam is produced by a boiler which works on either furnace oil or bagasse. The bagasse boiler uses groundnut and sugarcane peels for producing steam. Pipes with

water are installed either inside of outside the boiler which leads to water boiling and thus producing steam. This steam is used by the dryer for converting the wet formulation into a powdered form.

3. Quality control: the

department is responsible for the

approval of the supply material. Sampling is done in order to meet specifications and in case of any

mismatch, the supply is rejected and marked red. Approved

samples are marked green and are issued a BMR (batch manufacture record). QC plays an important role when it comes to the processing of the active pharmaceutical ingredient. Frequent sampling is done at each and every stage for minimal wastage and maximum output. Though it is time consuming but is necessary for a smooth efficient

processing. Besides Quality control activities sampling material and controlling the quality, Quality Assurance on the other hand maintains documentation, proper regulations, auditing, monitoring and keeping the system in place. Both QA and QC works hand in hand for impeccable results.

Once the sampled material has been approved for the plant manufacturing which is stored in the ware house and the required amount per batch is taken from time to time. Further in process 4 reaction monitoring is carried out for obtaining key raw material(KRM). After the finished product batch is

processed it is analysed via Analytical test Process(ATP). Simultaneously the data is filled and on the basis of ATP review the process is concluded pass or fail.



4. Active Pharmaceutical

Ingredient (API): here, the raw

material is processed for capsulation. For producing API, various equipment and processes

are carried out. These include chemical reactions with the help of utilities in the reactor. The reactor used is either Glass reactor ( is used in case of colour sensitive ingredient) or stainless steel(316) reactor (is used for non reactive ingredients). With the chemical reactions taking place in the reactor the material

undergoes various phenomenon like precipitation, crystallisation which leads to mixing and finally extraction of the Active ingredient. From here it goes to the QC at each and every stage for smooth processing. After this the extracted mixture is passed through stainless steel(304) pipe to the sparkler filter where

charcolization of the batch takes place by which any traces of colour is removed and filtered for the next step. After this the batch is passed for centrifugation. Again it is done either by top discharge centrifugation (manually scooping) or bottom discharge centrifugation(automatic discharge). Centrifugation

includes washing, feeding and separating of the mixture at a.

very high speed. Again it goes for QC. Then milling is done for dissolving the lumps into a even fine mixture thus, making it easier for drying. The fine batch is then transferred to a dryer for moisture

removal. There are 4 kinds of dryer through which drying takes place. They are vacuum tray dryer, fluid bed dryer, rota cold vacuum dryer and rota dryer where drying is done from 12 hours to 36 hours depending upon the ingredient and the dryer type. Once again the batch is sent to the QC for assured content specifications.

Then spray dryer is used for converting material from crystalline to an amorphous state which is finally passed through a fine spinneret(80 to 100 holes/1nch) for obtaining fine uniform material called API. This process is called shifting. Now this fine API is ready for capsulation.

5. Capsulation of formulation: Capsulation is a process of filling the prepared compound i.e. API into an edible capsule. The formulation department works under the guidelines and regultions of USFDA. once the formulation is prepared and tested, it is then capsulated. The place dedicated for capsulation has to be necessarily

safe, aseptic and enclosed so as maintain an impeccable



environment while keeping the foreign particles at the bay. Also special suit, mask and footwear are worn during the process line in order to maintain hygienic

conditions. The API is capsulated with the help of automated machines and each process here is passed onto the other through conveyer belt so as to complete the procedure systematically. Any mismatch or error is precisely detected by the automated machinery at various levels in

order to assure efficient and effective usage of the API to be capsulated.

6. Package and dispatch: once the capsules are sealed they are packaged into bottles which in turn undergoes sterilization, vacuum forming, sealing and label sticking specifying the medicine name,

quantity, ingredients, manufacturing and expiry dates, name of he parent company, manufacturing unit and dosage. The bottles once labelled, they are packed into corrugated cartons which are then packaged together into a bigger packing. After this it is then sealed

while keeping the edges intact to avoid crushing and puffiness. Thus, the sealed packing is

rested on a wooden pallet which is stored in the warehouse in different temperature rooms depending upon the nature of the finished good. The stored bulk is then dispatched as per the requirement and demand of the client both domestic and international. 7. Safety and environment: a separate knot of employees are engaged both individually and collectively with the whole plant. This is one of the most essential department which works for the betterment of the plant. It looks after the wastes and their proper disposal in order to maintain both safety and environment issues. The Affluent Treatment Plant (ATP) works on different waste constituents namely; Chemical oxygen demand (COD), Biological Oxygen demand (BOD), pH balance, Ammonia content, Total Dissolve Solvent (TDS), Total Suspended Solvent (TSS), Minimum Liquor Suspended Solid (MLSS). Both NECL (Nandeshwar Environment Company Limited) and BEIL (Baruch Environment Infrastructure Limited) are responsible for transporting the treated waste for the landfill. They charge at 1000/tonne and 15000/ Tonne for waste solid and spent carbon respectively. In case of more quantity of waste has to be sent for landfill, NECL interrogates, checks, charge enormous and finally dispose.



SPIL plant is encircled with Fire hydrant loop which makes it accessible at any given point of place and time to retard hazards and maximise safety.

Also, fires caused by oil, metal, gas, electric current can be escaped without any delay. The whole process of affluent treatment is shown in the table below:-





Over the past few years, the company has been making substantial investments in R&D activities, including new drug delivery systems. These

investments in innovative R&D carry higher risk and often generate higher returns, but over a longer term when compared to investments in the generic pharma business. R&D at SPIL has tremendous potential for growth and long-term profitability. After having nurtured it for initial years, it has

reached a stage where it requires a focused organisation. Additionally, the demerger provides scope for independent collaboration and expansion, without committing the existing organisation as a whole. With significant acceleration expected in the innovative business over the next few years, the growth in R&D spend may be

much faster than the growth of the generic business. Also have developed the skill set to create a wide range of pharmaceuticals across the value chain from complex APIs to formulations. These projects typically work with a lead time of a few years, and power our growth plans across the world.

There are 600 scientists working across 2 development centers. So far, 233 patent applications

have been submitted and 76 patents have been granted. The company continues to file

ANDAs to create a strong pipeline in the US. ANDAs for 107 products await approval (this includes 7 tentative approvals) as of March 2009. We endeavour to scale up the pace of filings and the speed to market to give us an edge in this highly competitive market. With the progressive years SPIL have developed around 160

speciality APIs. Out of the 133 DMF and CEP applications filed, 81 have been approved. The company has been striving to develop new technologies and products to create a competitive edge and fuel growth. Committed to on-going investment in research and development to differentiate existing products, while bringing

innovative, high-value products. The research and development activities at SPIL are closely focused on market needs and driven by technological progress.

http://www.law.upenn.edu/blogs/regblog/2012/03/member-of-congress-highlights-lack-of-regulation-of-potentially-dangerous-flu-research.html


Business Strategy: SPIL

The SPIL is one of the renowned and trusted brand both in domestic and international market. This helps the company to capture new opportunities

areas while retaining its existing clients. The sales profit is invested in the R&D which helps the company to further progress and expand its channels into new areas of medicine. The joint venture has an option to choose any of the existing products that are there in the Sun Pharma or SPARC Ltd. product

development pipeline. The focus is to bring differentiated and innovative products to market which based on the clinical differentiation, and can be effectively promoted and marketed in all the key geographies. And the company dedicatedly try and find a way by which the company is able to bring and launch new products

to market in the shortest possible time, but unless and until the specific products are selected and there is a clarity in terms of timeline, it is not possible for the company to apprehend such products in the market. It is critical and important for the people of the company to keep in mind is that the relationship is

structured in such a way that it will utilize the capability and skill

of both the companies in a synergistic way.

It is a relationship which has active involvement from the highest management and 100% commitment both of Sun Pharma and SPARC Ltd. to make it work and succeed. SPARC Ltd. and Sun Pharma relationship has a right of first refusal for all the products in emerging market, so Sun Pharma makes an investment in developing and in

bringing the product to the market, along with Merck in terms of clinical development and various other regulatory investments. And Merck will market this product using its existing sales and marketing organization in different countries. The existing Sun Pharma business in all geographies including India will continue to market their own

products as they are doing now. So this is not excluding Sun Pharma, or ability to introduce new products in any market.The critical value driver for this partnership is the innovative delivery technology capability from SPARC Ltd. And finally, the partnership will also derive substantial benefits from Sun Pharma’s rapid product

development capabilities and credible world-class manufacturing infrastructure.


SWOT Analysis

1.Indian with a population of

over a billion is a largely untapped market. In fact the penetration of modern medicine is less than 30% in India. To put things in perspective, per capita expenditure on health care in India is US$ 93 while the same

for countries like Brazil is US$ 453 and Malaysia US$189. 2..The growth of middle class has resulted in fast changing lifestyles in urban and to some extent rural centres. This opens a huge market for lifestyle drugs, which has a very low contribution in the Indian markets.

3.Indian manufacturers are one of the lowest cost producers of drugs in the world. With a scalable labour force, Indian manufactures can produce drugs at 40% to 50% of the cost to the rest of the world. 4.Indian pharmaceutical industry posses excellent chemistry and process

reengineering skills. This adds to the competitive advantage of the Indian companies to develop processes, which are cost effective

1.The Indian pharma companies are marred by the price regulation by NPPA (National Pharma Pricing Authority), decides the various pricing parameters which leads to lower

profitability for the companies. The companies, which are lowest cost producers, are at advantage while those who cannot produce have either to stop production or bear losses. 2. Lack of product patent prevents global pharma companies to introduce new drugs in the country and

discourages innovation and drug discovery. But this has provided an upper hand to the Indian pharma companies. 3.Indian pharma market being the least penetrated in the world. As a result, Indian majors are relying on exports for growth. To put things in to perspective, India accounts for almost 16% of

the world population while the total size of industry is just 1% of the global pharma industry. 4.Indian pharma industry is highly fragmented which makes it increasingly competitive. The industry witnesses price competition, which reduces the growth of the industry in value term.

STRENGTH WEAKNESS


SWOT Analysis

1.The migration into a product patent based regime is likely to transform industry fortunes in the long term. The new patent product regime will bring with it new innovative drugs. Thus,

increasing the profitability of MNC pharma companies and will force domestic pharma companies to focus more on R&D. This migration could result in consolidation as well. 2.Large number of drugs going off-patent offers a big opportunity for the Indian companies to capture this

market. Since generic drugs are commodities by nature, Indian producers have the competitive advantage, as they are the lowest cost producers of drugs in the world. 3.Opening up of health insurance sector and the expected growth in per capita income are key growth drivers

from a long-term perspective. This leads to the expansion of pharma 4.Being the lowest cost producer combined with FDA approved plants, Indian companies can become a global outsourcing hub for pharmaceutical products.

OPPORTUNITY THREAT

1.There are certain concerns over the patent regime regarding its current structure. It might be possible that the new government may change certain provisions of the patent

act formulated by the preceding government. 2.Threats from other low cost countries like China and Israel exist. However, on the quality front, India is better placed relative to China. So, differentiation in the contract manufacturing side may wane. 3.The short-term threat for the

pharma industry is the uncertainty regarding the implementation of VAT. Though this is likely to have a negative impact in the short-term, the implications over the long-term are positive for the industry.


Global Pharmaceutical Market Forecast

The global pharmaceutical market is expected to earn over a trillion dollar in revenues by 2012 and according to "Global Pharmaceutical Market Forecast to 2012” Growing at a CAGR of around 8%,

the global pharmaceutical market is forecasted to reach US$ 1043.4 Billion in 2012. North America remains the largest pharmaceutical market constituting 42.8% of the global sales in 2007. Growth in the region is however expected to slow down in near future owing to patent expiration of key drugs

and increased prevalence of generics. In Europe, growth in the top five markets is expected to remain sluggish in next five years. Emerging markets in Central and Eastern Europe is however expected to drive growth in future.

A large untapped population and strong economic growth in major countries is expected to make Asia-Pacific the most lucrative pharmaceutical market in future. Growth in the Latin American markets is expected to be strong with Brazil and Mexico amongst the most emerging

pharmaceutical markets in the world. Dwindling drug pipelines and patent expiration of a number of blockbuster drugs may challenge the growth of global pharmaceutical market in future.

Source:http://www.etftrends.com/2012/03/five-global-etfs-to-watch/


Conclusion

Given the changing trends in the industry's global value chain and gradual shifts in international trade patterns, if the former pioneers (US, UK, Switzerland, and

Germany) wish to remain competitive, they need to expand the development of new drugs. Otherwise, they will face a continuing of the intensified competition from developing nations that has appeared over the last decade as outsourcing investment in drug discovery and product development has grown.

Also, as major patents expire and generic companies in countries like Israel and India enter these markets, this will be put added pressure from emerging economies on the former pioneer nations. The political determinants that govern the pharmaceutical industry are all regulated by the Food and Drug Administration.

Their laws and guidelines rule all production and manufacturing codes. The government established this organization to protect the health and safety of all customers by ensuring the quality of all drugs produced. As a result the regulations are extremely strict and few drugs are actually passed and reach

the open market. Like the FDA, each nation has its own rules and regulations, and American companies look for other nations to ensure stronger footholds

Entering the field takes an immense

amount of capital, due to the time

needed to research, test and produce

the drugs. Also drugs already been

created are protected under WTO

patents. But, once a successful drug is

marketed, the industry can be very

lucrative. The demand for

pharmaceuticals is relatively stable

even if other markets decrease in an

economic slump, so with constant

research and production of new

drugs, a company can benefit largely.

This therefore would ensure global

competitiveness and success for a

corporation; that is if the drugs also

passed the other nations regulations.

Over the past 50 years, the

pharmaceutical industry has

experienced tremendous growth and

change. Along with this growth has

come a series of pressures to unite the

industry under international standards

and regulations. These international

regulatory guidelines have increased

the barriers to entry in the international

market and have driven top firms to

create voluntary corporate standards.

Also, the idea of "corporate social

responsibility" has recently emerged as

companies attempt to avoid liability

issues and decrease their impact on

the environment. In addition,

environmental certification issues are

a becoming driving force for change

in the pharmaceutical industry. In the

future, if pharmaceutical companies

are able avoid liability issues by

adjusting social and environmental

regulations, they will be very

competitive in the international

marketplace


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overview.php?cc=MTI1NDAxOTEuMDA http://economictimes.indiatimes.com/sun-pharmaceutical-industries-

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http://www.sunpharma.com/Annualtabular.do http://stockshastra.moneyworks4me.com/pharma-sector-india-stock-

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Bibliography


Source:www.google.com

on sun pharmaceuticals industries ltd

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