India’s $50 billion pharmaceutical industry is the third largest producer globally, in terms of volume. In perspective, India supplies nearly 60 per cent of global vaccines demand, 25 per cent of all medicines in the UK, and 40 per cent of the US’ generic demand, according to IBEF. This has put India’s pharma on the global map, as the country is now responsible for nearly 13 per cent of all medicines produced in the world.

Although the successes achieved in India’s pharmaceutical industry is yet to translate to commensurate financial earnings (where the nation still ranks 14 in value), the sector has come a long way in the last two decades, surpassing expectation and towering as a true success story of the government’s Make in India campaign. With new state-of-the-art pharmaceutical plants emerging and playing alongside legacy and burgeoning Contract Development & Manufacturing Organisations (CDMO), the industry may have just begun a new journey to future prosperity.

Outside the US, India has the second-highest number of plants approved by the US FDA. This further goes to show that the industry is not merely growing numerically, but has evolved in quality through research, innovation, and a commitment to save lives.

Building self-reliance for a prosperous pharma industry

Although the world’s biggest producer of vaccines and generic medicines, India has a number of challenges to contend with and the government is not shying away from them. Top among them is the country’s dependence on imports of Active Pharmaceutical Ingredients (APIs) and Key Starting Materials (KSMs), mostly from China. This trend has put a lot of strain on the country’s pharma manufacturers and CDMOs for many years, especially with regard to the increased cost of production.

In December 2022 alone, the cost of KSMs and APIs coming in from China rose by as much as 35 per cent as COVID infections in China began to rise again. Thankfully, the Production-linked Incentive (PLI) scheme introduced by the Indian government to support the local production of APIs, critical KSMs, and Drug Intermediates (DI) was already in motion. Manufacturers, especially those in the MSMEs bracket, further appreciated the intervention of the government, as it is the only way to ensure a continuous and uninterrupted supply of the critical raw materials needed in the pharma industry.

The PLI Scheme targeted 41 APIs, KSMs, and DIs which the country depends on in China. Beyond incentivising manufacturing and operations, the government — through the scheme — also supports research and development that will lead to self-reliance in APIs and safeguard the stability of the industry. As of March 2022, at least 32 manufacturing plants had begun production of 35 APIs in the country, part of the 53 APIs for which 90 per cent is import dependent.

Preventing disruptions, improving value and accessibility

The Atma Nirbhar Bharat campaign launched by the government has taken off in the pharmaceutical industry and is already yielding so much fruit. The situation where India had to pause manufacturing of certain drugs because China halted the supply of APIs and KSMs when COVID-19 broke out in Wuhan should never have happened again. For India to truly become the Pharmacy of the World, it must become self-reliant by improving local manufacturing capabilities and encouraging investments in the sector. This is one area the current government has pursued since its inauguration.

Furthermore, the need to continue to promote investments in R&D, while also improving the industry’s regulatory framework cannot be emphasised. Quality standards must be strictly adhered to by all players to maintain trust and confidence in the global market. The objective is to ensure the continuous flow of quality pharma products within and outside India by ensuring accessibility and affordability, without compromising on quality standards.

To ensure the vision of being the Quality Pharmacy of the world, MOHFW is continuously evolving the processes and regulations to support manufacturers and ensure strict vigil of manufacturing practices.

Views expressed by Sanjeev Jain, Jt. Managing Director, Akums Drugs & Pharmaceuticals

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