"Some are also likely to turn themselves into contract research organisations (CROs) for international companies. This scenario is likely because of the availability of research skills in the country and the comparatively low cost of hiring research staff here. Thus, tie-ups are likely when the foreign partner of a joint venture outsources a part of the research work to its local counterpart," the report says.

On the structural front, Icra expects a spate of mergers and acquisitions and alliances in the domestic pharmaceutical industry in the coming decade. Alliances, it adds, especially marketing alliances are likely to become the standard routeto success.

"Thus, companies that have an established marketing and distribution network are in a relatively advantageous position vis-a-vis new entrants. But this advantage also makes them attractive for multinational pharmaceutical companies looking for a foothold in India, " Icra's report says.

The agency also believes that in the medium term, the Indian pharma industry is unlikely to be impacted much by exclusive marketing rights and product patent norms. The rate of new product introductions and brand management efficiency are likely to remain the success parameters in the medium term.

However, it is expected that there will be a shift in the nature of products launched in the favour of high-value, high-margin lifestyle related segments like cardiovascular and neurological. In the long-term, an overwhelming majority of Indian companies are expected to move towards off patent, high end segments and the over-the-counter (OTC) market.