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FUTURE PROSPECTS OF INDIAN PHARMA CHEMICALS
Vandita Kakkar, Komal Saini
India holds the distinguished title of being the leading global provider of generic drugs, renowned for its affordable vaccines and generic medications. Over the years, the Indian Pharmaceutical industry has evolved into a thriving sector, currently ranking third in pharmaceutical production by volume. It has achieved a remarkable compound annual growth rate (CAGR) of 9.43% over the past nine years. The industry encompasses various segments, including generic drugs, overthecounter medications, bulk drugs, vaccines, contract research and manufacturing, biosimilars, and biologics. India boasts the largest number of pharmaceutical manufacturing facilities adhering to the standards set by the US Food and Drug Administration (USFDA). Additionally, it is home to 500 active pharmaceutical ingredient (API) producers, accounting for approximately 8% of the global API market. The Indian pharmaceutical sector plays a pivotal role in meeting global demand, supplying over 50% of vaccines worldwide, fulfilling 40% of the generic demand in the US, and providing 25% of all medicines in the UK. Domestically, the industry comprises a vast network of 3,000 drug companies and approximately 10,500 manufacturing units. With a substantial pool of scientists and engineers, India possesses the potential to propel the pharmaceutical industry to even greater heights. Notably, Indian pharmaceutical firms currently supply more than 80% of the globally used antiretroviral drugs for combating AIDS (Acquired Immune Deficiency Syndrome). The country's reputation as the "pharmacy of the world" is welldeserved, owing to its medicines' high quality and affordability.
The Indian pharmaceutical industry has gained global recognition for its generic medicines and affordable vaccines. It has undergone a significant transformation and currently holds the third position in pharmaceutical production worldwide based on volume. In terms of value, it ranks as the 14th largest industry globally. The pharmaceutical sector contributes approximately 1.72% to India's GDP. A recent report by EY FICCI indicates that with the growing demand for innovative therapies, the Indian pharmaceutical market is projected to reach a value of US$130 billion by 2030. Concurrently, the global pharmaceutical market is anticipated to surpass the US$1 trillion mark in 2023.
By 2024, the Indian pharmaceutical industry's market size is expected to reach US$65 billion, further climbing to around US$130 billion by 2030. According to government data, the Indian pharmaceutical industry is presently valued at approximately US$50 billion, with over US$25 billion generated from exports. India caters to about 20% of global exports in generic drugs, making it a key player in the industry. Additionally, India ranks among the top 12 destinations for biotechnology globally and is the thirdlargest destination for biotechnology in the Asia Pacific region. In 2022, the Indian biotechnology industry surpassed US$80.12 billion, marking a growth of 14% from the previous year. The biosimilars market in India is projected to witness a compound annual growth rate (CAGR) of 22%, reaching US$12 billion by 2025. This would represent nearly 20% of the overall pharmaceutical market in India.
The Indian pharmaceutical industry holds a prominent position in the nation's foreign trade and presents attractive opportunities for investors. It plays a vital role in supplying millions of people worldwide with affordable and lowcost generic medications. India boasts a substantial number of manufacturing facilities that adhere to stringent quality standards, including Good Manufacturing Practices (GMP) prescribed by the World Health Organization (WHO) and the United States Food and Drug Administration (USFDA). For years, India has maintained its position as the leading producer of pharmaceuticals among nations.
The pharmaceutical spending in India is expected to witness a growth rate of 912% over the next five years, propelling the country into the top 10 nations in terms of medicine expenditure. Future success in the domestic market will rely on companies aligning their product portfolios with chronic therapies for diseases such as cardiovascular conditions, diabetes, depression, and cancer, which are on the rise. The Indian government has implemented various measures to reduce costs and healthcare expenses. Initiatives like the National Health Protection Scheme, aimed at providing universal healthcare, along with the growing elderly population, increasing prevalence of chronic diseases, and the establishment of pharmacies offering affordable generic medications, are all expected to contribute to the growth of the Indian pharmaceutical industry.
The rapid introduction of generic drugs into the market remains a focal point and is anticipated to benefit Indian pharmaceutical companies. Additionally, the emphasis on rural health programs, lifesaving drugs, and preventive vaccines bodes well for the pharmaceutical sector. Overall, the Indian pharmaceutical industry is poised for continued growth and holds significant potential for both domestic and international stakeholders.
Future predictions
about Indian
Pharmaceutical Market For potential investors, having a viable market for producing and selling goods and achieving expected profits is crucial. However, a report from the New Delhibased think tank Research and Information System for Developing Countries (RIS) suggests that the prospects of competing successfully against Chinese products might be discouraging. Even with the attractive facilities offered at bulk drugs plants, these factors might not be sufficient to entice investments initially. The report also highlights that the incentive structure, which is based on a percentage of sales, is acting as a deterrent. Sudip Chaudhuri, the author of the report and former professor of economics at the Indian Institute of Management Kolkata, explains that if the government schemes enable Indian firms to increase production and sales, imports from China may decrease. However, Indian firms may currently struggle to compete with Chinese companies based on pricing. Despite a somewhat slow start, efforts are being made to accelerate progress, and the potential for positive outcomes remains significant.According to Sudarshan Jain, the Secretary General of the Indian Pharmaceutical Alliance (IPA), the Indian pharmaceutical industry is expected to grow to USD 130 billion by 2030, positioning India as the leading provider of medicines worldwide. Dr. Viranchi Shah, National President of the Indian Drug Manufacturers Association (IDMA), emphasizes that the Production Linked Incentive Schemes (PLIs) and cluster manufacturing initiatives are driving the growth of the pharma sector. He envisions India becoming the top player in the industry within the next 25 years. The Indian Economic Survey 2021 forecasts a threefold growth in the domestic market over the next decade. In 2021, the domestic pharmaceutical market in India reached a value of US$42 billion. It is projected to reach US$65 billion by 2024 and further expand to approximately US$120130 billion by 2030.
Final takeaway
The Indian Pharmaceutical Industry is poised for exponential growth, fueled by favorable conditions and robust government support. As the Indian economy secures its position as the fifth largest in the world, the timing couldn't be more opportune for India to emerge as a leading global producer of highquality pharmaceutical products.
Kakkar is from University Institute of Pharmaceutical Sciences, Chandigarh and Saini is from Chandigarh College of Pharmacy, Chandigarh Group of Colleges, Landran, Mohali
