The Upsurge of Indian Pharmaceutical Market

Pharma News

India enjoys an important position in the pharmaceutical sector at the global level, thanks to the untiring and rigorous efforts of the pool of scientists and engineers who have been on pins and needles to take the country to higher levels.

Owing to their efforts, the Indian pharmaceuticals market has become the third largest in terms of volume and thirteenth largest in terms of value, as per a report by Equity Master. Indian generics account for 20% of global exports in terms of volume making India the largest provider of generic drugs globally. According to statistics, Indian pharmaceutical firms supply over 80% of the antiretroviral drugs used globally to fight AIDS (Acquired Immuno Deficiency Syndrome).

Growth Rate

The Indian pharma industry is expected to grow over 15% per annum between 2015 and 2020 in contrary to the global pharma industry, which is set to grow at an annual rate of 5 percent in the same period. At the Inauguration of 34th annual convention of American Association of Physicians of Indian-Origin (AAPI) in New York, India’s ambassador to the US Arun Singh said the Indian pharmaceuticals market is growing rapidly, from USD 6 billion in 2005 to USD 55 billion by 2020.

According to data from the Ministry of Commerce and Industry, India has also maintained its lead over China in pharmaceutical exports with a year-on-year growth of 11.44 per cent to US$ 12.91 billion in FY 2015-16.

It is no less than an achievement that the overall drug approvals to Indian companies have nearly doubled to 201 in FY 2015-16 from 109 in FY 2014-15 by the US Food and Drug Administration (USFDA. Currently, India accounts for around 30% (by volume) and about 10 per cent (value) in the US$ 70-80 billion US generics market.

The country’s biotechnology industry comprising bio-pharmaceuticals, bio-services, bio-agriculture, bio-industry and bioinformatics is also growing at an average growth rate of around 30% a year and reach US$ 100 billion by 2025.

Investments

What comes as good news is that the Union Cabinet has given its nod for the amendment of the existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector to allow FDI up to 100% under the automatic route for manufacturing of medical devices subject to certain conditions. The results were phenomenal as the pharmaceuticals sector could attract cumulative FDI inflows worth US$ 13.85 billion between April 2000 and March 2016, according to data released by the Department of Industrial Policy and Promotion (DIPP).

Government Initiatives

With the ‘Pharma Vision 2020’ by the government, India is bound to become a global manufacturing drug dealer. There are several mechanisms introduced by the government such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines.

There have been announcements for setting up of chemical hubs across the country, early environment clearances in existing clusters, adequate infrastructure, and the establishment of a Central Institute of Chemical Engineering and Technology by Mr. Ananth Kumar, Union Minister of Chemicals and Petrochemicals.

Some of the major initiatives taken by the government to promote the pharmaceutical sector in India are as follows: [Source – IBEF]

• The Government of India plans to set up around eight mini drug-testing laboratories across major ports and airports in the country, which is expected to improve the drug regulatory system and infrastructure facilities by monitoring the standards of imported and exported drugs and reduce the overall time spent on quality assessment.

• India is expected to rank among the top five global pharmaceutical innovation hubs by 2020, based on Government of India’s decision to allow 50% public funding in the pharmaceuticals sector through its Public Private Partnership (PPP) model.

• Indian Pharmaceutical Association (IPA), the professional association of pharmaceutical companies in India, plans to prepare data integrity guidelines which will help to measure and benchmark the quality of Indian companies with global peers.

• The Government of India plans to incentivise bulk drug manufacturers, including both state-run and private companies, to encourage ‘Make in India’ programme and reduce dependence on imports of Active Pharmaceutical Ingredients (API), nearly 85 per cent of which come from China.

• The Department of Pharmaceuticals has set up an inter-ministerial co-ordination committee, which would periodically review, coordinate and facilitate the resolution of the issues and constraints faced by the Indian pharmaceutical companies.

• The Department of Pharmaceuticals has planned to launch a venture capital fund of Rs. 1,000 crore (US$ 149.11 million) to support start-ups in the research and development in the pharmaceutical and biotech industry.

Future of Indian Pharma Industry

With rapid urbanisation and raising awareness about healthcare, the Indian pharmaceutical market size is expected to grow to US$ 100 billion by 2025. With the increase in FDI’s and initiatives by the Government and revised policies, the pharma sector seems to be very promising and bound to bloom. That time is not far when the chronic illnesses such as cardio vascular diseases and deadly diseases like cancer would be completely eradicated and would be just names. [Source – India Brand Equity Foundation]

But, the future of the pharmaceutical sector seems not so bright with the ever increase in counterfeit medicines. The country that has tremendous potential to revolutionise the pharmaceutical industry faces tough competition from the parallel counterfeit industry.