As the global supply chain faces the disruption over outbreak of Coronavirus, the Indian pharmaceutical industry is feeling the heat. India is among the major exporters of generic drugs to countries around the world including the United States. But for the production of pharmaceutical, 80% of active pharmaceutical ingredient (API) is imported from China, which is under the grip of Coronavirus. The price of anti-biotics have risen over 40 percent given the disruption in the raw material supply from China.
If the global pharmaceutical supply chain is disturbed, it is bound to hit the India as well as the United States, the United Kingdom and other western countries, where India supplies 20-40 percent (varies country to country) total generic drug requirement. India is one of the largest pharmaceutical exporters with total export of 12.1 billion dollars, or, 3.4 percent to global market, and ranks 9th in the list of top global exporters of pharmaceutical products.
The pharmaceutical industry grew at double digit in the last decade except for the last one or two years, when the growth slowed due to regulations put by the government and other disruptive reforms. “The industry has seen many regulatory interventions over the last one year, which will require careful consideration by Pharma companies as they plan their future strategies,” said Sujay Shetty, leader, pharma life sciences, PwC India.
Currently, the industry has an annual revenue of around 1.3 lakh crore rupees or 33 billion United States dollars. The largest players are Dilip Shanghvi led Sun Pharmaceutical, Lupin Limited of Desh Bandhu Gupta, Dr. Reddy laboratories of Reddy’s, Cipla, Aurbindo Pharma, Piramal Enterprise, Glenmark Pharmaceutical, Torrent, Biocon, and Serum Institute.
Many Indian billionaires made their fortunes in the pharmaceutical sector, and it is arguably the largest sector in term of billionaires after the Information Technology-BPM sector.
In the next fiscal year, the pharmaceutical industry is expected to grow at the rate of 10-13 percent, as per report by consultancy, Icra. “The Indian pharmaceutical industry’s growth remained stable at 12.2 per cent during H1 FY2020 led by rebound in domestic growth in Q2 FY2020 to 14.2 per cent supported by seasonal factors and stable growth in chronic therapies,” Icra Vice President & Co-Head Gaurav Jain said.
The Indian pharmaceutical industry has very robust fundamental infrastructure, and have opportunity to grow domestically and globally. As the Modi government’s focus has been on the availability of basic healthcare services to every citizen of the country, the health and pharmaceutical industry is set to benefit.
Therefore, the pharmaceutical industry is set to grow at double digit pace in near future. The industry is also adopting digital technologies, where India is ahead of many countries, to modernize the existing infrastructure of the industry. “Life Sciences 4.0 is all about the ability of the life sciences companies to strategically move from one stage of business maturity to another at the right time and with the right capabilities. Indian companies may be behind their global peers, but they have the advantage of learning from global failures and successes,”EY India national health services sector leader Sriram Shrinivasan said.
The government’s expenditure on health has increased exponentially in the last few years. The Union government came up with Ayushman Bharat scheme to provide insurance coverage of 5 lakh rupees per annum to 50 crore people of the country and many state governments like Delhi and Uttar Pradesh have also increased expenditure on health.