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The domestic pharma market turnover in India has reached Rs. 1.4 lakh crores (equivalent to $ 20.03 billion) in 2019 as per the government data. This is actually an increase from Rs. 1.29 lakh crores in 2018.
In India, the healthcare industries consist of both private sector and public sector. India plays an important role in the global pharma sector, and has a great pool of scientists/engineers with good potential to steer the industry ahead to greater heights.
The Indian pharmaceutical industry supply for over 50 per cent of global demand for various vaccines. India is the 3rd largest producer of drugs in terms of volume and vaccine production accounts to 60 per cent global production. India contributes substantially to WHO demand for BCG, Pertussis, Diphtheria and Tetanus vaccines, which accounts 40 to 70 per cent. India also supports the global demand for vaccine for the treatment of measles and it accounts to 90 per cent.
The generic drugs manufactured in India and supplied worldwide confer safety and quality. India contributes to the second largest share of pharmaceutical and biotech workforce in the world. The average growth rate of India's biotechnology industry comprising biopharmaceuticals, bio-services, bio-agriculture, bio-industry, and bioinformatics is expected to be 30 per cent and to reach US$ 100 billion by 2025.
Indian pharma products are exported to more than 200 countries in the world, with US being the key market. The Indian pharmaceutical exports, including drug formulations, intermediates, bulk drugs, biological, surgicals and Ayush and herbal products has reached US$ 16.28 billion in FY 20. It was estimated that 80 per cent of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms. The medical device industry in India market is expected to grow US$ 25 billion by 2025.
Covid impact, challenges and opportunities
The coronavirus pandemic and its resultant lockdown badly affected all major sectors of the economy, but it has come as a boon in disguise to the Indian pharmaceutical sector. Though some part of pharmaceutical business was affected such as supply chain and import of active pharmaceutical ingredients from China, Covid-19 has provided some opportunities in the pharmaceutical sector, especially India.
In generic market, India is facing high competition from China for the supply of APIs at lower cost. India imports 70 per cent of the API needs from China. This created a lot of hardship to some of the domestic pharmaceutical firms manufacturing certain key APIs. India’s health security was under threat due to heavy dependence on China coupled with shortage in supply of key APIs.
Some of the key APIs were crucial to mitigate the burden of accelerating disease like tuberculosis, diabetics and cardiovascular diseases in India. The current dependence of Indian pharmaceutical companies on Chinese APIs created a serious concern for national health security, prompting the GoI to set up a taskforce for reviewing the internal API sector.
In view of the Covid-19 pandemic situation, the GoI should take important steps for removing the technical and financial barriers, which will spur the pharmaceutical industry to ramp up API production-thereby reducing the dependency of pharmaceutical industry with China.
The GoI has taken important steps by proposing an incentive package of Rs. 13.76 billion for the promotion of domestic manufacturing of critical key starting materials, drug intermediates, APIs and medical devices.
Several key representatives from the pharmaceutical industry and NITI Aayog have suggested that fostering the approvals of pharmaceutical infrastructure developments, clearance from environment ministry and providing tax exemptions and subsidies for the development and promotion of the pharmaceutical industry hubs could benefit the market.
Amidst pandemic situation, urgent action is needed to boost medical supply of sanitizer, face masks, disinfectants, surgical gloves, protective gears for health personnel, scanners, infrared thermometers, test kits, inhalers, ventilators etc. Most of the items require low level of technology and can be manufactured easily.
The MSME sector needs high focus in the above endeavor for twining public health and economic development. The Covid situation could be made as an opportunity for MSME for producing low end technology items in medical and sanitary equipment’s like masks, gloves, cottons etc. and this could even revive the stagnant sectors.
In the last few years, since 2014 the frequency of people visiting India for medical treatment has increased at about 55 per cent. The Government has relaxed the rules for promoting India as a better medical tourist destination by issuing fast-track medical visas, rapid airport clearances for those visiting as medical tourists. The key players in medical tourism are in private sector. The government agencies could do better by opening new avenues in the years ahead.
Investments and recent developments
During the Covid pandemic, several initiatives were taken by the Union Cabinet to boost pharma industry, which include the amendment of existing Foreign Direct Investment policy to allow FDI to invest up to 100 per cent under the automatic route for manufacturing medical device subject to certain conditions.
According to the data by DPIIT, the pharma sector attracted cumulative FDI inflow worth US$ 16.54 billion during April 2000 to 2020 June. Some of the investments made in the pharma sector during the Covid crisis include sterilization devices and germicidal cabinet, portable and rechargeable car sanitizer, alcohol-free and bleach-free sanitizers and wheeled sterilisation unit especially for hospitals by researchers from reputed organization.
Six generic drug makers signed MoUs with Hidalgo (Mexico) to establish a large pharma cluster for the production and logistics in Mexico. The Jubilant Generics Ltd has entered into a non-exclusive licensing agreement with Gilead Sciences Inc for the manufacture and sale of potential Covid drug Remdesivir in 127 countries, including India.
The Telangana Government has proposed to the Union Government to set up Hyderabad Pharma city with a financial aid of Rs. 3418 crore. A record sale of Rs. 52 crore was reported by the PMBJP at an affordable rate to the public.
India unveiled plans to collaborate with Netherlands with an aim to provide digital health facilities. The Government initiated PLI scheme for the pharma sector worth Rs. 15,000 crore.
India has planned to set up Rs. one lakh crore fund for boosting the pharma sector to manufacture pharmaceutical ingredients domestically by 2023. The Government has approved extension/renewal of extant pharmaceutical purchase policy adding one additional product alcoholic hand disinfectant to the existing list of 103 medicines.
The National Health Protection Scheme, a Government funded healthcare programme, which benefit 100 million poor families in the country, provides an insurance cover of up to Rs. 5 lakh per family per year for secondary and tertiary care hospitalization.
The fund allocated to health insurance scheme Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) is Rs. 6400 crore. The Pharma Vision 2020 is an initiative by GoI for making India a global leader in drug manufacture and approval time for new facilities for manufacturing has been reduced to boost the investment. The government has offered Rs. 6,940 crore production linked incentives between 5-20 per cent for incremental sales and plans to set up three mega drug parks to drive sustainable cost competitiveness.
The medicine spending in India is expected to grow between 9-12 per cent over the next five years, leading India to become one of the top 10 countries in terms of medical spending. The better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers, which are on the rise.
The government has taken many initiatives to reduce cost and bring down the healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. The thrust on rural health programmes, lifesaving drugs and preventive vaccines will provide space for development of pharmaceutical companies.
(Author is Professor & Head, Department of Pharmaceutics, KMCT College of Pharmacy, Mampara, Kerala)
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