Out of this corpus, Rs 4000 crore will meet the requirement of additional working capital needs for achieving the level of the anticipated increase in production by a value of Rs 16,552 crore by 2001-02. The investment required for creating facilities for additional production of bulk drugs would amount to Rs 1800 crore and that for formulations would be Rs 1000 crore. The balance would meet the requirements of imports.

In case of investment for additional production of bulk drugs, the study has assumed an overall investment to turnover ratio of 1:2. In case of additional production of formulations, the study, however could not arrive at a fixed investment to turnover ratio which likely to vary between 1:10 and 1:15 depending upon the product-mix, cost of formulation, different dosage forms and variation in capacity utilisation.

The study estimated that if the imported bulk drugs in CIF value is restricted to 12 per cent of the total value of requirement, the growth rate for production and exports of bulk drugs would be 20 per cent each.

The growth rate for the total bulk drug for exports and formulation activity needed domestic consumption and exports can, however be at 16 per cent. The ratio of value of consumption of bulk drug for production of formulation to the value of formulation produced would be 1:4.

The growth in the import of formulations would range between 2 to 3 per cent of the total requirement. With this the growth rate for domestic consumption of formulations would be 15 per cent and that of exports of formulations would be 10 per cent.

The study noted that the growth rates of bulk drugs can vary from zero to 15 per cent due to several factors like emergence of better and more effective drugs like those of analgesics, antheimintics and antibiotic groups, emergence of new drugs like those for cardiovascular, corticosteroids and gastro-intestinal diseases and decline in demand of sulpha drugs due to availability of other existing and new anti-microbial drugs.

Taking into account the past consumption pattern, availability of alternative drugs and advent of new drugs, the study listed 154 bulk drugs spread over 30 therapeutic groups. These drugs are considered significant from the point of view of their requirement in the country.

The study also made a significant observation that the present price control system in drugs may undergo further changes depending upon the emergence of a much wider and more assertive medical insurance system in the country.

It also noted some trends in the international pharmaceutical business like market and its forces, pressure on prices and profits and the rapid technological changes leading to a spate of mega strategic alliances.

These alliances are aimed at meeting the challenges posed by the rapidly changing environment. Controlled expenditure on R&D, a shortening of time required for taking a patented molecule up to the marketing stage, increased importance of generics and off-patent drugs and the increasing power of new forms of pro-active distribution chains are the factors which will play an important role in the industry in the years to come in this patent regime and regulations of WTO.

The study called upon the need for development of adequate infrastructure facilities, upgradation of technology and boosting up of research and development.