Trends and Opportunities in the Indian Pharmaceutical Industry
The Indian pharmaceutical industry is globally renowned and respected and is one of the most successful industries. Having contributed to India’s healthcare and economy in a great manner, the world‐class capabilities and favourable market conditions over the last many years have ensured that India is one of the most lucrative pharma markets in the world.
Being the largest provider of generic drugs across the world, the Indian pharmaceutical sector industry supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK.
The large pool of dedicated scientists and engineers in the country have been able to steer the industry ahead to an even higher level. Presently over 80% of the anti-retro-viral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical companies.
What We Can Look Forward To
The year 2019 has been quite remarkable for the pharmaceutical industry. Let’s check out some of the emerging and fast-picking trends that can potentially transform the sector in the coming years.
Artificial Intelligence & Cloud Management:
From drug development to patient care, Artificial Intelligence (AI) is slowly taking over different realms of the pharma industry and turning things around for the better. With cloud computing, companies can come up with data-driven strategies and do away with a lot of unnecessary expenses.
Prescription Digital Therapeutics (DTx):
Prescription Digital Therapeutics involve treatment methods with the aid of digital technologies – for example, apps and devices monitoring the patients. DTx, which is fast catching up in the Indian cities, can also help you cut down on costs!
The commonly approved definition of Biosimilars is “a biologic medical product highly similar to another already approved biological medicine (the ‘reference medicine’).” It has already made its mark in the US market. With some drugs in the biologics category going off-patent, the scope for biosimilars will only widen in the future.
Known for its high-quality generic drug manufacture, India exports half of its total production of pharmaceuticals to over 200 countries in the world.
In 2017-18, India exported pharma products worth US$ 17.27 billion and the industry estimates the exports to grow by 30% to reach US$ 20 billion by 2020.
The US is the most lucrative generics market for India’s pharma industry. It is valued at around $60 billion and accounts for about 25% of India’s total shipment. In 2017-18, India exported about US$ 3.21 billion worth of generic drugs to the US, despite the tough regulatory environment in the country. With branded drugs going off-patent during 2017-19, research agencies estimate the export of generic drugs to the US to rise by about US$ 55 billion.
India’s other export destinations include the United Kingdom (US$ 383.3 million), South Africa (US$ 367.35 million), Russia (US$ 283.33 million) and Nigeria (US$ 255.89 million).
Here are some of the initiatives taken by the government to promote the pharmaceutical sector in India:
- In October 2018, the Uttar Pradesh Government received investment commitments of over Rs 5,000-6,000 crore (US$ 712-855 million) and announced that it will set up six pharma parks in the state.
- The National Health Protection Scheme was announced in the Union Budget 2018-19 – the largest government-funded healthcare programme in the world, which is expected to benefit 100 million poor families in the country by providing a cover of up to Rs 5 lakhs (US$ 7,723.2) per family per year for secondary and tertiary care hospitalisation.
- In March 2018, the Drug Controller General of India (DCGI) announced its plans to start a single-window facility to provide consents, approvals and other information. The move is aimed at giving a push to the Make in India initiative.
- The Government of India is planning to set up an electronic platform to regulate online pharmacies under a new policy to curb any misuse due to easy availability.
- The Government of India unveiled ‘Pharma Vision 2020’ aimed at making India a global leader in end-to-end drug manufacture.
- The Drug Price Control Order and the National Pharmaceutical Pricing Authority was introduced to deal with the issue of affordability and availability of medicines.
The US$ 33 billion pharmaceutical industry in India presents considerable potential for a collaborative and outsourced R&D in drug development, biotechnology, chemicals, and manufacturing of medicinal products. Low production and R&D costs, in addition to innovative scientific manpower and a large number of national laboratories that have the potential to steer the industry ahead to a higher level.
India is the only country in the world that has the highest number of USFDA-approved plants for generic drug manufacturing outside the US. Some of the leading Indian pharma companies derive about 50% of their turnover from exporting generic medicines to developed countries like the US and Europe.
The growth of the Indian pharmaceutical industry is likely to remain at 11-13% in FY 2020, riding on the healthy domestic demand and moderation in pricing pressure for the US market. We can expect new launches and market share gains for existing products and consolidation benefits will drive further growth.