India’s pharma industry covered itself with glory during the Covid-19 pandemic by ensuring uninterrupted supply of medicines and vaccines not only for the country but also for almost 150 other countries. Over the past few decades, the pharma industry has built up phenomenal production capacity, and massive economies of scale allow it to produce a high volume of quality drugs at a comparatively lower cost. That is what makes India a leading exporter of generic medicines and vaccines.

Some of the major drivers of India’s pharma industry are branded drugs, off-patent formulations, over-the-counter (OTC) medications, the convergence of healthcare and technology, innovations in medical treatment, and a rise in chronic diseases. India’s pharma industry has a 10 per cent share of world production and 2.4 per cent in terms of value globally. I held the responsibility for chemicals and fertilizers as the Minister in the Atal Bihari Vajpayee Cabinet.

Having come this far, what is the next step for India? If we talk of key pillars for the next level of growth, then a few focus areas are critical. These are increased accessibility and affordability, potential breakthroughs in next generation innovative products, strong growth in the US market by driving higher ANDA (Abbreviated New Drug Application) share in molecules going off patent, ease in price erosion, and increased growth in large under-penetrated markets.

The government is committed to supporting pharma companies and understands the importance of long-term policies which provide stability to the industry.

The industry’s growth till the end of the current decade will be fuelled by novel biologics, new molecular entities, vaccines, and more integrated API (Active Pharmaceutical Ingredient) and KSM (Key Starting Material) production. Having grown consistently both in terms of production as well as innovation, India is poised to become a global biopharma leader.

Indian biopharma companies must ramp up new product and technology capabilities for the next phase of expansion. The pandemic has taught the industry that de-risking supply chains and manufacturing operations while expanding capacity in sensitive APIs and intermediates is critical.

Innovation leadership

While India has already established itself as a global powerhouse of generic drugs to treat a wide range of diseases, the industry needs to now move up the value chain, mainly with new drugs and molecules, new chemical entities and research areas which can give us better medicines for cancer, diabetes management and kidney disease.

It is all the more imperative to do so because innovation accounts for two-thirds of the global value pool. Some Indian pharma companies have already taken the plunge into biosimilars which is an encouraging development. A strong R&D and innovation-based pipeline with potential breakthroughs in next-generation products will form the ladder to climb up the value chain.

Among other things, the strategy to move up the value chain ladder could include systemising the processes to expedite drug discovery and development in the country, and a plan of action to turn the country into one of the top five pharmaceutical innovation hubs. Given the industry’s capacity, playing at scale in the innovation space will benefit the country because it will bring new solutions to address unmet healthcare needs.

Market expansion

Exports account for half of the pharma industry’s revenue. While the industry already has a substantial export market, it is also poised to further expand its presence in the emerging markets of Asia-Pacific, Latin America and Africa. These regions offer opportunities for growth due to their increasing healthcare expenditure and a growing middle-class population that demands high-quality healthcare products.

India’s trade pact with the UAE in 2022 meant that the pharma industry has secured greater market access in the Emirates.

Under the pact, Indian pharmaceutical products and medical goods will get regulatory approval within 90 days that have been approved in developed jurisdictions such as the US, the UK, the EU, Canada, and Australia. In Australia, the India-Australia trade deal would provide fast-track approvals and quality assessment/inspections of pharma manufacturing facilities.

For a foothold in under-penetrated markets such as Japan, China, Africa, Indonesia and Latin America, a new business model to adapt to the local markets will be an essential requirement. In Africa, where affordability is a main concern, Indian drug makers can address the issue very well.

Potential in biosimilars

India was among one of the first countries in the world to approve and market a biosimilar in 2000. In just over two decades since then, more than 100 biosimilars have been approved in the country. Spurring innovation in these product classes can usher in the next leg of growth for the Indian pharma industry.

By some estimates, the global biosimilars market could exceed $60 billion by 2030.

If India’s pharma industry captures even 10 per cent of this market, it could grow by 13 per cent.

The writer is a former Union Minister