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Anil Jain, Managing Director, Gangwal Group.
By 2025, the Indian pharmaceutical industry is expected to develop into a $100 billion market. In FY20, India exported bulk medications, intermediates, and other pharmaceutical products totaling US$ 16.3 billion. In terms of the nutraceutical sector, demand for nutraceutical products in the domestic market increased by 15% in 2021, while exports increased by 12%. In 2022, a similar pattern is anticipated to persist.
India holds a unique spot in the landscape of global pharmaceuticals. The industry has expanded steadily to become the third-largest manufacturer in the world by volume, holding a dominant position in the supply of generic medications and affordable vaccinations.
The domestic market is currently estimated to be worth $42 billion, and by 2030, it is anticipated to increase by double digits to reach $130 billion.
While the government has implemented a number of innovative measures to boost the domestic manufacturing environment, including the Production Linked Incentive (PLI) programs, programs for promoting bulk medicine parks, and programs for promoting medical device parks, among others, more emphasis should be placed on investments in capacity growth for sensitive APIs, complex excipients, drug intermediates, biopharmaceuticals, and vaccine and medical device manufacture.
There are some significant issues that need to be thought about and addressed which will benefit the industry and open up new opportunities.
Need for effective research and development (R&D)
To move up the value chain, the industry must prioritize innovation. Every year, the Indian pharmaceutical industry requires a robust innovation pipeline that includes new product launches and molecular entities. To that end, the industry is now entering the complex generics and specialized drugs markets. A major benefit to the pharmaceutical industry is the availability of a vast talent pool of scientists and engineers. In the world’s pharmaceutical industry, India plays a significant role.
In many cases, the Indian pharmaceutical industry has faced issues such as declining exports and rising prices, and maintaining competitiveness and market share. This sector is dependent on firms’ ability to obtain patents, which necessitates significant investment in R&D and knowledge building.
Improvised Manufacturing Facilities
China is currently the world’s largest manufacturer. India has a large workforce, with a large number of graduates. Production factories in India are less expensive than those in the developed world and can be associated with trained labor. As a result, there is an opportunity to establish medical equipment manufacturing facilities.
Digital Transformation
Improved transparency, cost-effectiveness, production, and drug development Artificial intelligence (AI), augmented reality (AR/VR), machine learning (ML), and additive manufacturing are assisting pharma companies in improving the R&D process, conducting clinical tests in less time, adding innovation to products, and improving compliance and efficiencies in manufacturing.
Grants & Policies
Instead of focusing solely on generic drugs, more emphasis should be placed on patents for innovative drugs. There is a need for policymakers to work on the industry’s sustainability and development, while businesses must redesign their orientation toward enhancing innovation capabilities.
India currently contributes nearly 57% of Active Pharmaceutical Ingredients (APIs) and 69% of Finished Pharmaceutical Products (FPP) to the WHO’s Pre-Qualified list. All of this has been made possible by the government’s various initiatives to boost the domestic pharmaceutical industry. Industry experts claim that it paved the door for process patents and restricted end-product patenting, which allowed manufacturers to create substitute procedures for exclusive goods that were already on the market and eventually aided the industry’s growth.
Tax reduction on nutraceuticals from 18% to 5% is a must to grow supplements, nutraceuticals, and FSSAI-approved products in India. Nutraceuticals are not a luxury but a necessity. For eg. proteins are taxed at 18% and India is a highly protein deficient country.
Hence, the government has to work on this, and in the coming budget or interim budget, they should reduce the tax to 5%.
Further there should be PLI schemes specifically for nutraceuticals. Once again to reiterate nutraceuticals have to be treated as a necessity and as a birth right of every Indian just like textiles and basic food is treated. If proteins are exempted from tax including packed proteins, a huge number of Indians will benefit.
At all stages of research, technology, and industry, the PLI scheme and a strong PPP model can provide both financial and non-financial support. The government may support the development and give the nutraceutical sector more influence with minimal regulation.
Collaboration & Opportunities
Due to a large production capacity that complies with industry standards and a sizable local workforce, Indian medical exports meet the requirements and regulations of highly regulated markets including the United States, the United Kingdom, the European Union, and Canada.
Pharma manufacturing is changing as a result of other changes and increasingly sophisticated technology, and businesses are responding by shifting more production to contract manufacturing organizations (CMOs) who can serve as reliable strategic partners.
These collaborations not only assist pharmaceutical businesses in gaining access to new technologies and increasing manufacturing capacity, but they can also help manage risk and provide a pathway into emerging markets.
This year in July, Government launched certain schemes for Micro, Small, and Medium Enterprises (MSMEs) in the pharmaceutical sector. Upgrading the pharma sector, testing labs, and ETPs.
With the joint efforts of stakeholders and favourable policy developments, India is well-positioned to position itself as a global supplier of safe and high-quality drugs.
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Views expressed above are the author’s own.
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