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Indian pharma is currently navigating a challenging landscape shaped by US pricing reforms and Europe's increasing reliance on HTA (Health Technology Assessment) frameworks. India remains a global powerhouse in generics and vaccines but is grappling with headwinds like 8–10% YoY US price erosion, increased US FDA scrutiny, and margin compression due to input cost inflation, said Akash Kedia, managing director, Alvarez & Marsal.
Even as Indian pharma stands at $50 billion and the global industry is $1.6 trillion, the landscape is being reshaped by patent expiries, and the growing influence of biosimilars and digital health, he added.
While the Most Favoured Nation (MFN) prescription pricing rule under President Trump did not sustain, its spirit lives on through the Inflation Reduction Act (IRA), which empowers Medicare to negotiate drug prices. Now this will erode margins for Indian exporters, who derive 30% of their revenues from the US. The BIOSECURE Act seeks to reduce US reliance on Chinese supply chains, especially in APIs and CDMO. This presents a structural opportunity for India to step up, but only if we aggressively build backward integration and enhance GMP compliance. The production linked incentive (PLI) scheme is a step in the right direction, but execution remains the key challenge, Kedia told Pharmabiz.
In India, the shift is from volume to value: chronic and specialty therapies are outpacing acute, while CDMO exports are growing 12–14% CAGR. There is growing attention on OTC, wellness, and nutraceuticals, as well as digital enablement across supply chain and doctor engagement. Globally, GLP-1s like Ozempic and Mounjaro are redefining the diabetes and obesity markets. Biologics, biosimilars, cell and gene therapy are scaling. We are closely working with our clients to understand the emerging scene and make the right moves for the future, he said.
MSMEs with the revised Schedule M guidelines will bring it closer to WHO and US FDA norms. However, around 60–70% of MSMEs remain non-compliant and are exiting, consolidating, or aligning with larger players as third-party manufacturers. DPCO price caps, especially for NLEMs, continue to suppress margins. Companies are reshaping portfolios to de-emphasize low-margin SKUs and focus on non-NLEM products or niche therapies. We are seeing early signs of consolidation, where smaller units are either being acquired or repurposed as captive units by mid-sized and specialty players, Kedia said.
M&As are surging. Globally over $250 billion pharma deals by Big Pharma acquiring biotech and specialty assets are Pfizer–Seagen, BMS–Karuna, Vertex-Alpine Immune Sciences. Indian M&As are driven into high-growth therapy areas like oncology, women’s health, and critical care along with building global capabilities in CDMO and specialty generics. Domestically, large deals included Mankind’s buying Bharat Serums and Sun Pharma’s merger with Taro. Zydus, Cipla, and Aurobindo pursued strategic acquisitions in the US, Germany, and South Africa to enhance market access and front-end presence. Investors are eyeing tech-led plays, as seen in Laurus’ acquisition of Thynk Health. The outlook remains bullish, with consolidation and global expansion. Here Alvarez & Marsal is helping companies by deploying strong capabilities across the deal cycle, Kedia said.
VC/PE interest is propelled by AI-led innovation and scalable B2B SaaS models targeting commercialization, diagnostics, and drug discovery. Notable investments include Qure.ai, Healthplix, PharmEasy, and Bugworks. Investors favour platforms with global applicability, strong tech IP, and enterprise-focused models with better unit economics, he noted.
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