Introduction and key statistics
From a globalperspective, Indian pharmaceutical industry is the sunshine sector of the country’s economy. It also adds to the happiness index of the world by keeping the disease burden in control.And statistics speak much for themselves.Pharmaceutical exports of India in FY2019-2020 stood at $20.70 billion.This includes 70% generics medicine share and 21% patented drugs share by revenue.India is the largest producer of generic medicines in the world, holding 20% of world’s share and meets 50% of world’s vaccines demand.India also produces 600 Active Pharmaceutical Ingredients (APIs) contributing 57% of APIs to pre-qualified list of the WHO.Indian companies account for 35% of Abbreviated New Drug Application (ANDA) by the FDA. Indian products make up 40 to 70 percent of supply to satisfy the World Health Organization’s (WHO) demand for Diphtheria, Tetanus and Pertussis (DPT) and Bacillus Calmette Guerin (BCG) vaccines and 90 percent of the global demand for the measles vaccine.40% of the generic drugs available in the US are being supplied from India. Africa imports 80 to 90% of its medicines from India, including APIs. Because of its large-scale supply of pharmaceutical products to the third world countries, India is also called the “pharmacy of the developing countries.” These statistics and many more make India the third largest pharmaceutical manufacturer by volume. By value, India’s stands at 10th position in the world. Pharma Vision 2020 envisions to make India the leading country in end-to-end drug manufacturing by the end of the year. It is forecast that the sector exports shall grow to $100 Billion by 2025.
India’s Pharma Infrastructure
India has over 3000 pharma companies with 10,500 manufacturing facilities.The country’s robust pharmaceutical manufacturing infrastructure includes 262 FDA compliant plants. This is the largest number in any country outside of the US. India also has 1400 WHO-GMP approved pharma plants, 253 European Directorate of Quality Medicines (EDQM) approved plants supported by state-of-the-art technologies. India’s Pune-based Serum Institute is world’s largest manufacturer of vaccines by volume. Indian pharmaceutical industry therefore looks set for long- and short-term growth. The present-day strong pharmaceutical industry of industry developedbecause of absence of products patents regime from 1972 to 2005 and restrictions on foreign investments in the sector. According to the government sources, the sector attracted a direct FDI of US$16.50 billion between April 2000 and March 2020.
The “Big Pharma”
However, the biggest drugs manufacturing companies belong either to the US or Europe. This set of companies are called “big pharma.” The top-five companies include Pfizer (US), Roche and Novartis (Switzerland), Merck (US) and GlaxoSmithKline (UK). Yet these companies depend on global supply chains in which India too plays a crucial part.
India’s cost effectiveness
One factor that always works in India’s favor is the cost. Cipla today provides a year’s supply of anti-retroviral medicine to the US at US$100. This is an insignificant fraction of US$10000, the amount at which they were being provided by the US and the European companies. Likewise, Indian companies have played a stellar role in supplying anti-retroviral and anti-malarial drugs to the WHO to fight AIDS, TB and malaria at very cost effective rates. Yet it is a capital-intensive industry because ofthe high level of technology involved and complexities in research and development of new products. Regulatory compliance, long gestation period, and delay returns make it even more challenging business sphere but Indian companies are always at their performing best.
Beating dependence on China
On the flip side, India imports 70% of its API needs from China. India is totally reliant on China for APIs of drugs like drugs like Ibuprofen, paracetamol and amoxicillin. Any disruption designed or unintended in China could have serious repercussion on formulation preparation in India and also disrupt national and global supply chain.Oflate, government has woken up to the realization of over reliance on China. In March,it announced the plan to set up two bulk drugs parks to manufacture 53 priority APIs.
India and Covid Vaccine
Serum Institute is collaborating with the Oxford University for future mass production of Covid 19 vaccine through AstraZeneca. The vaccine is already in the human trial phase. Serum Institute is also working with US-based Codagenix to develop the vaccine. Other Indian companies in the race to develop the vaccine are Bharat Biotech and Zydus Cadila. Successful development of the vaccine would be one part of the fight against the novel Corona virus. Immunization of billions shall require mass production of the vaccine and Serum Institute, and India’s other firms have capacities to meet the world’s demand at economical rates. Therefore, Indian pharma industry can look forward to playing a defining role in fight against Covid 19 as was with AIDS.
Globalization and pharmaceuticals
Globalization is the tendency of business and industry to permeate the national boundaries and spread across the globe. Globalization of Indian pharmaceutical industry got a fillip with sweeping economic reforms in India in 1991. The reforms propelled the market and synergized the Indian economy with the world economy. The liberalization of economy in India coincided with setting up of the World Trade Organization (WTO) and Agreement on Trade-Related Aspects of Intellectual Property (TRIPS). Indian government effected two major changes in its Patents Act to balance requirements of TRIPS and public interest. It ended the “license era” and brought in the competition times, which brought the focus on product excellence and customer service excellence. Indian pharma companies leveraged the reforms and started operations overseas. Indian companies were also quick to adapt their research and development and processes to international standards to compete in the global market. Patenting activity also increased manifold as companies showed interest in new product development.
Steps that can be taken for further entrenchment in the global market.
The organs of Indian government should work in close coordination with regulatory compliance authorities of rich markets to help Indian companies penetrate deep. The government should draw maximum mileage from its presence at Pharmaceutical InspectionConvention (PIC). This shall help improve the imagery of the industry and effect speedy approvals.
India has established its position as a reliable, cost-effective and a quality supplier of pharmaceutical products. A renewed thrust shall make it stand in the leadership position as an “innovative supplier” as well. Now is the time to explore and use the potential in biosimilars, gene therapy and specialty drugs that would further fuel the growth of industry at the international level. India can also now look forward to new markets such as that of Japan. The Japanese pharma market is worth US$80 Billion and the share of Indian companies in it is less than one percent.
Government can give tax breaks on R&D investments, transfer of technologies, targeted regulatory simplifications for sustained growth and new entrants in the market. A liberal eco-system shall reward the industry to build a strong innovation pipeline. This shall ultimately help Indian pharma industry to move up the value chain and establish its presence beyond the generics in biologic and patented formulations.
