19, July 2024
The Indian pharmaceutical industry is set for remarkable growth, expected to reach $65 billion by 2024 and $130 billion by 2030, up from its current $50 billion valuation, according to Invest India. As a leading exporter, India serves over 200 countries, supplying more than 50% of Africa’s generic drugs, about 40% of the United States’ generic drug demand, and 25% of the UK’s medicines. India also accounts for around 60% of global vaccine demand and provides 70% of the World Health Organization’s essential immunization vaccines, including DPT, BCG, and Measles. This expansion highlights India’s crucial role in the global healthcare sector, highlighting its robust export capabilities and significant contributions to vaccine supply.
India’s pharmaceutical industry sees exports accounting for over $25 billion, supplying 20% of global generic medicines demand. This growth positions India with about 13% of the global pharmaceutical market share. Also, according to the Indian Brand Equity Foundation (IBEF), the nation is the third-largest producer of active pharmaceutical ingredients (APIs), holding 8% of the global market share and manufacturing over 500 APIs.
According to the Department of Pharmaceuticals, Indian pharmaceutical firms are key players in the United States and European Union (EU) prescription drug sectors, with the highest number of FDA-approved manufacturing plants outside the US. As the world’s largest supplier of generic medicines, the nation meets 20% of global demand by volume. Globally valued at $42 billion, India’s pharmaceutical industry saw nearly 5% year-on-year growth in FY23, reaching $49.78 billion. This growth, driven by an 8% increase in exports and a 6% rise in domestic market growth from FY18 to FY23, underscores India’s role as a major pharmaceutical hub.
The sector further ranks among India’s top ten industries attracting foreign investment, with exports reaching highly regulated markets like the US, Western Europe, Japan, and Australia. During the global health crisis, India demonstrated its capability by supplying around 45 tons and 400 million hydroxychloroquine tablets to 114 countries.
India’s pharmaceutical industry is driven by population growth, urbanization, and an increasing prevalence of chronic diseases. Rising healthcare expenditures, supported by both public and private sectors, further boost the industry growth. In this regard, government initiatives like ‘Ayushman Bharat Yojana’ significantly enhance medication accessibility.
Additionally, schemes like the Production Linked Incentive (PLI) scheme promote domestic manufacturing to reduce import dependency, while the Development of Pharmaceutical Industry (DPI) scheme enhances efficiency and competitiveness through sub-schemes for Bulk Drugs and Medical Devices. These efforts aim to elevate India’s global pharma presence and provide affordable, quality healthcare solutions. Increased investments in research and development (R&D) for new drugs further reinforce India’s significant role in global pharmaceutical innovation.
Major companies, such as Sun Pharma and Mankind, are expanding their market reach by deploying 12,000 medical representatives in urban and rural areas to engage with healthcare professionals.
The pharmaceutical industry in India operates under stringent regulatory oversight to ensure drug safety, efficacy, and quality. The Central Drugs Standard Control Organization (CDSCO) , under the Ministry of Health & Family Welfare, controls the manufacture, import, distribution, and drug sales through the Drugs & Cosmetics Act 1940. The Drugs and Magic Remedies (Objectionable Advertisement) Act 1954 regulates drug advertising, prohibiting claims of miraculous properties.
Further, Good Clinical Practice (GCP) guidelines, developed in collaboration with the Drugs Controller General of India (DCGI) and the Indian Council for Medical Research (ICMR) , set standards for human subject research aligning with international norms like the Declaration of Helsinki and World Health Organization (WHO) guidelines. Its regulatory framework also aligns with international guidelines, including the International Conference on Harmonization (ICH) standards and regulations from bodies like the US FDA and the European Medicines Agency (EMA) , ensuring compliance with global standards.
In recent years, the Indian pharmaceutical sector has been at the forefront of technological innovation, harnessing artificial intelligence (AI), big data analytics, telemedicine, and the Internet of Medical Things (IoMT) to revolutionize healthcare delivery. PharmEasy, launched in 2015, stands as a prime example that has democratized healthcare access by seamlessly connecting patients with nearby pharmacies and diagnostic centers. Similarly, Cipla is digitizing its pharmaceutical sales approach by equipping medical representatives with iPads for e-detailing. This digital transformation enhances sales effectiveness via streamlined communication and interactive engagement with healthcare providers. This wave of innovation is supported by initiatives like the Scheme for Promotion of Research and Innovation in the Pharma MedTech Sector (PRIP) , launched in 2023.
The Indian pharmaceutical sector attracts significant foreign direct investment (FDI) due to liberalized policies, allowing up to 100% FDI for Greenfield projects and up to 74% for Brownfield ventures. Since April 2000, the sector has drawn around $22.52 billion in FDI equity inflows, supported by over 10,000 Pradhan Mantri Bhartiya Janaushadhi Kendras nationwide. Major global players such as AstraZeneca, Dr. Reddy’s, and Pfizer have heavily invested in India’s pharmaceutical industry, leveraging its manufacturing and regulatory strengths.
Hence, this sector is set for significant growth in the next decade, driven by its role in global trade and compliance with GMP standards from WHO and USFDA. As a leading producer of generics, India expects around 912% increase in medicine spending over the next five years, placing it among the top global markets. Growth will focus on chronic therapies like cardiovascular and anti-cancer treatments. Besides, pharma companies will adopt FMCG-like strategies, manage diverse channels, and leverage the influence of pharmacists and patient empowerment. Government initiatives and expanding access to low-cost generics will further support this growth.
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