The Indian pharma industry has been growing at a compounded annual growth rate (CAGR) of more than 15% over the last five years and has significant growth opportunities. However, for the industry to sustain this robust growth rate till 2020, companies will have to rethink their business strategy.
India’s pharmaceutical industry has grown by Rapidly or in fast progress in the last three decades. As a result, it has emerged as world’s 3rd largest producer of drugs in terms of volume & 6th largest pharmaceutical market globally by its size. The industry has posted double-digit growth over the last few years, rising to US $36.7 Billion (Rs 3670 crores) in 2017 and projected to grow to US $55 Billion (Rs 5500 crores) by 2020, from US $20 billion (Rs 2000 crores) in 2015.
India is the largest provider of generic drugs globally. Indian pharmaceutical sector industry supplies over 50 per cent of global demand for various vaccines, 40 per cent of generic demand in the US and 25 per cent of all medicine in UK.
Indian companies received 304 Abbreviated New Drug Application (ANDA) approvals from the US Food and Drug Administration (USFDA) in 2017 as compared to 201 ANDA approvals in 2016. The country accounts for around 30 per cent (by volume) and about 10 per cent (value) in the US$ 70-80 billion US generics market.
India’s biotechnology industry comprising bio-pharmaceuticals, bio-services, bio-agriculture, bio-industry and bioinformatics is expected grow at an average growth rate of around 30 per cent a year and reach US$ 100 billion by 2025.
Investments and Recent Developments:
The Union Cabinet has given its nod for the amendment of the existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100 per cent under the automatic route for manufacturing of medical devices subject to certain conditions.
The drugs and pharmaceuticals sector attracted cumulative FDI inflows worth US$ 15.83 billion between April 2000 and June 2018, according to data released by the Department of Industrial Policy and Promotion (DIPP).
Some of the recent developments/investments in the Indian pharmaceutical sector are as follows:
- In August 2018, the market grew by 8.7 per cent year-on-year with sales of R s 11,342 crore (US$ 1.69 billion).
- During April-June 2018, pharmaceutical sector in India witnessed private equity and venture capital investments of US$ 396 million.
- In 2017, Indian pharmaceutical sector witnessed 46 merger & acquisition (M&A) deals worth US$ 1.47 billion.
- The exports of Indian pharmaceutical industry to the US will get a boost, as branded drugs worth US$ 55 billion will become off-patent during 2017-2019.
Indian Government take responsibility in Pharma :
Some of the initiatives taken by the government to promote the pharmaceutical sector in India are as follows:
- The National Health Protection Scheme is largest government funded healthcare programme in the world, which is expected to benefit 100 million poor families in the country by providing a cover of up to Rs 5 lakh (US$ 7,723.2) per family per year for secondary and tertiary care hospitalization. The programme was announced in Union Budget 2018-19.
- In March 2018, the Drug Controller General of India (DCGI) announced its plans to start a single-window facility to provide consents, approvals and other information. The move is aimed at giving a push to the Make in India initiative.
- The Government of India is planning to set up an electronic platform to regulate online pharmacies under a new policy, in order to stop any misuse due to easy availability.
- The Government of India unveiled ‘Pharma Vision 2020’ aimed at making India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments.
- The government introduced mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines.
Challenges for Indian Pharma Industry :
- Keeping in mind the sheer number of SRA (Stringent Regulatory Authority) approved facilities in India the pharma industry is bound to become the centre of attention by many regulatory authorities. Currently, there is a fierce increase in the number of companies receiving a notice or warning letters or Import alert by USFDA & MHRA .
- The Local Regulatory body i.e. Central Drugs Standard Organization (CDSCO) and State Foods & Drugs Administration (FDA) needs to get Accredited by WHO and India should join PICs, this will automatically raise the bar of local regulators. We cannot expect our companies and facilities to be world class while our regulators are way behind.
- Proactive quality approach – while many pharma companies in India are already working in this direction, the challenge is to get the industry thinking on these lines, as well. International requirements of ADR, Pharmacovigilance etc. should be made mandatory for domestic markets, too. At present, 70 to 80 per cent pharma companies maintain this infrastructure for international markets. Making it mandatory for domestic market as well will increase the quality perception of Indian market in International arena.
- Today, one of the biggest concerns of International clients, regulators and agencies is quality of Indian medicines. Internationally, India’s generic medicine industry has been questioned for compromising on product quality.
- Until product quality control is not introduced in the domestic market, India’s international image will not improve. The country’s medicine industry has to put its house in order and the government should monitor it stringently.
- with the Indian pharma industry’s personnel turnover at 33 per cent, every three years, there is a completely new staff in a company. The attrition rate in the pharma industry is extremely high. Pharma is one of the world’s most paperwork-intensive industries. It is also one of the world’s most scrutinised industries. So how does a company maintain quality in the absence of skilled staff? In my experience of having worked in the industry for 12 years, I have noticed a general lack of responsibility amongst people. They don’t want to take responsibility for their actions.
- To train a single person on good manufacturing practices for pharmaceutical products – GMP principles takes one year and training costs. This trained person can only start contributing positively by the 2nd year and by this point he is already looking for another job in the market. If we intent to pay attention to quality, this is impossible until the brain drain in the industry is not addressed.
- As we know, the key purpose of the Drug Price Control in India is to ensure adequate access to essential medicines for the common man. To achieve this objective meaningfully, the process that the price regulator should follow must always ensure that all such medicines are: Adequately available and reasonable affordable sot therefore, maintaining a right balance between ‘affordability’ and ‘availability’ of medicines, while framing any drug policy, is of critical importance.
- Today, in the given situation, the future of the industry depends on how we react and address today’s challenges. In order to strengthen the ties of the pharma industry, we need a national policy on pharmaceuticals and government’s intervention is the areas needed.
- If remedial measures are not taken, sooner than later, to overcome these major challenges both by the pharmaceutical industry and the government working in tandem, it will be difficult for the industry to take a large increase in the foreseeable future, as is being envisaged by many.