When you live amidst 140 crore people, you might often wonder why aren’t we the biggest market in every trade in the world! The worldwide pharmaceutical market is valued at approximately $1.5 trillion (in 2022). But does India lead the market? The answer is obviously a big NO. The US is considered the most extensive pharmaceutical ecosystem, generating at least $500 billion in revenue, more than any other country. There begins the disparity between quantity and quality—volume and value.
However, another aspect of this massive disparity in revenue is the price of the prescription medications sold. During the 2009-2015 period, the US’s pharma industry did a Pole Vault with the prices of select top drugs. Pharmaceutical manufacturers make a solid argument that the list prices need to be raised to not only recoup research costs and improve quality but also to maintain profit margins.
Insurance Coverage Vs. Out-of-Pocket Expenditure
Another facet of this predicament is Insurance Coverage vs. out-of-pocket expenditure as a proportion of current health expenditure. One of the predominant aspects of the pharma industry thriving in the US and Europe is the larger proportion of insurance coverage. While the out-of-pocket expenditure in the US is just 11.31 and 15.50 in the European Union, it is 54.78 in India (according to World Bank data in 2019). But India is on a fast track of development and manifests a steep decline in out-of-pocket expenditure—from almost 70 in 2013. The further decline will be a boon to India’s ambitious vision of growing into a superpower in the global pharmaceutical industry.
It’s a great omen. During the recently concluded ‘India’s Pharma Vision 2047’ interactive session, Dr. Mansukh Mandaviya, the Union Minister for Chemicals & Fertilizers and Health & Family Welfare, shared his strong vision of taking India to the pinnacle of the global pharmaceutical industry. Dr. Mansukh says, “Let us move from ‘Volume’ to ‘Value’ leadership to capture the global pharmaceutical market. It is time to accumulate knowledge from global best practices in research, manufacturing, and innovation and develop our own models focused on accelerating production to meet the domestic demand while increasing our global footprint.”
India is on a fast track of development and manifests a steep decline in out-of-pocket expenditure—from almost 70 in 2013. The further decline will be a boon to India’s ambitious vision of growing into a superpower in the global pharmaceutical industry.
Evolution During the Pandemic
Of course, there is a mountain to climb, but with the right strategy and roadmap, it is never a mission impossible. Remember, India is the largest provider of generic drugs globally. The Indian pharmaceutical sector currently supplies over 50 percent of global demand for various vaccines, 40 percent of generic demand in the US, and 25 percent of all medicine in the UK.
India has shipped more than 2389 lakh doses of Covid-19 vaccines to 100+ countries over the past almost 18 months. Well, it’s an achievement to be proud of, reiterating India’s philosophy of ‘Vasudhaiva Kutumbakam .’Dr. Mansukh adjoins, “We have always believed in supporting the world while also balancing our domestic demands. During the pandemic crisis, when the world looked up to India, we delivered. This has led to the global appreciation of India’s strengths, and we must now use this opportunity to take it to the next level of ‘Discover and Make in India’.”
Currently, the Indian pharmaceutical industry includes a network of more than 3,000 drug companies and 10,500+ manufacturing units. Globally, India ranks third in pharmaceutical production by volume and 14th by value. Improving the latter will be the key to dominating the global pharma industry.
A strategic public-private collaborative approach is of paramount importance to improve the value. The pharma industry will need to take the lead and find India-solutions to India-problems, create their own models and initiatives to expand manufacturing capacity, invest in innovative technologies, and focus on research and development.
On the other hand, the government will have to play a strong supportive role by introducing long-term healthcare and pharmaceutical policies. Delving deeper, the pharma industry faces multifarious challenges, including the lack of policy stability, innovation, and regulatory framework reforms. While building a supportive ecosystem inclusive of these aspects, the government will also be interested in enhancing transparency and accountability in the industry, foolproofing the review process at CDSCO, ensuring regular monitoring of the implementation of schemes, and pricing and associated control. Moreover, building ‘Brand India’ is going to be a priority as well.
Speaking at the Pharma Vision 2047’ interactive session, S Aparna, Secretary, Department of Pharmaceuticals, asserted, “The Government of India continues to work towards realizing our goals for the pharmaceutical sector, from various initiatives aligning with the industry to sustaining focus on access, innovation, quality, and affordability to help achieve India Pharma Vision 2047.” Indeed, Aparna went on to assure the support from the government, including policy changes and ease of expansion. She further added that the government is addressing the issue of policy stability, facilitating reforms & regulatory ease to expand manufacturing and ensure quality assessments. According to her, the Government also strives to encourage investment in pharma R&D, exports & digitalization and pushes the incubation of new startups and entrepreneurship initiatives. Aparna expressed her belief that these factors will help the industry grow and further build confidence in the sector.
A Great Vision
The ambassador of Brand India, PM Narendra Modi, has been exceptional in propelling the cause across the global pharma world. PM Modi’s remarks last year while inaugurating the first Global Summit of the pharmaceutical sector are a strong testament to this. He said, “The global trust earned by the Indian healthcare sector has led to India being called the pharmacy of the world. I invite you all to ideate in India, innovate in India, make in India and make for the world. Discover your true strength and serve the world.”
According to the Indian Economic Survey 2021, the Indian pharmaceutical market is expected to grow three-fold over the next decade. The market, valued at $42 billion in 2021, is anticipated to reach $65 billion by 2024 and further expand to $120-130 billion by 2030. However, the opportunities in the sector are humongous, and so are the challenges.