The Covid-19 pandemic might have pushed several economies and businesses to the brink, but what stood strong at such a crucial period was Indias pharmaceutical industry.
The government's focus on supporting the growth of the domestic pharma sector amid the pandemic couldn't have been timed better, say sector stakeholders.
Last month, the government had approved a production-linked incentive (PLI) scheme for the pharmaceutical sector, entailing an outlay of Rs 15,000 crore.
Besides, the government has also approved a total of 33 applications with a committed investment of Rs 5,082.65 crore under a separate PLI scheme for Active Pharmaceutical Ingredients (APIs).
Consequently, the Centre's new-found vision amid the Covid-19 pandemic for a self-reliant India -- 'Aatmairbhar Bharat' -- if accomplished may well place the country as the fulfilment centre of the world's pharma and healthcare needs.
At present, India is the largest provider of generic drugs globally. Indian pharma companies cater to over half of the global demand for various vaccines, along with 40 per cent of generic drugs demand in the US.
Notably, data from container logistics company Maersk showed that among the refrigerated cargo, pharmaceuticals export out of India rose steeply during 2020, with Q4 alone recording 47 per cent higher volumes as compared to the same period in 2019.
A recent manufacturing survey by Ficci noted that pharmaceutical is among the sectors expected to register strong growth going forward.
According to total sales audit data from IMS, Indian pharma market grew 2.6 per cent in February, decelerating from 6.6 per cent growth in January, said a report by Emkay Global Financial Services.
On the basis of moving annual total (MAT), the Indian Pharma Market (IPM) grew 3.4 per cent, primarily driven by new products growth of 3.4 per cent as pricing growth of 4.3 per cent was fully offset by a volume decline.
As per a report by India Brand Equity Foundation (IBEF), Indian pharmaceutical sector is expected to grow to $100 billion by 2025.
In the FY2019-20, pharmaceutical exports from India stood at $16.3 billion.
The industry too has taken up the challenge and building the required infrastructure and expanding operations to meet the rising needs, both domestic and global.
For instance, last December, Piramal Pharma Solutions announced plans to invest $32 million to expand its facility in Michigan, the US, with additional capacity and new capabilities for development and manufacturing of active pharmaceutical ingredients (APIs).
Further, vaccine maker Indian Immunologicals (IIL) in November 2020 began work to establish a new viral antigen manufacturing plant at an investment of Rs 75 crore near Hyderabad.
Further, the major focus on turning self-reliant in terms of APIs would also go a long way for the Indian pharmaceutical industry which was so far largely dependent on APIs from China.
Quoting Govind Jaju, founder of Suingora Consultants and an API industry veteran, Emkay said in a report that global companies, especially those based in the US and Europe, are actively looking to de-risk their supply chain from China.
They have three options ï¿½ produce APIs in-house, outsource manufacturing to other US or Europe-based companies, or choose a supplier from a developing country other than China, it noted.
"However, the first two options are not viable for their entire portfolio, leaving the third option. Here, Indian companies have an edge, given their long history of supplying APIs and formulations globally, better quality and regulatory compliance and better supply reliability," said the report.
It said that PLI and bulk drug parks will provide level playing field to Indian API manufacturers and lower the cost differential between India and China to close to zero for the APIs included in the PLI scheme as well as for any player who set up a plant in bulk drug parks.
With such a major focus on pharma in general and APIs in particular, India seems set to become the pharma supplier for the world, given the policies fall in place and support the industry's requirements.