India has the third largest pharma market in the world by volume, according to research by GlobalData, placing it behind giants such as the US and China. The leading data and analytics company notes that India’s potent manufacturing capabilities, high export activity and large generics market have supported the country in grabbing ‘bronze place’.
According to GlobalData’s latest report, ‘Impact of India on the Pharmaceutical Industry’, key opportunities for continued growth in the Indian pharmaceutical market include bolstering the domestic production of active pharmaceutical ingredients (APIs) and increasing investment in the research and development (R&D) of innovative therapeutics.
Chris Pilis, Immunology Analyst at GlobalData, comments: “India’s manufacturing capacity and generics market are significant assets. The country is the world’s top vaccine manufacturer and is among the largest producers and exporters of APIs and generics globally. Notably, most of India’s marketed pharmaceuticals are generics, comprising approximately 97%.”
In order to best enhance this crucial pharmaceutical revenue stream, the Indian Government has recently introduced a production-linked incentive (PLI) scheme alongside further incentives for establishing bulk drug parks – aiming to promote domestic manufacturing of APIs.
Pilis continues: “Even though India is a large API manufacturer, it still relies heavily on China for the importation of APIs and key intermediate materials. Disruption in API imports during the pandemic exposed existing vulnerabilities in India’s supply chain and led the government to seek greater autonomy. Therefore, the Indian Government has funded numerous domestic manufacturers through the PLI scheme. In conjunction, bulk drug parks, which are infrastructure facilities for API manufacturing, aim to bring down manufacturing costs of life-saving drugs and further enhance domestic API manufacturing.”
While India is a powerhouse in the manufacture and export of generics and APIs, there is room for growth in terms of R&D. Key barriers to R&D innovation include a weak patent environment, volatile pricing policies that hinder long-term investment decisions, and a lack of a venture capital sector in the Indian pharma market.
Pilis notes: “With only a small increase in the development of novel pipeline drugs over the last decade, innovation in India lacks the momentum seen in rival countries such as China – whose pipeline is currently almost 15 times larger than that of India. Additionally, scandals regarding drug safety, maintaining manufacturing standards and counterfeit products have made agencies such as the FDA designate India as ‘high risk’ regarding the safety and quality of manufactured pharmaceuticals.
“India is a strong and promising pharma market with much potential for further growth. It is already a key player in manufacturing and exporting pharmaceuticals and has an unparalleled generics market. The country is on track to better protect its current capabilities by increasing autonomy in API production through the introduction of the PLI scheme and bulk drug parks. Nevertheless, India still lacks strong investment in the R&D of innovative drugs and implementation of better-defined regulations to become more competitive in sectors like biologics.”