Analysis of Profitability in Pharmaceutical Industry

The present research work is a very modest effort from the side of researcher to add to the current knowledge base in the area of Pharmaceutical Industry and its financial performance. There are several research conducted by several researchers in and outside country for the Indian Pharmaceutical Industry as the industry is on the threshold of a paradigm shift from process patents to product patents and several such legal international issues. The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are two major things coming out, firstly, Indian Pharmaceutical Industry is growing in output, value, volume, number of units - steadily and showing resemblance to the entire growth story of Indian Economy. Secondly, there is a major change occurring to the very basic system of pharmaceutical business in India. By issuing the patent ordinance, India met a WTO commitment to recognize foreign product patents from 1st January 2005, the culmination of 10 year process. In this new scenario, the Indian Pharmaceutical manufacturers would not be able to manufacture patented drugs which they have been doing since long although by another process. This situation brought a very interesting and exciting research scope into the financial abilities of the industry. As such the crux of any growth or decline depends largely on the financial health it was imperative for the researcher to carry out a detailed profitability analysis of the leading pharma companies of India