Pharma MNC MediPharma Times

Multinational Pharma Giants Continue to Cede Ground in Indian Market

India’s pharmaceutical landscape is witnessing a clear shift as multinational corporations (MNCs) continue to lose market share to domestic players. According to recent data from consultancy firm Pharmarack, the share of MNCs in India’s domestic pharmaceutical formulations market slipped to 14.5% in May 2025, down from 14.8% a year earlier—continuing a decade-long trend of gradual decline from a peak of 22% in 2013.

This erosion of market presence isn’t sudden. Several structural and strategic factors have contributed to the steady retreat of global pharma majors from India’s fast-growing pharmaceutical sector.

The Rise of Homegrown Pharma

One of the primary reasons behind this shift is the patent expiry of blockbuster drugs originally introduced by MNCs. Once these patented molecules lose exclusivity, Indian companies are quick to launch affordable generic versions, often priced at a fraction of the original—sometimes as low as one-fifth or even one-tenth. This price-driven competition has significantly weakened the grip of foreign companies, particularly in the branded generics segment.

Further compounding the challenge for MNCs is the impressive improvement in quality standards among Indian pharma manufacturers. With many local firms now complying with international regulatory norms, including those of the U.S. FDA, domestic companies are gaining greater credibility and acceptance, not only in India but globally.

Strategic Shift Towards Niche Therapies

Faced with stiff competition in the mass-market generics space, MNCs have increasingly redirected their focus to niche therapeutic segments such as oncology, organ transplants, and other super-specialised treatments. These high-value, low-volume segments are less crowded but also have a smaller patient base, limiting overall market share impact.

This shift, while strategic, has reduced their exposure to the larger volume-driven generics market—further contributing to the dip in their domestic presence.

Operational Retreats and Divestments

The operational strategies of MNCs are also evolving. Several large players have scaled down or exited core operations in India. For instance, Sanofi has now limited its presence to the consumer health business, having divested many of its core pharma brands to local firms such as Emcure, Encube Ethicals, and Universal NutriScience. Similarly, Eli Lilly has handed over marketing rights for some of its products in India to Cipla, another sign of international companies leaning on domestic firms to maintain a presence without direct involvement.

At present, around 30 global pharma MNCs continue to operate in India, but their direct role in the prescription drug market is visibly shrinking.

Policy Environment Adds to the Challenge

India’s legal and regulatory environment has also played a role in discouraging long-term investment by global pharma players. Mechanisms like compulsory licensing—which allows the government to permit third-party manufacturing of patented drugs in specific public interest scenarios—are often viewed as unfavourable by MNCs, especially when it comes to safeguarding intellectual property.

Legal disputes such as the ongoing patent infringement case involving Novo Nordisk, Dr. Reddy’s Laboratories, and OneSource Specialty Pharma over the diabetes drug semaglutide underscore the complex and often uncertain IP climate that MNCs must navigate in India.

The Road Ahead

While India remains a high-potential market due to its scale, disease burden, and growing healthcare access, multinational pharma companies appear to be recalibrating their strategies—shifting from direct control to partnerships, licensing deals, and focus on specialised therapies. Meanwhile, domestic pharma firms, with improved capabilities and aggressive pricing strategies, are consolidating their hold across key therapeutic areas.

This trend suggests a long-term realignment of India’s pharma market—one that continues to favour agile, cost-efficient local players, while global companies focus on selected high-margin niches or leverage Indian firms to maintain indirect market presence.