What's Ahead In Pharma
The pharmaceutical sector in India has taken the one of the biggest leaps among other sectors in the country in recent years with its estimated growth rate reaching 11 per cent CAGR, which is expected to sustain and grow even bigger in the coming decade. India, known as the pharmacy of the world, is the 3rd biggest producer of medicines by volume and 14th by value. With a fleet of 3,000 domestic drug companies and 10,500 manufacturing units, the country enjoys a crucial place in the global pharmaceutical sector.
India’s domination in generics and vaccine exports is often called a soft power, as India is the biggest supplier of generic medicines and vaccines holding 20 per cent of the generics supply globally and delivering over 60 per cent of the world’s vaccines. Further supplying 40 per cent of all generic medicines in the US and 25 per cent of all medicines in the UK.
Union Finance Minister Nirmala Sitharaman recently at a book launch event of ‘India’s Vaccine Growth Story’ said, “Over the decades India has made remarkable contributions. Nearly 60 per cent of all the vaccines which are used in the world are produced in India. India has a singular contribution to make to the world in terms of vaccination and that which is being produced and supplied to the entire world.”
On the growth spectrum as per the Indian Economic Survey 2021, the pharmaceutical sector in 2021 stood at 42 billion USD which is now set to touch 64 billion dollars by 2024, and is expected to reach 130 billion dollars by 2030. Whereas the biotech industry valued at 70.2 billion USD in 2020 is expected to reach 150 billion dollars by 2030.
India is also the 12th largest exporter of medical goods in the world with exports that stood at USD 24.60 billion in FY 21-22, a minimal increase YoY from 24.44 billion dollars in the previous financial year. In the current fiscal the pharma exports recorded a growth rate of eight per cent amounting to 6.26 billion USD in the first quarter with officials in the Pharmaceuticals Export Promotion Council of India (Pharmexcil) claiming that the growth will touch ten percent by the end of the current fiscal year due to easing of restrictions in the European and CIS countries.
What's Driving Pharma
The key drivers in the pharmaceutical growth story of India are generic medicines, vaccines, over the counter drugs, contract research and manufacturing as well as biosimilars, with technology being an emerging push for the sector.
“Technology today is a key driver behind early disease detection and smart analysis. Today we are seeing some of the best minds anchoring key solutions such as non-invasive testing for NCDs such as cardiovascular, metabolic and to some extent even for cancer,” said Dr Anil Kukreja, Vice-President, Medical Affairs & Regulatory, AstraZeneca India.
According to the Investment Opportunities 2021 report of Niti Aayog, 8 out of the top 20 global generic companies are in India and moreover patents worth USD 251 billion are set to expire between 2018 and 2024 which will throw a lucrative opportunity for the Indian pharmaceutical sector. And the market size for biosimilars is also set to increase from the current USD 3 billion to 12 billion dollars by 2025. The report also highlights that as of 2019, the country had 98 biosimilars approvals which is the highest number globally.
In terms of vaccines, the country is a dominating example for the world, as it supplies over 1.5 billion vaccine doses to more than 150 countries annually. However it's important to note that the cost of production of pharmaceuticals in India is 33 per cent less than the US which is one of the contributing factors to the giant medicine production hub here in the country.
While speaking with BW BusinessWorld, Sajjan Singh, Additional Secretary, Ministry of Finance who wrote the recently launched book India’s Vaccine Growth Story from Cowpox to Vaccine Maitri said “Today we produce 62 per cent of the world's vaccine and we export it to almost all countries in the world, and two out of three children get Indian made vaccines in their arms after their births.”
Singh also talked about how Covid played a major role in India’s recent standing in the world as a quality and trusted vaccine exporter as the country developed the Covid vaccine at a breakneck speed of just 9 months.
While giving a sense of the coming decade in healthcare sector Dr Singh says the coming decade will be a golden era for the healthcare sector in India as the country has garnered experience, expertise and a reputation around the globe for making quality vaccines at affordable prices and this he says opens the pandora’s box for newer vaccines. “We developed the world's first DNA vaccine against Covid and now for so many other diseases people are trying DNA vaccines, and there is new area of therapeutic vaccines, vaccines against cancer, vaccines against non infectious diseases signalling that more specialised vaccines will be coming up in the near future,” he added.
With over 500 contract research labs and more than 6 million skilled investigators, India is also a preferred destination for clinical trials with a heterogeneous patient pool, a skilled labour pool and a 40 per cent to 60 per cent lower costs when compared with the developed markets.
Leveraging Technology
Technology in the pharma industry is accelerating the pace of the growth of the sector as well as simplifying the manufacturing processes, leading to a bigger and faster production of drugs in the country. Though technological interventions have always been the catalyst to revolutionary manufacturing of drugs, the newer adoption in the industry is of innovative and personalised product creation through the latest technologies like, AI, ML, Big Data, Bio Printing, Accelerated Automation and Simulation and Blockchain. Driving down costs of manufacturing and production through emerging tech is key to pharmaceutical innovation.
“A significant amount of work is taking place in the country to leverage technology especially in the healthcare sector to augment ease of detection, precise detection that can not only save lives but also enable physicians to deliver precise treatment to patients. AstraZeneca has invested behind a platform called ‘A Catalyst Network’ which is an interconnected, dynamic global network of more than 20 AstraZeneca health innovation hubs with physical locations and virtual partnerships. It aims to address healthcare challenges such as access and showcase patient‑enabled innovation within the health ecosystem.” stated Dr Kukreja.
Artificial intelligence and machine learning are assisting companies in optimising and automating production which is accelerating the drug discovery and manufacturing at a pace that was never seen before.
Big data on the other hand has also offered many futuristic and revolutionary avenues among them is personalised medicine or precision medicine, an innovative approach to tailor medicines as per an individual's genes, environment and lifestyles. Data analytics are also assisting in reducing the times of clinical trials to further increase the drug discovery process.
Although technology is leading the growth trajectory of the pharma industry, it also threatens its security as data security, data privacy and cybersecurity are the imminent dangers that come bundled up with it.
A report by Deloitte Touche Tohmatsu India LLP (Deloitte India) and Data Security Council of India (DSCI) tabled in 2022 says that between years 2019-2021 leading pharma companies increased their cybersecurity investments by a minimum of 25 to 30 per cent as the pandemic witnessed rising targeted attacks that led the pharma companies to double their investments in cybersecurity in past 18 months.
“The pharma sector must recognise cybersecurity as a key lever, working towards bolstering security around data, Operational Technologies (OT), and across the supply chain. This ability to utilise cybersecurity as a key enabler for business and digital transformation can help pharma organisations make the transition from a leader to a trusted leader,” Gaurav Shukla, Partner and Leader, Cyber, Deloitte India was quoted saying in the report.
Challenges
One of the main challenges that is on the increasing trend is the quality control in medicines in India, which puts the lives of the patients at severe risk.
Even after having the highest number of US Food and Drug Administration (US FDA) over 2,050 World Health Organisation-Good Manufacturing Practices (WHO-GMP) approved pharmaceutical plants and over 697 European GMP compliant plants, the rates of Substandard and Falsified (SF) medicine increased by 47 per cent during the year 2020-2021, a report tabled by Authentication Solution Providers’ Association (ASPA) stated.
During the Covid 19 pandemic incidents of SF drugs spiked relating to Covid products, subsuming vaccines, medicines, test kits, antibiotics, face masks and sanitisers. These incidents were reported in 23 different places in 29 States and 7 UTs. Globally during the pandemic SF drugs saw a rise of 11 per cent, the report said. The country therefore needs to further promote investment in quality control standards and come up with measures to counter SF drugs.
Another such challenge lies in the production of API’s ( Active Pharmaceutical Ingredients) ; APIs are used as raw materials for production of many crucial medicines. Several reports during the peak of the pandemic highlighted India's dependence on China for procuring crucial APIs as global supply chains were disrupted owing to the lockdowns and shutdowns in trade among many countries. It was reported that India received 70 per cent of its APIs from China between 2020-2021.
Although in March 2022, Union Minister for Health and Family Welfare and Chemicals and Fertilisers Mansukh Mandaviya highlighted that of the 53 APIs for which India was dependent on China, 35 APIs are now being produced in India in 32 plants opened under the PLI Schemes for the production of APIs. Sustaining and increasing the production of APIs till the country is independent of any imports will be the challenge going forward to keep global price volatility and disruptions at bay.
Research and development has for long been demanding a push in the pharma industry in India, the push by the government and the private sector is being demanded now more than ever as the country is positioning itself to become the biggest pharmaceutical industry globally. Making innovation and discovery of new drugs the key to becoming a leader of the world in the sector. As per market reports, on an average pharmaceutical companies in India spend 13 per cent of their annual turnovers on R&D which is comparatively almost half of what pharma companies in the US spend.
Although the government in March 2022 pledged Rs 500 crores under the SPI Scheme (Strengthening of Pharmaceutical Industry) for the period of FY 2022 till FY 2026, the country requires more such initiatives to realise its dream of becoming the leader of pharmaceuticals.
Future Growth
The future growth trajectory in the pharma sector will be defined by several factors such as the burden of diseases, rigorous research and development, quality compliance, production and investment of next generation APIs, fast paced initiatives and policies by the government. However the rise of patented drugs and biosimilars will depend upon accesing critical technology, regulatory guidelines and price differences in biosimilars and biologics.
“The next growth engine for the Indian pharmaceutical sector may be shifting to the production of basic generics as well as complex generics along with therapies having complex active ingredients, formulations that need the use of different routes of delivery and/or Novel drug delivery systems (NDDS), drug-device combos. The transition will also include the growth trajectory of APIs & intermediaries, biological products, etc, ” said Arushi Jain, Director(Corporate Growth & Excellence), Akums Drugs & Pharmaceuticals Ltd.
The perceptions of the world changed significantly on innovative pharmaceutical companies as they led the road to discovery of important vaccines and drugs and innovation during the pandemic. Global pharmaceutical companies partnered with academic institutions, non-profit organisations, government and regulatory bodies, to form lifesaving medicines in record time to serve humanity.
And India having played a key role in this transition has earned a global trust in the industry, and to sustain this trust and growth a few key imperatives that will measure out future of Indian pharma are going to be pricing flexibility, dedicated investment behind the R&D initiatives, and providing an enabling framework with initiatives by government to realise the dream of being the biggest medicine producer of the world and also move forward in the direction of becoming a stalworth in research in times to come.
