Pharmaceuticals Sector in India – Global Healthcare Backbone

India’s pharmaceutical industry is a cornerstone of the global healthcare sector, exemplifying innovation, quality, and accessibility. As the world’s largest generic medicines and vaccines supplier, this industry plays a crucial role in global health by providing affordable and effective solutions.

The sector is on a trajectory for significant growth, with projections indicating it will expand to $65 billion by 2024 and further to $130 billion by 2030 from its current valuation of $50 billion as of 2023, i.e. at a CAGR of 17.26%. This robust expansion underscores India’s pivotal role in the global pharmaceutical landscape.

Here’s an exploration into how India has become the “pharmacy of the world” and its ongoing contributions to global healthcare.

Global Leadership in Vaccine Production

India stands as a primary pharmaceutical exporter, reaching more than 200 countries worldwide. It fulfils over half of Africa’s generic medication needs, nearly 40% of the generic medication demands in the U.S., and about a quarter of the medicine requirements in the U.K.

India’s pharmaceutical prowess is most evident in its vaccine production capabilities. Accounting for 60% of global vaccine production, India meets 70% of the World Health Organization’s (WHO) demand for essential vaccines such as Diphtheria, Tetanus, Pertussis (DPT), and Bacillus Calmette–Guérin (BCG). Moreover, it supplies 90% of the WHO demand for the measles vaccine. This makes India not just a leader but a critical player in global health security, ensuring the widespread availability of life-saving vaccines at low costs.

Dominance in Generic Drugs

With a 20% share in global supply by volume, India is the largest provider of generic medicines worldwide. The country manufactures over 60,000 generic brands across 60 therapeutic categories, emphasising the breadth and depth of its capabilities. This has bolstered India’s position in the global pharmaceutical market and played a pivotal role in ensuring access to affordable medication, including HIV treatments, across developing nations.

Regulatory Compliance and Infrastructure

A testament to its commitment to quality, India houses the highest number of US-FDA-compliant Pharma plants outside the USA. With over 3,000 pharma companies and over 10,500 manufacturing facilities, the industry is backed by a vast network and a skilled workforce. This robust infrastructure supports its expansive production capabilities and aligns with international quality standards.

Foreign Direct Investment (FDI)

The Indian pharmaceutical sector is bolstered by favourable government policies, allowing 100% FDI under the automatic route for greenfield projects. Up to 74% FDI is permitted under the same route for brownfield projects, facilitating international investment and collaboration. This open investment climate has been instrumental in driving growth and innovation within the industry.

Export Strength and Domestic Demand

The industry’s export strength is impressive, serving over 200+ countries with a total export value of $25.3 billion in FY 22-23. This widespread distribution network showcases India’s capability to meet global demand. The domestic market is also buoyant, propelled by strong government support and initiatives like the Production-Linked Incentive (PLI) Scheme to boost domestic manufacturing capacity and innovation.

Conclusion

India’s pharmaceutical industry is a beacon of hope, innovation, and resilience. Through its commitment to quality, affordability, and access, it has positioned itself as a global leader and a crucial ally in the fight against disease and ill health worldwide. As it continues to grow and evolve, the industry’s impact on global healthcare is poised to become even more significant, reinforcing its status as the world’s pharmacy.

Disclaimer: This article has been written for educational purposes only. The securities quoted are only examples and not recommendations.