The share of multinational pharma companies in the Indian drugs market continues to be on a downward trajectory.
According to consultancy firm Pharmarack, the share of these firms in domestic pharmaceutical formulations market declined marginally to 14.5% in May 2025 from 14.8% in the year-ago month. The report suggests that the share of MNCs has been going down steadily year-on-year after reaching a peak of 22% in 2013.
The main factors that have contributed to this include the expiration of patents on several blockbuster molecules in the recent years, the low focus of MNCs on the branded generics segment, and a significant improvement in the quality standards of domestic pharma firms.
“Due to stiff competition in the branded generics space, the MNCs have shifted their focus to niche therapies areas like oncology, transplant, etc which involve a lot of super-specialisation. Although the patient base and volumes are low in these segments,” said Sheetal Sapale, vice-president (commercial) at Pharmarack.
MNCs are known to bring innovator molecules in the country but once these drugs goes off-patent, other pharma companies produce similar drugs at one-fifth or one-tenth of the original drug price. “MNCs see a significant equity erosion when the branded generics flood the market because these drugs are priced much lower than the patented drugs of MNCs. Over the years, local pharma companies have improved their quality standards — by adhering to US FDA norms — that has brought them at par with foreign companies on the quality aspects,” said Sapale.
At present, there are about 30 pharma MNCs operating in India. Large MNCs have been slowly shifting their focus away from India. For example, Sanofi is operating just consumer business after divesting core products to Indian players like Emcure, Encube Ethicals and Universal NutriScience. Eli Lilly too has given its India marketing rights to Cipla.
Experts said that the legal framework in India is also not always in favour of multinational firms which is one of the biggest reasons for MNCs to lose interest in the Indian market.
A recent case in point is the ongoing legal tussle between Reddy’s Laboratories, OneSource Specialty Pharma and Danish pharma giant Novo Nordisk where the latter has filed a patent infringement suit against Dr Reddy’s and contract drugmaker OneSource for its popular diabetes medication semaglutide.
Also, mechanisms like compulsory licensing, which allows the Indian government to authorise third party to produce and sell patented drugs without the patent holder’s approval (under special circumstances), don’t favour MNCs in India.