- The Pharmaceutical industry in India is the 3rd largest in the world in terms of volume and14th largest in terms of value. The Pharma sector currently contributes to around 1.72% of the country’s GDP. 24
- Major Segments of the Pharmaceutical Industry are Generic drugs, OTC Medicines and API/Bulk Drugs, Vaccines, Contract Research & Manufacturing, Biosimilars & Biologics. 24
- India has the second-highest number of US FDA approved plants outside the US. India is the largest provider of generic drugs globally.24
- Indian medicines are preferred worldwide, thereby rightly making the country the “Pharmacy of the World”.24
- India is 3rd largest market for APIs globally, 8% share in the Global API Industry, 500+ different APIs are manufactured in India and it contributes 57% of APIs to prequalified list of the WHO.24
- Pharmaceuticals industry expected to reach USD 65 bn by 2024, and USD 120-130 bn by 2030
- An overall increase of 7.95% in budget allocation for Health Schemes in 2021-22 as compared to allocation in 2020-21.21
- Pharmaceutical is one of the top ten attractive sectors for foreign investment in India.
- The pharmaceutical exports from India reach more than 200 nations around the world, including highly regulated markets of the USA, West Europe, Japan, and Australia. 1
- About 20% of the global exports in generic drugs are met by India. 1
- The Indian pharmaceutical industry is the third-largest in the world by volume and 14th largest in terms of value. It contributes 3.5% of the total drugs and medicines exported globally.
- India supplied around 45 tons and 400 million tablets of hydroxychloroquine to around 114 countries globally.
- Reasons to Invest
- India's healthcare market may see a threefold jump in value terms to reach USD 372 bn by 2022 with rising income, greater health awareness, increased precedence of lifestyle diseases and improved access to insurance. 2
- Ayushman Bharat is National Health Protection Scheme, which will cover over 100 mn poor and vulnerable families (approximately 500 mn beneficiaries) providing coverage up to INR 5 lakh per family per year for secondary and tertiary care hospitalization.3
- Under the ‘Promotion of Bulk Drug Parks’ Scheme, the Union government aims to develop 3 mega Bulk Drug parks in India in partnership with the States. The parks will have common facilities such as a solvent recovery plant, distillation plant, power & steam units, and a common effluent treatment plant. 7
- The presence of a skilled workforce as well as high managerial and technical competence is a source of attraction for private players. Pharma companies have already increased spending in the country to tap rural markets and develop better infrastructure. 1
- Nearly 11.9 lakh Health IDs have been generated and 3106 doctors and 1490 facilities have registered on the platform.
- Recent Announcements
14th July 2021: Government caps trade Margin up to 70% on Price to Distributor (PTD) level on 5 medical devices (i) Pulse Oximeter, (ii) Blood Pressure Monitoring Machine, (iii) Nebulizer, (iv) Digital Thermometer, and (v) Glucometer.
14th July 2021: Cabinet approves Memorandum of Understanding (MoU) between India and Kingdom of Denmark on Cooperation in the field of Health and Medicine
14th July 2021: COVID-19 UPDATE- 38.76 Cr. Vaccine Doses administered so far under Nationwide Vaccination Drive and 3,01,04,720 total recoveries across the country so far with 97.28% of recovery rate.
13th July 2021: COVID-19 Vaccination Update- More than 39.46 Crore vaccine doses provided to States/UTs and more than 1.91 Cr balance and unutilized doses still available with States/UTs and private hospitals to be administered.
12th July 2021: India’s Cumulative Recoveries crosses 3 Cr mark. National Cumulative COVID-19 Vaccination Coverage exceeds 37.73 Cr. 37,154 Daily New Cases reported in last 24 hours
- The annual turnover of the Pharmaceutical industry in India in the year 2018-19 is estimated at INR 2.5 lakh cr. 1
- India recorded a growth of 10.72% in Pharmaceutical exports in 2018-19, which are valued at INR 1.33 lakh cr. 1
- Drugs & pharmaceuticals have recorded positive growth of 48.49% during March 2021 vis-à-vis March 2020.
- The groups of Drugs and pharmaceuticals (9.9%) export showing positive growth in June 2021 over June 2019.
- Growth Drivers
- Ministry of Chemicals and Fertilizers issued guidelines for implementing the provisions of Public Procurement Order (PPO) related to the procurement of goods and services in Medical Devices.16
- On 21st December 2020, MOU was signed between Tata Memorial Centre of India and Vietnam National Cancer Hospital to promote exchanges in the areas of training and scientific research, health care services, collaboration in diagnosis and treatment for cancer patients.17
- The total market size of the Indian Pharma Industry is expected to reach USD 130 bn by 2030.
- FDI Policy
- Up to 100%, FDI has been allowed through automatic route for Greenfield pharmaceuticals projects. For Brownfield pharmaceuticals projects, FDI allowed is up to 74% through automatic route and beyond that through government approval. 5
- The cumulative FDI equity inflow in the Drugs and Pharmaceuticals industry is USD 17,746.39 mn during the period April 2000 to March 2021. This constitutes 3.40% of the total FDI inflow received across sectors.4
- Production Linked Incentive (PLI) Scheme
The sector is supported by the following Production Linked Incentive (PLI) Schemes to boost domestic manufacturing capacity, including high-value products across the global supply chain.
- PLI Scheme for Key Starting Materials (KSMs)/Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) (PLI 1.0), Read More
- Production-Linked Incentive (PLI) Scheme for Pharmaceuticals d (PLI 2.0), Read More
Financial Outlay- INR 21,940 cr
For more details on PLI Schemes, Click Here
- Sector Policy
The National Pharmaceutical Pricing Policy, 2012 (NPPP-2012) notified on 07 December 2012, with the following salient features: 1
- The regulation of prices of drugs on the basis of the essentiality of drugs as specified under the National List of Essential Medicines (NLEM) – 2011.
- The regulation of prices of drugs on the basis of regulating the prices of formulations only.
- The regulation of prices of drugs on the basis of fixing the ceiling price of formulations through Market-Based Pricing.
- The provision of exemptions to drugs manufactured through indigenous R&D from price control for five years.
- A Drug Price Control Order 2013 has been notified in May 2013 to implement the provisions of NPPP-2012.
Umbrella Scheme 1
- The Department of Pharmaceuticals has prepared an Umbrella Scheme namely ‘Scheme for Development of Pharma industry’.
- The said Umbrella Scheme comprises of the following sub-schemes:
- Assistance to Bulk Drug Industry for Common Facilitation Centres
- Assistance to Medical Device Industry for Common Facilitation Centres
- Assistance to Pharmaceutical Industry (CDP-PS)
- Pharmaceutical Promotion and Development Scheme (PPDS)
- Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS)
Pharmaceuticals Promotion Development Scheme (PPDS) 1
- Under the PPDS, the Department of Pharmaceuticals aims to:
- Conduct Training/knowledge improvement programs/activities on issues/subjects relevant to the growth of the pharmaceutical industry.
- Organize Summits, Convention, Exhibitions, Pharmacy week, meetings etc. in India and abroad and produce promotional materials like films, displays etc.
- Conduct research studies, sector reports etc.
- Purchase books, quality standards, pharmacopoeias, magazines, directories, software for developing information data banks, developing e-learning modules etc.
- Give awards to achievers in the pharmaceutical industry.
National Telemedicine Services19
- The National Telemedicine Service "eSanjeevani" is a digital health initiative of the Ministry to implement teleconsultation in all the 1.5 lakh Health and Wellness Centres in a 'Hub and Spoke' model, by December 2022.
- eSanjeevani has crossed another milestone by completing 7 mn consultations. In June it served around 12.5 lakh patients, which is the highest since the services were launched last year in March.
- Financial Support
Budget 2021-22: Transforming the health sector
- Supplementary Nutrition Programme and Poshan Abhiyan to be merged and launched as Mission Poshan 2.0
- Outlay INR 64180 cr over 6 years
- Support for Health and Wellness centres
- Setting up of Integrated Public Health Labs
- Establishing critical care hospital blocks
- Strengthening NCDC
- Expanding integrated health information portal
Scheme for Promotion of Bulk Drug Parks
- Under the scheme, the Government of India has approved a sum of INR 3,000 cr for setting up 3 mega Bulk Drug Parks in the country. Grants-in-Aid will be provided to States with a maximum limit of INR 1000 cr per Bulk Drug Park. 7
Production Linked Incentive (PLI) Scheme
- Under PLI Scheme in High-Efficiency Manufacturing of Medical Devices was proposed by the Department of Pharmaceuticals with a financial outlay of INR 15,000 cr.15
- Under the scheme, the Government of India will provide up to 20% incentives on incremental sales of 41 products stipulated in the scheme guidelines. The total financial support approved by the government under this scheme is INR 6,940 cr. 8
- Key products are:- Biopharmaceuticals, Complex generic drugs, Patented drugs or drugs nearing patent expiry, Cell-based or gene therapy products, Orphan drugs, Special empty capsules
Complex excipients, Active Pharma Ingredients (APIs) /Key Starting Materials (KSMs) and /Drug Intermediaries (Dls), Repurposed Drugs, Auto-immune drugs, Anti-cancer drugs, Antidiabetic drugs, Anti Infective drugs, Cardiovascular drugs, Psychotropic drugs and Anti-Retroviral drugs
In-vitro Diagnostic Devices (IVDs) - Medical Devices, Phytopharmaceuticals, Other drugs not manufactured in India
- Investment Opportunities
- The Indian Drugs & Pharmaceuticals Limited (IDPL), a public limited company, aims to encourage indigenous production of pharmaceuticals and to support various health programmes of the Central Government. It is currently manufacturing 86 products, under Public-Private Partnership, and 25 products, under non-Public Private Partnership mode. 1
- Japanese companies have been invited to invest in Indian Pharmaceutical and Medical Device Industry. Pharmaceutical Traders Association and Japan Federation of Medical Devices Associations have come to the mutual understanding that cooperation between the two countries can contribute to stabilize the global supply-chain especially of APIs and Medical Devices. 9
- A Bulk Drug Pharma Park has been proposed in Solan, Himachal Pradesh to give impetus to the Pharmaceutical industry. An amount of INR 200 cr has been sanctioned for the Bulk Drug Pharma Park and a Satellite extension centre of National Institute of Pharmaceutical Education and Research (NIPER). 10
- The Government of Assam has proposed a Pharmaceutical Park in Chaygaon, Kamrup Rural on a land area of 100 acres. The estimated project cost is INR 153.64 cr. 11
- Foreign Investors
- Teva Pharmaceuticals (Israel)
- Nipro Corporation (Japan)
- Procter & Gamble (USA)
- Pfizer (USA)
- Glaxo Smith Kline (UK)
- Johnson & Johnson (USA)
- Otsuka Pharmaceutical (Japan)
- AstraZeneca (Sweden-UK)
- Key Achievements
- Under the ‘Pradhan Mantri Bhartiya Janaushadhi Pariyojana’ (PMBJP), the sales worth INR 484 cr was recorded at the 7064 Pradhan Mantri Bhartiya Jan Aushadhi Kendras across all districts of the country selling quality generic medicines up to 12th January 2021.20
- 134 new Jan Aushadhi Kendras under Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) opned in April 2021.
- Under the ‘Janaushadhi Suvidha’, over 3.43 cr sanitary napkins have been sold at INR 1 per sanitary napkin since August 2019. 1
- About 11600 educated unemployed youth of the country have got direct sustainable employment under the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP). 1
- The total size of the drugs & medical device industry is around US$43 billion. Currently, the growth rate is 7-8% in the drug sector and 15- 16% in the medical device sector.12
- The total export of drugs and medical devices is US$20 billion of which drugs form around 90% of the total exports.12
- During September 2020, 26 new medicines retail prices were fixed. This brings a cumulative figure to 1417 till September 2020.13
- Under PLI Scheme for API/KSM/DI received total 215 application and PLI Scheme for Medical Devices received 28 application in November 2020.18
- Annual Report 2019-20, Department of Pharmaceuticals, https://pharmaceuticals.gov.in/sites/default/files/Annual%20Report%202019-20_0.pdf
- Year End Review 2019: Ministry of Chemicals & Fertilizers, PIB, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1598394
- Ayushman Bharat - National Health Protection Mission, National Portal of India, https://www.india.gov.in/spotlight/ayushman-bharat-national-health-protection-mission
- Factsheet on FDI - April 2000 to March 2021, Department for Promotion of Industry and Internal Trade, https://dipp.gov.in/sites/default/files/FDI_Factsheet_March%2C21.pdf
- Consolidated FDI Policy, https://invest-india-revamp-static-files.s3.ap-south-1.amazonaws.com/2020-04/FDI%20Policy%202019%20revised_19%20April%202020.pdf
- Union Budget, Government of India, https://www.indiabudget.gov.in/doc/eb/sbe7.pdf
- Guidelines of the Scheme "Promotion of Bulk Drug Parks", Ministry of Chemicals and Fertilizers, https://pharmaceuticals.gov.in/sites/default/files/Guidelines%20of%20the%20Scheme%20Promotion%20of%20Bulk%20Drug%20Parks_1.pdf
- Guidelines for Production Linked Incentive (PLI) Scheme, Ministry of Chemicals and Fertilizers, https://pharmaceuticals.gov.in/sites/default/files/Guidelines%20for%20the%20Production%20Linked%20Incentive%20%28PLI%29%20Scheme%20for%20promotion%20of_0.pdf
- Japanese companies invited to invest in Indian Pharmaceutical and Medical Devices industry, Ministry of Chemicals and Fertilizers, https://pib.gov.in/PressReleseDetailm.aspx?PRID=1626121
- NCAER DIPP District Driven Growth Pilot Study Solan, https://eaindustry.nic.in/ddp/Solan_FINAL_Report.pdf
- Pharmaceutical Park at Chaygaon, Kamrup Rural, https://advantageassam.com/assets/front/pdf/shelf-of-projects/Pharmaceuticals/Pharmaceutical-Park-at-Chaygaon-Kamrup-Rural.pdf
- Annual Report 2019-20, Department of Pharmaceuticals, https://pharmaceuticals.gov.in/sites/default/files/Annual%20Report%202019-20_0.pdf
- Monthly Report, Department of Pharmaceuticals, https://pharmaceuticals.gov.in/sites/default/files/Monthly%20Summary%20.pdf
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1671912
- PIB Release, https://pib.gov.in/PressReleasePage.aspx?PRID=1671912
- Department of Pharmaceuticals, https://pharmaceuticals.gov.in/sites/default/files/ppo%20signed.pdf
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1682468
- Monthly Report, Department of Pharmaceuticals, https://pharmaceuticals.gov.in/sites/default/files/Monthly%20Report%20November%202020.pdf
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1684546
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1688524
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1703447
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1705358
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1725993
- Annual Report 2020-21 https://pharmaceuticals.gov.in/sites/default/files/english%20Annual%20Report%202020-21.pdf