Introduction

 

India is the biggest provider of generic drugs worldwide. Indian pharmaceutical sector industry accounts for over 50 per cent of global demand for different vaccines, 40 per cent of generic interest in the US and 25 percent of total medicine in the UK.

India enjoys an influential position in the global pharmaceuticals quarter. The country also produces a large pool of scientists and engineers who possess the potential to steer the industry ahead to a still higher level. Currently over 80 per cent of the antiretroviral drugs applied globally to combat AIDS (Acquired Immune Deficiency Syndrome) are provided by Indian pharmaceutical firms.

 

Market Share

 

The pharmaceutical sector was estimated at US$ 33 billion in 2017. The country’s pharmaceutical industry is foreseen to expand at a CAGR of 22.4 per cent over 2015–20 to touch US$ 55 billion. India’s pharmaceutical exports stood at US$ 17.27 billion in FY18 and have touched US$ 10.80 billion in FY19 (up to October 2018). Pharmaceutical exports add bulk drugs, intermediates, drug formulations, biologicals, Ayush & herbal commodities, and products.

Indian companies received 304 Abbreviated New Drug Application (ANDA) consents from the US Food and Drug Administration (USFDA) in 2017. The country accounts for about 30 percent (by volume) and around 10 percent (value) in the US$ 70-80 billion US generics business.

India's biotechnology manufacturers comprising bio-pharmaceuticals, bio-services,bioinformatics, bio-agriculture and, bio-industry is expected to grow at an average growth rate of about 30 percent a year and touch US$ 100 billion by 2025.

 

Investments and Recent Developments

 

The Union Cabinet has given its permission for the correction of the existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to enable FDI up to 100 per cent under the automatic route for production of medical devices subject to some conditions.

The drugs and pharmaceuticals division attracted combined FDI inflows worth US$ 15.83 billion amid April 2000 and June 2018, according to data published by the Department of Industrial Policy and Promotion (DIPP).

Some of the current developments/investments in the Indian pharmaceutical sector are as follows:

• Amid Jul-Sep 2018, Indian pharma sector witnessed 39 PE investment deals worth US$ 217 million.
• Investment (as % of sales) into research & development by Indian pharma companies* raised from 5.3 per cent in FY12 to 8.5 per cent in FY18.
• In 2017, Indian pharmaceutical sector saw 46 merger & acquisition (M&A) deals worth US$ 1.47 billion
• The exports from Indian pharmaceutical industry to the US ought to get a boost, as branded drugs worth US$ 55 billion will fit off-patent during 2017-2019.

   

  Government Initiatives

   

  Few of the actions taken by the government to improve the pharmaceutical sector in India are as follows:

• In October 2018, the Uttar Pradesh Government ordered that it will set up six pharma places in the state and has received investment commitments of higher than Rs 5,000-6,000 crore (US$ 712-855 million) for the same.
• The National Health Protection Scheme is biggest government funded healthcare programme in the world, which is anticipated to benefit 100 million poor families in the country by contributing a cover of up to Rs 5 lakh (US$ 7,723.2) per family per year for secondary and tertiary care hospitalisation. The programme was published in Union Budget 2018-19.
• In March 2018, the Drug Controller General of India (DCGI) published its ideas to start a single-window facility to give permissions, approvals and other information. The move is intended at giving a thrust to the Make in India initiative.
• The Government of India is planning to set up an electronic platform to monitor online pharmacies under a new policy, in order to stop any misuse due to simple availability.
• The Government of India revealed 'Pharma Vision 2020' aimed at making India a global leader in end-to-end drug production. Endorsement time for new facilities has been decreased to boost investments.
• The government proposed mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the problem of affordability and availability of medicines

 

Future Ahead

 

Medicine spending in India is forecasted to grow 9-12 per cent over the next five years, leading India to become one of the top 10 countries in terms of medical spending.

Going ahead, better increase in domestic sales would also depend on the strength of companies to align their commodity portfolio towards chronic therapeutics for diseases such as cardiovascular, diabetes, depressants and anti-cancers that are on the rise.

The Indian government has taken many steps to decrease costs and bring down healthcare prices. Expeditious introduction of generic drugs into the market has endured in focus and is expected to help the Indian pharmaceutical companies. In addition, the push on rural health programs, lifesaving drugs, and precautionary vaccines also augurs well for the pharmaceutical corporations.