Keeping pace with the consistently increasing contribution of the livestock sector to agricultural GDP, the Indian animal health industry has made impressive strides to meet growing needs of this segment. Often seen as an offshoot of the human pharmaceutical business, India’s animal health industry, estimated at Rs 42,000 million (US $650 million), is all set to play its role to enhance overall animal productivity and ensure safe food for the end consumers.

In the early ‘fifties, the animal health industry made a beginning when multinational pharmaceutical organisations started their specialised animal health divisions. Some Indian companies too realised the need of separate focused veterinary divisions. Post WTO and GATT, the world has witnessed tremendous impact of increased focus on research and consolidation of the animal health businesses through mergers and acquisitions. As a consequence of expiry of patent of blockbuster molecule/drug and also increasing
emphasis on affordable treatment, a huge generic opportunity has emerged in Africa and Asia as well as to a significant extent in Europe and America.

Figure 1. Product wise segmentation of global animal health market in 2014.


Source: Vetnosis Outlook 2014

Figure 2. Species wise segmentation of global animal health market in 2014.


Source: Vetnosis Outlook 2014.

Figure 3. Evolution of the global animal health market, 2004–2014.


*Nominal Dollars: Value without adjusting inflation (billion dollars)
Source: Vetnosis Outlook 2014

Figure 4. Regionwise percentage growth of global animal health market, 2013.


*Real Value: Inflation adjusted
Source: Vetnosis Outlook 2014

 

INDIAN ANIMAL HEALTH INDUSTRY OUTLOOK

The Indian animal health sector continues to contribute to the growth and development of Indian livestock industry by way of providing superior health solutions for prevention and control of diseases as well as increasing farm productivity. The animal health industry has transformed itself in recent years from disease control and treatment activities to a complete healthcare provider and supporting the task of bridging the protein gap of India.

The industry has grown from an annual size of Rs 90 million (US $1.5 million) in 1970 to over Rs 42,000 million (US $650 million) in 2014. The Indian animal health industry is growing at an annual rate of
8 to 10 per cent as against 2 to 3 per cent growth of global animal health industry. The CAGR of 11 per cent between 2008 and 2014 makes India as one of the fastest growing animal health markets globally.

The business is driven by two major segments—dairy and poultry—apart from significant growth potential in aqua, pets and small ruminants market segments in the future. The last decade has seen the entry of many new Indian and multinational companies. These companies market wide range of animal health products such as nutritional and non-nutritional supplements like vitamins, minerals, enzymes, antioxidants, pre & probiotics, etc. This is in addition to therapeutics and different kinds of farm hygiene products such as disinfectants, anti-toxin products, etc, and biological products to prevent various existing and emerging diseases. All of them improve farm productivity and animal health and disease prevention. Although almost 50 per cent of this market is contributed by the top 10 to 15 multinational and Indian companies who have established research, marketing and distribution strengths, the regional players comprising small and medium size generic companies have shown aggressive growth trends and entrepreneurship.

Animal health industry has a vital role to play in realisation of animal food objectives:

  • Prevention and control of emerging and re-emerging diseases of economic importance
  • Improving health and productivity.
  • Ensuring safe, healthy and nutritious animal protein to meet the growing demand of Indian population.
  • Providing newer and cost effective solutions in diagnosis and disease management.
  • Quick dissemination of relevant technical information at the doorstep of all stakeholders.

Animal Health Industry Estimates

Animal health products market in India will grow at a CAGR of 10-11 per cent to reach about 60,000 million by 2018. The dairy segment would outperform poultry and companion animal segments.

 

Figure 5. Indian animal health industry market size and expected growth, 2014-2018.


As per animal health industry estimates, the share of aqua segment is approximately 3% which is included above in “others”

The factors contributing to the growth of animal health market are:

  • The Operation Flood project ensured modernisation of the Indian dairy sector with cooperative networks ensuring small farmers better prices.
  • Increasing consumption of animal protein based products.
  • Increasing integration especially in poultry and large dairy farms.
  • Improved awareness on right management practices.
  • Sourcing hub of herbal medicaments across the world.
  • Veterinary services is improving in its reach to customers and getting more specialised
  • Highly contagious diseases like Foot & Mouth Disease (FMD), Brucellosis and PPR have been major limiting factors of Indian dairy products in export markets. The Government of India has undertaken major initiatives to eradicate these diseases.
  • The National Dairy Plan launched by the National Dairy Development Board (NDDB) with the objective of increasing productivity and creating infrastructure for handling milk is ensuring growth of the Indian dairy sector.

On the other hand, the limiting factors are:

  • Lack of spending in marketing is leading to too many stakeholders between producers and consumers.
  • Low milk productivity per animal.
  • Huge population of unproductive animals put pressure on feed/fodder availability.
  • Lack of government initiatives for promoting value addition in milk through private sector.
  • Less focus on value addition in finished products.
  • Mastitis — still a major challenge.
  • Inadequate cold storage facilities.
  • Lack of adequate quality grading standards.
  • Biosecurity threat.
  • Lack of zoning.
  • Increasing cost of feed, labour, transportation, unpredictable monsoon etc.
  • Limited share of milk processed by the organised dairy sector.
  • Lack of reliable published data.
  • Fragmented industry.
  • Low investments in R & D and less dissemination of knowledge from lab to land.
  • Emerging and re-emerging diseases.

 

INITIATIVES BY INDIAN AH INDUSTRY 

In an effort to provide quality and safe products, the Indian animal health industry has taken several important initiatives. These initiatives also enable the industry to appropriately respond to emerging health and production needs of the dairy industry. Some of the important initiatives are:

  • Anticipate and comply with regulatory situation in India and globally to ensure greater quality and safety of animal health products. This includes initiatives like mentioning the withdrawal period on the packaging, guiding the user for judicious use of antibiotics and promoting the best practices for the use of feed supplement products.
  • Promote international collaboration to bring and share latest technical know how and products suitable for the cattle and buffalo population in India. This initiative is in the field of new diagnostics/products for good management of animal health issues and also various devises to help increase productivity of animals.
  • Promote local research through joint collaboration with other research institutions to generate database of animal diseases so that appropriate measures can be initiated for controlling/managing the related health issues. It also involves generating more data on product efficacy and safety that helps to our farmers/vet to use these products confidently.
  • Promote awareness by sharing vital information linked to issues/challenges in animal health and production. This help to adopt good management practices by farmers and improves compliances.

Registration of new products and regulatory submission guidelines

The apex body of the drugs regulatory system, Central Drug Standards & Control Organization (CDSCO) has taken several initiatives to ensure that the Indian pharmaceutical as well as animal health industry meets the WHO, GMP standards and ensure global regulatory requirements. This process has lead to emergence of many newer guidelines for the industry. The adoption of Drug Master File (DMF) and product dossier concept, data according to specific formats are now mandatory. This will enable our industry to be more competitive and regulatory savvy.

New import regulations

Recently the importers of veterinary biologicals were asked by the authorities to provide molecular characterisation of vaccine strains and its phylogenic relationship with the prevailing disease in India. However not too many studies have been undertaken by our research institutions in canine and poultry segments.

Advisory circulars issued by authorities from time to time

Various circulars, guidelines, and notifications received by animal health industry have compelled us to evaluate its impact on business. Issues like FDCs or Schedule H1, use of antibiotics in animal feeding have given us a resolve to come up to the regulator’s expectations.

Challenges affecting veterinary herbal formulations

The herbs are part of medicine since centuries. With the evolution of medicines, the herbal products have created a niche in the treatment and prevention of disease in human and animals. The age-old herbal industry is not without concerns or hurdles which is preventing its natural growth. However, the herbal formulation manufacturers face issues like:

  • No specific guidelines for categorisation of herbal products whether into therapeutics or feed supplements. Also for licensing of herbal extracts and herbal feed supplements, there are no specific guidelines for approval, allowed usage of only BIS/IP excipients.
  • Raw material availability.
  • Creation of a specific herbal pharmacopeia with detailed technical monographs.
  • Ascertaining microbial limits of herbal products.
  • Introduction of herbal medicines in veterinary curriculum.

Animal health industry specific requirements

Animal health’s requirements are very different from those of human health care. This is because animal health deals with food producing animals apart from pets and companion animals. Also, the animal physiology differs from that of human physiology in terms of its requirement for growth, maintenance and productivity. However, since there are no separate regulations for veterinary drugs in India, veterinary drugs and regulatory processes are benchmarked with human pharmaceutical products.

Attracting manpower

Manpower is the essential component of any industry and our animal health Industry is no exception. With the passage of time, the business processes might have changed, however our industry faces huge shortage of manpower required to serve the above segments. We have seen the preference of new generation towards more glamorous industries whereas our industry essentially remains at the grass root level connected to rural and semi-urban areas. Attracting and retaining the quality talent pool is and will always be a challenge.

With the growing contribution of animal health segment in India’s GDP, there has been an emergence of several private dairy and poultry enterprises in addition to existing network of cooperatives. This is beside the huge demand for canine specialists in the expanding urban market and increasing contribution from aqua sector to India’s food basket.

The curriculum of veterinary science education programmes needs a fresh review since they have to be revised and made relevant to the current and future requirements of the animal health industry. The institutions should take responsibility of building a talent pipeline specifically for poultry/dairy/canine/equine sectors. The industry needs to focus on quality talent pool and align compensation to keep the sector attractive enough. The animal health industry should also focus on upgrading the skill sets of their human resource to enhance their productivity.

 

COLLABORATIVE INITIATIVES: POOLING RESOURCES

One of the major limitations of the animal health industry is R&D. The relatively smaller size of the industry and lesser price attractiveness has resulted in this situation. However, with the growing regulatory requirements and to tap global markets, there is a need to relook at this scenario. The future thrust areas can be as follows:

  • Sero-typing of disease causing agents for accurate diagnosis and subsequently bringing out the effective prevention and remedial measures.
  • Assignment of contract research projects related to new challenges being faced by poultry and dairy industry.
  • Collaborative research and development for bringing novel and improved animal healthcare products.
  • Ensuring food security through safe and nutritious animal protein to all.

The formation of National Institute of Animal Biotechnology (NIAB), an autonomous research institution of the Department of Biotechnology, Ministry of Science & Technology, Government of India, to harness novel and emerging biotechnologies and take up research in the cutting edge areas for improving animal health and productivity under Public-Private-Partnership (PPP) model is a step in the right direction. Such models have been proved as ideal way of making R&D with country specific priorities. The model makes optimum usage of best possible talent pool and public as well as private sector infrastructures to meet mutual objectives in most effective manner.

 

EXPECTED TRENDS

  • The existing growth rate of the livestock sector is expected to continue in future (Table 1).
  • Biological segment will contribute to the industry growth with the maximum growth rate of around 12 to 14 per cent. Industry believes that this growth will be due to the shift from “disease treatment” to “prevention and nutrition” to enhance the productivity.

Table 1: Growth rate of animal health industry segments.

Segment

Growth rate

(percentage)

 Remarks
Dairy 11 to 13 Transformation into an efficient industry
Broiler 8 Consolidation, rural marketing and exports
Layer 10 Expansion in to big farms, export focus on egg and egg-based products
Animal Health 10 to 12 Industry strongly believes that there will not be de-growth in near future
Canine (Pets) 17 to 18 Fast growing segment due to urbanisation and nuclear families

 

  • Innovative novel technological products will be introduced especially in the nutrition and biological sector for better productivity and to prevent the existing and emerging diseases.
  • Export potential envisaged in African Markets (around `20,000 to 25,000 million) and Middle-East and North Africa (MENA) markets.
  • Since Indian animal health care industry predicts substantial growth in near future, international players are expected to step in.
  • Industry is cautious on cost and hence cost leadership is essential to garner higher market share.
  • In dairy, nutritional products will grow and fibre digesting supplement products will emerge as one of the growth contributors of this segment.
  • Industry is expecting the upcoming of corporate dairies with around 500 to 1000 animals.
  • Modern dairy farms with full automation and mechanisation will happen and big dairies and adopted mechanisation programmes will be noticed for small dairy farmers.
  • The future growth in dairy segment drastically depends on the government intervention like restrictions on loose milk sales, vaccine regulations, etc.
  • We can anticipate growth in segments of small ruminants like goat and sheep. Deep litter goat farms are emerging and will grow into a big industry.
  • Globally middle class population and their per capita income are increasing and hence the demand for animal protein based products will grow.
  • Intense competition is expected in the feed supplements category due to low entry barrier and local players and fly by night operators who do not care for quality.

The focus of Indian pharmaceutical regulatory bodies is now shifting towards risk management and science based GMP regulations together with ensuring the affordability of quality medicines. The need of the hour is to make our animal health industry compliant with regulatory requirements and to convert industry research to a safe and innovation driven product.

Changes and challenges are difficult and tough initially but facing them with determination yields a long lasting success. The animal health industry in India is all set to play its role in protecting the animal wealth of India, play an active role in food security by providing quality protein for the growing population as well as ensure food safety to the public in particular and environment in general. 

“Healthy Animals, Healthier India and the World!”