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Pharmaceutical

D2C Admin

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Indian pharmaceutical industry supplies over 50% of global demand for various vaccines
India is the second-largest contributor of global biotech and pharmaceutical workforce
Between 2008-19, the S&P BSE Healthcare Index has grown at 16.72%
India’s domestic pharmaceutical market turnover reached INR 1.4 lakh crore in 2019, growing 9.8% y-o-y from INR 129,015 crore in 2018
Indian pharma export reached US$ 20.70 billion in FY20
India’s pharmaceutical export stood at US$ 20.70 billion in FY20
As per Economic Survey 2019-20, Government expenditure (as a percentage of GDP) increased to 1.6% in FY20 from 1.2% in FY15 for health

Competitive Advantage for India

Low cost of production and R&D boosts the efficiency of Indian pharma companies, leading to competitive exports
India’s cost of production is approximately 33 percent lower than that of the US

Government Policies:

Pharma Vision 2020’ aimed at making India a global leader in end-to-end drug manufacturing
Under Budget 2020-21, allocation to the Ministry of Health and Family Welfare is INR 65,012 crore
100% FDI is allowed under automatic route
Mega bulk drug parks are to be developed in order to reduce the industry’s dependency on raw material imports
BIRAC has been established to promote research & innovation capabilities in India’s biotech industry

Investments

India plans to set up a nearly INR 1 lakh crore fund to provide a boost to companies to manufacture pharmaceutical ingredients domestically
Indian Drugs & Pharmaceuticals sector has received cumulative FDI worth US$ 16.39 billion between April 2000 and December 2019

Market overview

Structure of Pharmaceuticals sector: Active Pharmaceutical Ingredients (API) & Formulations
Over the next 5 years, medicine spending in India is projected to grow 9-12%, leading India to become one of the top 10 countries in terms of medicine spending
The Ayurveda sector in India reached US$ 4.4 billion by 2018 end and grow at 16% CAGR till 2025
In May 2020, the Indian pharmaceutical sales grew 9% y-o-y to INR 10,342 crore
Based on moving annual turnover, Anti-Infectives (13.6%), Cardiac (12.4%), Gastro-Intestinal (11.5%) had the biggest market share in the Indian pharma market in 2018

Strategies updated

India’s pharmaceutical export market is thriving due to a strong presence in the generics space
Players in the sector are trying to strengthen their position in the market and expand themselves by investing heavily in R&D activities
Players are trying to achieve cost leadership by vertical integration

Growth drivers

Cost advantage, skilled manpower, increasing penetration of chemists
India’s generic drugs account for 20% of global exports in terms of volume, making it the largest provider of generic medicines globally
Accessibility of drugs to greatly improve, increasing penetration of health insurance, Growing number of stress-related diseases due to change in lifestyle & better diagnostic facilities
Reduction in approval time for new facilities plans to set up new pharmaceutical education and research institutes, exemptions to drugs manufactured through indigenous R&D from price control under NPPP-2012

New Opportunities

Due to a genetically diverse population and availability of skilled doctors, India has the potential to attract huge investments to its clinical trial market
As of February 2019, India was engaged in 3,618 trials in last one year
With 70% of India’s population residing in rural areas, pharma companies have immense opportunities to tap this market
Growing demand could open up the market for the production of high-end drugs in India

Key Industry Organizations