The global pharma industry has witnessed an exponential development and growth in the last few decades. With the advent of COVID-19 in 2020, the industry has experienced a quantum jump to become a resilient pillar of the economy. The global pharma market had marked a total revenue of $1,112.6 billion in 2020, indicating a Compound Annual Growth Rate (CAGR) of 5.6 per cent between 2016 and 2020. As one of the largest contributors, our domestic pharma sector has also shown a considerable increase in growth of around 15 per cent in the last year. The market is predicted to further witness a strong post-COVID boost and grow at CAGR of approximately 12 per cent to reach $130 billion by 2030, with innovation and R&D slated to be the big drivers of growth, moving forward.
A peek through India’s pharma capacity
The Indian pharma industry’s consistent growth records have earned it a place on the global map. It has been able to export drugs to over 300 countries and vaccine supplies to more than 250 countries. The pandemic too, served as an example for India to demonstrate its manufacturing and drug development prowess using native resources. Private players and the government jointly worked together to reshape India’s position in the pharma space, unrestricting its position from being just a generic drug manufacturer and supplier. Now, with several startups, innovators and big pharma companies bringing around a change in the world of healthcare and medtech and a large population size, the domestic pharma space is at the brink of advancements and modernisation. While it’s still at a very nascent stage, we need to drive in the power of investments and shift our focus to capitalise on this period of growth and innovation.
Budget 2022: A ray of hope for Indian pharma entities
Following a remarkable year of growth in the sector, the fiscal budget reiterates the government’s emphasis on globalising the Indian pharma industry. With a slew of policies and agile initiatives, the 2022 budget also saw a special focus on the sunrise sectors, which will make pharma verticals like biotechnology eligible for funding and assistance to build domestic capabilities as well as boost Research and Development (R&D). This is, indeed, an encouraging push to work towards building an agile and self-reliant industry, which has been Prime Minister Narendra Modi’s vision all along. Further, in line with the government’s vision of shaping an Aatmanirbhar Bharat, the budget has also focussed on building an open platform for the National Digital Health Ecosystem, comprising digital repositories and registering health providers, expanding the generation and acceptance of Unique Health Identity and providing universal healthcare. It also recognised the importance of Nari Shakti with the launch of three schemes – Mission Poshan 2.0, Mission Vatsalya and Mission Shakti.
Why we need to fill the gaps at the earliest to globalise
Though the present initiatives by the government are in tandem with the growth plans of the pharma sector, there are certain challenges that need to be addressed forthwith. While adoption rates are growing, India still lags on innovation and R&D in the pharma space, compared to other countries. Increased investment in the field of innovation is fundamental to cutting down healthcare costs and our reliance on other countries. Industry leaders can also benefit from the introduction of incentives tied to research-based policies. An ‘RLI’ scheme can help accelerate the end-to-end development of drugs, vaccines and chemical entities and formulations.
The government had already exempted the pharma companies from the strict environmental process since 2020 by reclassifying bulk drugs and intermediates from category A to B2. Further leniency in environmental clearances will speed up drug manufacturing. Policy support in the form of favourable licence renewals, capital subsidies and direct reimbursements is the need of the hour. Moreover, India could essentially benefit from a strong partnership among the government, academia and industry to promote the growth of this industry.
Academia and stakeholders need to go hand-in-hand to drive growth
Policies introduced through the years have certainly helped reduce costs and bring down manufacturing expenses of drugs and vaccines, which have facilitated the pharmaceutical companies to scale up their production. However, in order to move ahead and become the largest pharmaceutical market globally, there are certain challenges that need to be resolved at the earliest, and incentives, which need to be introduced, such as tax holidays and rebates. We must also not forget that India houses a large STEM talent pool and academic talent. Increased collaboration between stakeholders and the involvement of academia in the field of R&D can bring tremendous results. A conducive policy framework will help the pharma sector to become the largest innovation-induced manufacturer in the world.