SECTOR HIGHLIGHTS: PHARMACEUTICALS
1INTRODUCTION

The Pharmaceutical industry in India is significantly contributing in healthcare, not just countrywide but also globally. The Pharmaceutical exports for the FY 2017-18 was recorded as US$ 17.27 bn.1 The exports during April-December 2018-19 was US$ 13.94 bn, showing a growth of 9.32% over the FY 2017-18.2 India continues to play a substantial role in manufacturing various important, high‐quality and cost-efficient medicines for Indian and global markets. The Pharmaceutical industry in India has unique characteristics with a domination of branded generics, local brands and low-price levels with intense competition.

Sources 1, 2

 

2INDIA’S PRESENCE IN THE GLOBAL MARKET

India plays a major role in manufacturing and supplying medicines globally. India supplies over 50% of worldwide demand for many vaccines, 40% of generic drugs consumed in the US and 25% of all the medicines distributed in the UK. India caters to 60% of global anti‐retroviral (ARV) drugs and 30% of the annual UNICEF requirement. Affordable ARV drugs from India were a major factor in AIDS patients getting greater access to treatment.1 As per FY 2017-18, 8 out of top 20 global Generic companies are from India.

India manufactures 65% of WHO demand for Diphtheria, pertussis and tetanus (DPT) and Bacillus Calmette Guerin (BCG) and 90% of Measles vaccine.2 India is the chief global source of affordable medicines to UNICEF.3 Many Indian companies are co-partnering with foreign voluntary organizations for making drugs available to lesser developed countries like Mozambique, Rwanda, South Africa and Tanzania which have about 33% of all people living with AIDS in Africa.

Sources 1, 2, 3

 

3OVERVIEW OF THE PHARMACEUTICALS INDUSTRY IN INDIA

The Pharmaceutical industry in India stood at US$ 38.2 bn in the FY 2018-19. The compound annual growth rate (CAGR) of 15.4% between 2014 and 2018 was seen in the sector.1 Top Indian pharmaceutical companies have received various international regulatory approvals for their plants, from agencies like USFDA, MHRA-UK, TGA-Australia, MCC-South Africa etc.

Pharmaceuticals exports have been consistently growing for the last few years. In 2019, the Government of India allocated US$ 8.9 bn for the Pharmaceutical industry, which represents a rise of 13.6% as compared to the budget of 2018. The US and the EU together account for over 90% of the regulated market exports and close to 50% of formulation exports for the domestic companies.

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4STRENGTHS AND FACTORS CONTRIBUTING TO THIS GROWTH

Manufacturers’ strengths in Organic Chemical Synthesis and Process Engineering: The Pharmaceuticals industry has shown tremendous progress in terms of infrastructure development, technology base and a wide range of products. The industry has developed GMP Certified (Good Manufacturing Practices) facilities to produce different dosage forms.

Low cost and large-scale manufacturing capability in India: India has the second highest number of United States Food and Drug Administration (USFDA) approved facilities and labour costs in India are lower than other manufacturing hubs by up to 40%.

Stable growth in domestic market consumption: Despite recent headwinds, the Pharmaceutical industry in India has grown rapidly. India is likely to become one of the top 3 Pharmaceutical industries by 2030.1 

Increasing demand in global markets: Generic penetration in high value healthcare markets (e.g., US) is growing significantly, with India supplying over 20% of the demand in major geographies.2

Source 1, 2

As on October 2018

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