India’s G20 presidency has significant implications for the pharmaceutical industry, focussing on improving global health emergency preparedness, fostering industry collaborations, and harnessing digital health potential. It reaffirms India’s dedication to addressing healthcare challenges on a global scale. India’s presidency is crucial in strengthening the nation’s identity as the world’s pharmaceutical hub. During the Covid-19 pandemic, despite naysayers predicting the worst for India, our country leveraged its potential to the maximum to bolster international relations by supplying more than 29 crore vaccine doses and other medicines to over 150 countries. Domestically, it administered over 220 crore vaccine doses.
India’s journey from a significant drug exporter to the world’s largest exporter of generic medicines, which has earned global recognition, has been fuelled by pragmatic government policies and long-term investments since the 1970s. The Indian pharma industry has grown to be the world’s third most extensive by volume and 14th largest by value, capturing 85 per cent market share in India in 2020 from a minuscule 5 per cent in 1969. Indeed, in many ways, our nation has balanced socialism and capitalism by ensuring affordable drugs, increasing access and fostering industry growth through innovation.
The spirit of Vasudhaiva Kutumbakam
The Covid-19 pandemic served as a catalyst, propelling the Indian pharma industry forward on various fronts. But the industry's global presence steadily expanded over recent years, even before the pandemic hit. We have played a pivotal role in meeting the WHO’s demand for critical vaccines like tetanus, DPT and BCG, contributing between 40 to 70 per cent, highlighting its commitment to global health. India also fulfils 90 per cent of the global demand for measles vaccines, demonstrating its dedication to eradicating preventable diseases worldwide. Additionally, through the collaborative efforts of vaccine manufacturers, the government, and healthcare providers, India has achieved a significant milestone in eradicating polio in the country more than 12 years ago.
In 2022 India exported over $25 billion in pharmaceuticals to needy countries. India’s remarkable contributions to vaccine production, disease burden reduction, drug accessibility, and successful disease eradication initiatives stand as a testament to its commitment to global health and well-being. By the turn of the century, India’s pharma industry scripted a stunning fightback against AIDS with an HIV generic drug bypassing patents that saved millions of lives in low and middle-income countries, particularly in Africa. We are also a significant supplier of the first-line anti-TB (anti-tuberculosis) drugs in the world. These successes highlight the power of coordinated action and inspire future endeavours in public health. The industry now has a formidable task to help the government eradicate tuberculosis by 2025 – five years ahead of the global deadline.
More recently, the Covid-19 pandemic spurred the government to take significant steps to boost the pharma industry. Among the three significant steps were the two production-linked incentive (PLI) schemes – one for domestic manufacturing of 53 KSM (key starting material), drug intermediaries, and APIs, and the other for domestic manufacturing of high-value pharma products. The third major step was the Bulk Drugs Park Scheme for three bulk drug parks with common infrastructure facilities for Rs 3000 crore. Ensuring a consistent drug supply is vital for providing affordable healthcare to the population. Any supply chain interruptions can substantially negatively affect drug availability, which, in turn, is closely connected to the country’s overall economic well-being.
This year, the government’s Budget announcement of opening up select ICMR (Indian Council of Medical Research) labs for private and public medical faculties could also boost the pharma industry. India’s pharma industry has established its position as a global hub for drug manufacturing, bolstered by well-established domestic production infrastructure and a pool of highly skilled, cost-effective workforce. The industry is poised to contribute significantly to global drug security. Several factors, including fiscal and non-fiscal incentives, robust infrastructure, and a burgeoning R&D (research and development) ecosystem, align to enable this transformation.
New avenues for growth
Not surprisingly, global pharma majors are actively exploring new avenues for growth within India’s domestic market, capitalising on the immense potential that this burgeoning market represents. India has consistently demonstrated world-class pharmaceutical manufacturing and research capabilities, and its favourable market conditions over the years have established its status as one of the most lucrative pharmaceutical markets globally.
India’s pharma industry has a substantial comparative advantage on the back of several factors on both the demand and supply sides. Factors like massive projected spending of over $200 billion on medical infrastructure in the next decade and the expected addition of over 160,000 hospital beds are on the demand side. Affordability is another factor, with 73 million households expected to shift to the middle class over the next ten years. The industry will also benefit since the patient pool is expected to increase by over 20 per cent in the next ten years, given population growth and lifestyle changes. New diseases and lifestyle changes are also expected to boost demand for drugs and devices. At the same time, rising medical tourism will also benefit the pharmaceutical industry.
On the supply side, several multinational companies are expected to launch patented drugs in India after introducing product patents. On the other hand, patents for many branded molecules with cumulative global sales of over $251 billion began expiring in 2018. They will end in 2024, giving opportunities to Indian pharmaceuticals. India's lower cost of production, which is nearly 33 per cent lower than that of the US, is also a huge advantage for the country’s pharma industry. We also have a massive talent pool for this knowledge-driven industry. As the world's second-largest provider of pharma and biotech professionals, India’s pharma industry is uniquely placed to continue its march.
Being one of the world’s major pharmaceutical producers, India is actively engaged in policy initiatives to improve the manufacturing and delivery of healthcare services. The Indian pharmaceutical sector is pivotal in the nation’s strategic landscape, benefiting from its vast scale and extensive global reach. In this critical moment, fostering collaborative initiatives becomes imperative. The industry eagerly anticipates partnering with government and regulatory bodies to cultivate a robust ecosystem, fostering a growth rate of 11-12 per cent. All these projects have a focused trajectory for India to become the largest producer worldwide by volume.
The author is an Adviser, Public Health Administration, National Health Systems Resource Centre, and a Premier Think Tank of the Ministry of Health & Family Welfare. Views expressed in the story are personal.