India’s position as the world’s pharmacy hub is growing but more new research is needed

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Medical researcher in lab

Production of Medicines


During the last eight years, India’s drugs and Pharma products exports grew at an impressive 103%. Exports of drugs and Pharma products amounted to Rs 90,414 crore in 2013-14 and increased to Rs 1.83 lakh crore in 2021-22. As a result, India now plays a significant role in the production of medicines in the world and is well on its way to becoming a world leader in this area.

  • Read full story below after Author’s Bio-section
Single photo of Prahlad Sabnani copy

Shri Prahlad Sabnani, Deputy General Manager of State Bank of India, Corporate Centre, Mumbai, has authored this article.  During his 40 year tenure, He has controlled rural, semi-urban and urban branches in the bank as Deputy General Manager, Regional Manager in the bank. He was recognized by the Indian Banks Association (IBA), Mumbai as the prestigious “CH Bhabha Banking Research Scholarship.” Under this, he successfully completed the research work on the topic “Branch profitability – its method of correct assessment”.

Besides being a successful banker and researcher, he has also written books related to economics and banking.  

In terms of size, India’s pharmaceutical industry currently ranks third globally

The total annual business of drugs in India from 2019-to 2020 was Rs 289,998 crore. India exports 20% of the generic medicines used in the world. India has a strong network of more than 10,500 industrial centers for drug manufacturing and more than 3,000 Pharma companies manufacturing drugs in India. India is also the largest vaccine-producing country in the whole world.

India supplies 62 percent of the total global demand for vaccines.

Today, India is strong with great confidence and respect worldwide for generic drugs and low-cost vaccines. As a result, the Indian pharmaceutical industry is showing significant momentum worldwide, and India has taken its step toward becoming the pharmacy hub of the world.

The Compound Growth (CAGR) rate of 9.43 percent has been achieved in the Indian pharmaceutical sector during the last nine years. Today, India has become the largest supplier of generic drugs worldwide. India manufactures about 60,000 generic drugs in 60 therapeutic categories. The Indian pharmaceutical industry also played an important role globally in combating the COVID pandemic.

During the period of Covid-19, India had provided a medicine called Hydroxychloroquine to 120 countries and exported Paracetamol in sufficient quantity to more than 20 countries. In addition, 6.50 crore doses of the Indian vaccine have also been provided to more than 100 countries. Today, India has become the powerhouse of the world in pharmaceuticals. Recently, the Prime Minister of Britain, Mr. Boris Johnson, during his visit to India, had told that the vaccine he had given to protect against corona was the Indian vaccine.

Entire world is trusting Indian medicines

It is a matter of pride for India that the heads of state of other developed countries are also relying more on vaccines manufactured in India than on their own. In this way the trust of the whole world on the medicines being manufactured in India is increasing day by day. According to an estimate, the size of the Indian Pharma industry will be US$ 600 million by the year 2024. Foreign direct investment of more than US$ 1200 million has also been made in the Indian Pharma industry from the year 2014 till date.

Medicines
Medicines

70% of the drugs are in the generic category

The data is not finished yet. India is the world leader in the production of generic drugs. In fact, the branded composition of generic drugs is very similar to that of branded drugs. However, they are sold under the chemical name so as not to confuse the public. For example, the Crocin and Calpol belong to the branded drug class, whereas the generic name of these drugs is Paracetamol. When a company finds a drug after many years of research, that company gets the patent of that drug, which has a period of 10 to 20 years. Only that company can manufacture and sell this drug during the patent period, which has discovered this drug. When a drug’s patent expires, that drug is called a generic drug. After the expiration of the patent, many other companies can manufacture that drug. Nevertheless, the name and price of this medicine remain different. In this situation, the drug is considered a generic drug. Only 9 percent of the drugs in the Indian market are in the patented category, and more than 70 percent of the drugs are in the generic category.

Indian generic medicines are considered to be of higher quality and cheaper in price

Indian companies are the first to make generic medicines and only Indian companies provide the cheapest generic medicines to the US and European market. Indian generic medicines are considered to be of higher quality and cheaper in price as compared to China. Generic medicines are much cheaper than branded medicines, that is why the central government has established Jan Aushadhi Kendras in India to make generic medicines available at cheap prices. More than 600 generic medicines are available at these centers, and more than 150 surgical items are also available at cheap rates.

doctor health hospital medical
doctor health hospital medical

Confidence in Indian generic medicines has increased worldwide, and these countries are now importing more and more from India. As a result, India has the largest share of generic drugs in the US market. The USFDA reports that 323 drugs from around the world were tested in 2017-18, and that the U.S. Food and Drug Administration has allowed most of the manufacturing units in India to export to the US, because India has passed this testing.
Simultaneously, the USFDA has allowed most manufacturing units in India to export to the US, justifying the standards for manufacturing units in India. Due to this, the dominance of Indian companies in the generic medicines market is increasing continuously.

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Thus overall, India’s achievements in manufacturing and export of medicines have been very commendable and encouraging. Over the next ten years, about 15 powerful drugs will be out of patent purview globally. The total volume of their business is around 7.50 lakh crores, i.e., around US$ 10,000 crores. After coming into the generic category of these drugs, how India will be able to meet the demand coming in such a vast quantity globally, is necessary to consider from now on.

One of the two crucial challenges that are going to come for this is to ensure the availability of raw materials (APIs) to manufacture these medicines. Today, India imports more than 70 percent of its APIs from China. Therefore, we are heavily dependent on China for the import of APIs.

  • We should quickly reduce our dependence on China by increasing API production in India itself.
  • Secondly, excessive dependence on the supply chain in the import-export of drugs can also cause huge problems at times. Due to the availability of raw materials and the bottlenecks in the supply chain, only the units manufacturing medicines in India may have to be closed. Therefore, not only the raw material used in the manufacture of medicines and some important drugs, the dependence on imports and the dependence on the supply chain should be reduced. Now, the time has come to think seriously about the above subjects. Otherwise, the progress which is being made in the field of medicine manufacturing should not be affected.
  • Thirdly, it is also necessary to consider increasing the role of Start-ups in the Pharma sector of India as the contribution of start-ups in this sector is yet to reach a high level.
  • Fourth, India now also needs to focus more on research and development of new drugs.

Along with this, it has become necessary to pay attention to getting the patent for new medicines. Because whatever achievements India has achieved so far in the field of drug manufacturing and export have mainly been achieved in the case of generic drugs. However, India has also been successful in making high-quality generic drugs available at comparatively very cheap rates to the whole world. Today, there is a massive demand for medicines produced in India, America, Japan, and all European countries. Today only 28 to 30 percent of medicines manufactured in India are sold in the USA. It is impossible to sell high-quality concentrated medicines in these developed countries without high-quality concentrated medicines. Today, most of the trust of developed countries has been established in the medicines manufactured in India.

Companies in India are not ready to invest such a large amount in the new research.

After researching new medicines, India’s participation in their manufacture is very less. With new research, an amount of US$ 3 to 40 million has to be spent to bring the new medicine to the market, yet it is not necessary that the said new medicine would be successful in the market. Therefore, companies in India are not ready to invest such a large amount in the new research. However, the Government is still trying to focus its full attention in this direction. Recently the Government of India has also implemented a production-based incentive scheme; the Pharma industry has also been included. In order to take advantage of this scheme, many big companies will be inspired to set up new industrial units to produce new drugs in India.

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