To say that the pharmaceutical industry in India is doing well would be an understatement. The last few years have seen what can only be described as a boom in both product scope and overall growth. This has resulted in the country accounting for around 10% of the global pharma industry in terms of volume, which is no mean feat.
With a compound annual growth rate of 13% over the last decade, the pharma industry in India shows no signs of stopping its upward trajectory. In fact, the rate is estimated to increase to 22% and achieve a value of $55 billion by 2020.
A Hive of Activity
In particular, Gujarat is a hotspot for the pharmaceuticals business, holding a 28% share in pharma exports and producing 40% of machinery for the industry. Though the westernmost state’s population of 62.7 million is just 5% of the national total, with only 85,000 of its citizens working in pharma, it creates an impressive 33% of the national turnover. Needless to say, without the pharma industry, India’s economy, social structure and trade relationships would be unrecognisable.
With its manufacturing activity covering everything from oncology products and homeopathic preparations to DNA-based research and fine chemicals, India’s innovative nature is taking no prisoners. In the process, it has created countless investment opportunities, further fuelling its role as a leading global employer in pharmaceutical development.
Global Demand
In January 2017, Donald Trump announced that the US would address the rising cost of drugs by reducing the amount of imports. However, due to the sheer volume of pharmaceuticals imported from India into the country, this move could actually increase drug prices for the foreseeable future. Whilst imports of statins, anticonvulsants and insulin have doubled over five years, imports of proton-pump inhibitors are six times higher than before. Though numerous countries supply these products, three-fifths come from India.
And it’s not just the USA that imports heavily from India, as generic drugs, vaccines, sex hormone drugs, cardiac stents and all manner of other products are exported to the UK, Russia and Australia, as well as across Europe, Africa and the Far East. Put simply, India is keeping the world fit and healthy.
Lower Costs and Greater Availability
Due to cost of production of medicines and other pharma solutions being half that of Europe and just a third of the USA’s, India finds the process of upscaling operations easier than many other countries. This is a result of the great availability of scientists, engineers and skilled workers, combined with a robust base of over 20,000 manufacturing units.
This strength of numbers also applies to the general population. With over 1.2 billion inhabitants, the country is constantly expanding as a centre for conducting clinical trials. This then feeds back into the system, as it makes financial and logistical sense to move some elements of production to an area where clinical trials are the most focused.
Continuous Investment and Acquisition
This kind of development doesn’t just happen randomly. India’s enormous growth in the pharmaceutical industry is due to diversification, a commitment to delivery, savvy business strategies and, most importantly, continued investment and international trade agreements.
The country’s largest producer of drugs is Sun Pharmaceutical Industries, which supplies over 150 countries across five continents with essential pharma products. By entering into a distribution agreement with Mitsubishi Tanabe Pharma Corporation, it opened up a new market to 14 prescription brands in Japan.
Meanwhile, Syngene International is setting up its fourth exclusive Research and Development centre for Amgen Incorporation, a US-based biotechnology company. This will result in major employment opportunities, further advancements in India’s STEM offerings, and ongoing funding.
Other examples include Pink Blue Supply Solutions, a clinical supplies provider, which raised $220,000 in a seed round of funding from TermSheet, and the Medicines Patent Pool signing a licencing agreement with six Indian drug makers for the generic manufacturing of four antiretrovirals.
Then we have the other seriously big developments, such as Glenmark looking to raise $200 million for expansion in India, and Lupin completing the acquisition of US-based GAVIS Pharmaceuticals in a deal worth $880 million.
With numbers like these, it’s no wonder that the country’s pharmaceutical industry is enjoying continued prosperity.
Government Initiatives and Support
The above would not have been possible if it hadn’t been for another major factor in the evolution of the Indian pharma market: government initiatives.
Already allowing 100% foreign direct investment in the pharmaceutical sector, from June 2016 the government announced that foreign investors could also pick up to 74% equity in domestic pharma companies. This easing of foreign investment rules opened the door to further diversification, expansion and groundwork for future plans, which in turn helped to secure the country’s ever-expanding hold on the global pharma market.
Social Effect
With pharma products researched and produced in their homeland, the general health awareness amongst natives is increasing. This is matched by average lifespans being longer than they were a few years ago, as well as a rise in sales, marketing and management jobs.
This is good news for the country, with the flourishing pharma industry having a positive knock-on effect on salaries and lifestyle, subsequently helping to improve wellbeing, mental health and life satisfaction.
Growing collaboration with global companies will continue to create more secure jobs than most other sectors. Enabling an expected 10% increase in pharma careers in India over the following year, this will intensify the long-term reshaping of its society.
Finger on the Pulse
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Sources
http://mediaindia.eu/pharma/gujarat-pharmaceutical-industry/
https://www.nytimes.com/2017/01/12/business/donald-trump-drugs-pharmaceuticals-imports.html
http://www.ibef.org/industry/pharmaceutical-india.aspx
http://indianexpress.com/article/business/economy/fdi-in-pharma-india-fdi-policy-narendra-modi-2865482/
http://timesofindia.indiatimes.com/business/india-business/pharmaceutical-sector-hiring-set-for-double-digit-growth/articleshow/56077469.cms
https://www.linkedin.com/pulse/indian-pharma-industry-swot-analysis-sean-palanna
