Related Topics

MIRACLE DRUGS
2024 MAR   10
Pharmaceutical Sector
2024 JAN   14
Nilotinib
2023 JUN   23

Prospects And Challenges Of Pharmaceutical Sector In India

2022 JAN 26

Mains   > Economic Development   >   Indian Economy and issues   >   Pharmaceutical sector

WHY IN NEWS?

  • In its latest report, ICRA has argued that Indian pharma could clock in 9-11% of growth in FY22, driven by a push from domestic and emerging markets.

STATISTICS:

  • India is the largest provider of generic drugs globally.
  • Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK.
  • Globally, India ranks 3rd in terms of pharmaceutical production by volume and 14th by value.
  • Economic Survey 2020 acclaimed Pharma sector as one of the top 5 sector which reduce trade deficit of India
  • The domestic pharmaceutical industry includes a network of 3,000 drug companies and 11,000 manufacturing units.
  • Over 80% of the antiretroviral drugs used globally to combat AIDS are supplied by Indian pharmaceutical firms.
  • India's biotechnology industry was valued at USD 64 billion in 2019 and is expected to reach USD 150 billion by 2025.
  • India’s medical devices market stood at USD 10.36 billion in FY20. The market is expected to increase at a CAGR of 37% from 2020 to 2025 to reach USD 50 billion.

INDIA'S OPPORTUNITIES IN THE PHARMA SECTOR

  • Human resource
    • Low cost manpower with expertise in Pharma
    • Large talent pool of scientists and engineers
  • Market size
    • According to the Indian Economic Survey 2021, the domestic market is expected to grow 3x in the next decade.
    • India’s domestic pharmaceutical market is estimated at USD 42 billion in 2021 and likely to reach USD 65 billion by 2024
  • Economic drivers:
    • High economic growth along with increasing penetration of health insurance to push expenditure on healthcare and medicine India.
    • Increasing population with health awareness also increases health care demand
    • Global demand for generic drugs growth at 10-15% over the past few years
    • Patent expiration and aging population in the US, Europe, and Japan.
  • Cost competitiveness
    • India ranks 3rd in terms of pharmaceutical production and 14th in terms of value >> which implies low cost
    • Vast network of drug manufacturing companies with more than 11000 units >> economy of scale
  • Tourism drivers:
    • Pharma sector is a crucial component of medical tourism
  • Export potential
    • India’s drugs and pharmaceuticals exports stood at USD 24 billion in FY21.
    • India is the 12th largest exporter of medical goods in the world. The country’s pharmaceutical sector contributes 6.6% to the total merchandise exports.
  • Increasing FDI inflow
    • Pharmaceutical  sector received cumulative FDI of USD 17 billion since 2000

CHALLENGES

  • Policy and regulatory challenges
    • IPR regime of India not favourable to Pharma industry
    • Drugs price control order puts pressure on prices
    • MRP based GST levy >> burdens companies with higher tax
    • Low data collection on drugs coupled with insufficient training to drug inspector leading to huge malpractice among drug sellers 
  • Dependence on imports for Active Pharma Ingredients (API)
    • Example : 77% of APIs are imported from China
  • Quality issues
    • This is evident from ban on certain drug on ground of poor quality by EU
    • Lack of quality enforcement standards
  • Marketing side
    • Pharma companies often resort to unethical practice of providing freebies and gifts to Doctors to promote their drugs
    • Lack of adequate training to medical representatives along with prevalence of Quack(fake doctor) increases risk of life of patients.
  • Poor research and development
    • Due to fund constraint and lack of academia-industry linkage

INITIATIVES:

  • Production Linked Incentive(PLI) Scheme for
    • Bulk Drugs
    • Medical Devices
  • Institutions:
    • Central Drugs Standard Control Organization (CDSCO) Source
      • It is the Central Drug Authority for discharging functions assigned under the Drugs and Cosmetics Act
    • National Pharmaceutical Pricing Authority (NPPA)
      • It is a government regulatory agency that controls the prices of pharmaceutical drugs in India
      • The NPPA regularly publishes lists of medicines and their maximum ceiling prices.
    • Pharmaceuticals and Medical Devices Bureau of India (PMBI)
      • To implement Pradhan Mantri Bhartiya Janaushadhi Pariyojana.
  • National Biopharma Mission:
    • Development of pharma products
      • Development of products from leads that are at advanced stages in the product development lifecycle and relevant to the public health.
    • Infrastructure:
      • Strengthening and establishing shared infrastructure facilities for both product discovery validation and manufacturing
    • Human capital:
      • Developing human capital by providing specific training to address the critical skills gaps in researchers, value chain etc.
    • Tech transfer:
      • Creating and enhancing technology transfer and intellectual property management capacities and capabilities in public and private sector.
    • Supports MSMEs:
      • The Mission is supporting small and medium enterprises so that they can overcome the risks involved in early stages of product development.
    • Promote entrepreneurship
      • Mission is supporting enhanced industry-academia inter- linkages and providing mentoring and training for academia, innovators and entrepreneurs to translate knowledge into products/technologies
    • Promote inclusiveness:
      • Strengthening the ecosystem for affordable product through >> development of vaccine candidates for Cholera, Influenza, Dengue etc
    • Bio-Technology Parks:
      • These parks are successfully accelerating the commercialization of new technologies, assisting new enterprises to forge appropriate linkages with other stakeholder of biotechnology sector including academia, industry and Government
      • Ex: Biotech Park, Lucknow
  • Initiatives in Medical Device Sector
    • 100% FDI is allowed under automatic route in this sector
    • Setting up of 'Medtech Parks'
    • Production Linked Incentive (PLI) scheme
    • Scheme for Promotion of Medical Device Parks
    • Medical Devices Amendment Rule 2020
      • For making the sector more regularized.
    • EEPC India's Medical Device Expo
      • It seeks to link suppliers and vendors and help build a robust manufacturing eco-system.
  • Pradhan Mantri Bhartiya Janaushadhi Pariyojana
    • It aims to provide quality medicines at affordable prices to the masses.
    • Under this scheme PMBJP stores have been set up to provide generic drugs, which are available at lesser prices but are equivalent in quality and efficacy as expensive branded drugs
  • Investment:
    • 100% foreign investment is allowed under automatic route in Medical Devices and pharmaceutical projects
  • Affordability:
    • Jan Aushadhi Suvidha Sanitary Napkin at Rs. 1 per pad
  • Drugs and Cosmetics Act, 1940
    • It aims to regulate the import, manufacture and distribution of drugs in India.
    • The primary objective of the act is to ensure that the drugs and cosmetics sold in India are safe, effective and conform to state quality standards.

WAY FORWARD

  • Increase in the budgetary allocation
    • An increase in the budgetary allocation from the current 1.8 per cent of the GDP to 2.5-3 per cent, as envisaged in the National Health Policy 2017 along with a separate allocation for the bio-pharmaceutical sector Research and Development is imperative.
  • Specialization in certain areas
    • Establishing expertise in specialty and innovation-heavy pharmaceutical areas such as complex generics, novel biologics and biosimilars, preventive medication and those with unmet therapeutic needs will be the next step to fueling the engine of growth.
  • Improve ease of doing business in the sector
    • Simplification of various processes in order to enhance ease of doing business for the private sector companies.
  • Focus on integrated capabilities
    • In the post-pandemic world >> it is crucial to create and build infrastructural and linked integrated capabilities like telemedicine,  home and senior care so that people can access quality and critical healthcare services equitably.
  • Rationalization of GST
    • The sector has not been able to derive the benefits of the GST transition.
    • In fact, the embedded taxes in the sector have increased in the post-GST regime compared to pre-GST scenarios.
    • Therefore, it is vital to rationalize GST to unlock the embedded credit which is trapped in the healthcare value chain
  • Industry-Academia linkages:
    • Strategically upgrade our academic curriculum to meet industry prerequisites and incentivising academic institutions to train and generate a pool of highly skilled human capital.
    • Leveraging and fostering intellectual potential can help us gain a foothold in the international market which is veering towards personalised medicine.
  • Continued fiscal support
    • Government should continue with the existing Customs duty concessions for medicines as any discontinuation in the current scenario will impact the accessibility of medicines.
    • Import duty exemptions for rare diseases innovator drugs developed globally should also be taken into consideration
  • Implementing the recommendation of Malshekar committee on drug regulation
    • Recommend a new structure for the Drug Regulatory System in the country including the setting up of a National Drug Authority
    • Recommended that the State Drug Control Organisations should be urgently strengthened
  • Creating a Digital Database:
    • For patients, drug usage and risk associated with the intake of drug
  • Revise the ethical code for Pharma companies
    • To discontinue freebies and gifts
  • Adequate infrastructure in tier 2 and 3 towns
    • The pandemic has made us realise the need of providing hospitals in tier 2 and 3 towns with adequate infrastructure
  • Rework with the IPR policies
    • To make Indian Pharma companies for encouraging more patents.
  • Addressing dependence on China for APIs:
    • Government need to frame a National Plan on self-sustaining in API’s and avoid over dependence on China.
  • Utilise the traditional knowledge in drug manufacturing 

CONCLUSION

  • The Indian pharmaceutical industry already has the advantage of scale and reach in the global pharmaceutical space.
  • Our country now needs to move up the value chain by scaling up its R&D and innovation >> thus helping the industry to advance from ‘Make in India’ to ‘Discover and Make in India’.

PRACTICE QUESTION:

Q. “There is an opportunity for the Indian pharmaceutical industry to play a larger role in global drug supply-security”. Discus