India aims to become the pharmaceutical hub of the world

The Covid-19 pandemic may have brought several economies and businesses to their knees, but India’s pharmaceutical industry stood firm during this critical period.

According to sector stakeholders, the government’s focus on supporting the growth of the domestic pharma sector during the pandemic couldn’t have come at a better time.

The government had approved a Rs 15,000 crore production-linked incentive (PLI) scheme for the pharmaceutical sector. The government has also approved 33 applications totaling Rs 5,082.65 crore in committed investment under a separate PLI scheme for Active Pharmaceutical Ingredients (APIs).

At the moment, India is the world’s largest supplier of generic drugs. Indian pharmaceutical companies meet more than half of the world’s demand for vaccines, as well as 40% of generic drug demand in the United States. Notably, according to data from container logistics company Maersk, pharmaceuticals exports from India increased dramatically in 2020, with Q4 alone recording 47% higher volumes than the same period in 2019.

According to a recent Ficci manufacturing survey, pharmaceutical is one of the industries expected to grow rapidly in the coming years.

According to IMS total sales audit data, the Indian pharma market grew 2.6 percent in February, slowing from 6.6 percent growth in January, according to an Emkay Global Financial Services report.

The Indian Pharma Market (IPM) grew 3.4 percent in terms of moving annual total (MAT), primarily due to new product growth of 3.4 percent, as pricing growth of 4.3 percent was fully offset by volume decline.

According to a report by the India Brand Equity Foundation (IBEF), the Indian pharmaceutical sector will reach $100 billion by 2025. The industry has also risen to the challenge, constructing the necessary infrastructure and expanding operations to meet rising domestic and global demands.

Piramal Pharma Solutions, for example, announced plans to invest $32 million in December to expand its facility in Michigan, US, with additional capacity and new capabilities for the development and manufacturing of active pharmaceutical ingredients (APIs). Furthermore, vaccine manufacturer Indian Immunologicals (IIL) will begin construction on a new viral antigen manufacturing plant near Hyderabad in November 2020, with an investment of Rs 75 crore.

Furthermore, the emphasis on becoming self-sufficient in terms of APIs would benefit the Indian pharmaceutical industry, which had previously relied heavily on APIs from China.

Emkay stated in a report, quoting Govind Jaju, founder of Suingora Consultants and an API industry veteran, that global companies, particularly those based in the US and Europe, are actively looking to de-risk their supply chain from China.

They have three options, according to the report: produce APIs in-house, outsource manufacturing to the other US or European companies, or choose a supplier from a developing country other than China.

As per the report, “The first two options, however, are not viable for their entire portfolio, leaving only the third option. Given their long history of supplying APIs and formulations globally, better quality and regulatory compliance, and greater supply reliability, Indian companies have an advantage here “.

With such a strong emphasis on pharma in general and APIs in particular, India appears poised to become the world’s pharma supplier, assuming that policies are put in place to support the industry’s needs.