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Competitive edge of Indian pharmaceutical industry

Guru Prasad Mohanta, R. Kumaravel Rajan and T. Purusoth Prabhu
Thursday, November 30, 2023, 08:00 Hrs  [IST]

The Indian pharmaceutical industry has gained the distinction of exporting quality and affordable medicines to more than 200 countries. It has been widely acknowledged as “Pharmacy of the World”.

Globally Indian Pharma is ranked third in terms of pharmaceutical production by volume. During 2021-22, total exports of pharmaceuticals stood at ? 1,74,955 crore (US$ 23.5 billion) which is a reflection of world’s trust on India produced medicinal products.

Indian pharma has been expanding its research and development (R&D) wing. The expansion of R & D ecosystem and increasing export has established the country’s potential in pharmaceuticals.

Pharmaceutical sector is one of the favourite sectors for foreign investors. Investor friendly foreign direct investment (FDI) policy is in place to promote investment in pharmaceutical sector.

Up to 100 per cent FDI in greenfield projects and up to 74 per cent in brownfield projects is allowed under automatic route. FDI beyond 74 per cent in brownfield only requires government approval.

The Department of Pharmaceuticals is the agency authorised to consider foreign investment proposals under the government approval route. During the financial year 2022-23 (till December 2022), Department of Pharmaceuticals approved 13 FDI proposals that would result in foreign investment inflow of ? 2,814 crore in the brownfield projects of pharmaceutical sector.

FDI inflow has increased substantially over the years: ? 1842 crore in 2018 - 2019 financial year to ? 10552 crore in 2021 - 2022 showing a whopping increase of 473 per cent.

API, key to growth of pharma industry
The availability of active ingredients at affordable price is key to the growth of pharmaceutical industries. India used to import the active pharmaceutical ingredients (API), also known as bulk drugs, to the extent of 70 per cent of its requirements from China only.

The import of bulk drugs in the year 2018-19 was $ 2.4 billion. Importing of these products have many issues including bilateral relationship with exporting country. It was the priority of the government to avoid the difficult time of non-availability of active pharmaceutical ingredients for patients and use by the industry.

The government has taken several steps including introduction of production linked incentive (PLI). Under the scheme the government has encouraged the production of raw materials (API).

The government allocated a substantial budget of ?15,000 crore for the pharmaceutical sector under the PLI scheme. This has resulted in establishment of 32 new plants for the production of APIs and production has now started in 35 of the 53 identified APIs.

Under the scheme, the government is providing viability gap funding to reduce dependence on imports. This is an initiative to become self- reliant. There are around 500 API manufacturers contributing about eight per cent in the global API industry.

Excellent infrastructure for R&D
India has an excellent infrastructure for research and manufacturing. India is home to highest number of United States Food and Drugs Administration (USFDA) approved units outside USA.

As of August 2021, there are 741 USFDA approved sites in India. There are significant number of World Health Organization (WHO) Good Manufacturing Practices (GMP) compliant plants and plants approved by other regulatory authorities.

India has occupied a premier position among the pharmaceutical manufacturing countries. Number of Abbreviated New Drug Application (ANDA) Market Authorizations secured by Indian companies: 4,346 (as on December 2020) is significant.

India has been contributing substantially in various fields including mathematics, astronomy, medicines, philosophy and literatures. This is evident in India’s rich literature. It is the home for most productive groups: it has more than 600 million people with an age group between 18 and 35 years.

Pharma being knowledge and technology- based field, the country provides multi skilled, critically thinking, young and future ready work force. There are many institutions who are training would be workforce for the field of pharmaceuticals for drug discovery to clinical research to regulatory approval to manufacturing drug products.

There are National Institutes for Pharmaceutical Education and Research, Indian Institutes of Technology, and Institutes of Science Education and Research. In addition, there are National Laboratories and Research institutes exclusively for Drug Research. Indian Institute of Immunology (III), National Chemical Laboratory (NCL), Central Drug Research Institute (CDRI) are just few names. India is a country for global good. A large number of qualified and trained persons are available for carrying forward the work on pharmaceuticals.

Product patent
India has already adopted the product patent provision. The Indian Patent Act is in compliance with international obligation, Trade Related Intellectual Property Rights (TRIPS). The Department of Industrial Policy and Promotion (DIPP) seeks to fast-track the patent application and processing procedure in order to improve situation and promote doing business in India.

Earlier, the country was not allowing product patent but amendment of patent act brought India’s regulation on par with international requirements. Though, it has accepted World Trade Organization’s (WTO) requirements but has not compromised India’s interest. It allows the patenting of real innovations but not evergreening. It tries to fine balance between patents and patents’ necessity.

During covid - 19, along with South Africa pleaded in WTO to improve the access to medicines and medical technology by relaxing intellectual property rights (IPR) norms. Never the less, India is always progressive. The issues related to Free Trade Agreement (FTA) are being sorted out.

Drug Research is a long- term activity involving preclinical and clinical studies. There are many Good Laboratory Practice compliant contract research organizations (CRO). These CROs have state of art facilities supporting the drug research companies identifying the potential drug molecules. They do also have services to animal pharmacology and toxicology testing facilities.

There are many organizations who support the researchers by conducting clinical trials. There is common perception that the clinical trial process: regulatory approval to conducting the clinical trials is a tedious process in India. It is just myth. There are government’s proactive approaches too.

The government has brought new rule, New Drugs and Clinical Trial Rules 2019, to streamline the approval and clinical trial process. Regulatory approval now takes 30 - 40 per cent less time. The new regulation provides several exemptions and improves overall efficiency in the process of regulatory approval for conducting clinical trials.

The government has started SUGAM, an e-governance portal, for all activities including seeking clinical trial approval which are governed by the National Drug Regulatory Authority to accelerate the process of governance. The availability of qualified and trained investigators has increased: doubled between 2015 and 2020. This supports clinical trial activity across all therapeutic categories.

Disease prevalence, good medical care facilities especially in private sector, availability of trained investigators and ethics committee makes India as fast emerging a favourable destination for clinical trials. Cost of conducting clinical trial is also an advantage.

Proactive initiatives by govt
There are many proactive provisions initiated by the government. It invites intrapreneurs to come to India under Make in India scheme. Jan Vishwas (Amendment) Act 2023 instilled confidence in the industry by decriminalizing petty offences. Based on this, the Drugs and Cosmetics Act is also amended.

Drugs and Cosmetics Act is the statute for governing import, manufacture and sale of pharmaceuticals in the country. The act decriminalises by imposing only a monetary penalty which is expected to have several positive implications for the industry and consumers. The removal of stringent punishments such as imprisonment from some of the provisions of the Drugs and Cosmetics Act is termed as a major transformation in regulatory landscape. This would invite more investment as fear of imprisonment is a thing of past.

Growth potential of Indian pharma
The Indian pharmaceutical Industry is currently valued at US$ 50 billion and is expected to grow at Compound Annual Growth Rate (CAGR) of 10.7 per cent and reach US$ 130 billion by 2030 [Federation of Indian Chambers of Commerce & Industry (FICCI) - Ernst & Young (EY)], the year of ending of Sustainable Goals.

This reflects the growth potential of Indian pharma. In spite of huge challenge created by the disastrous Covid - 19, the India and its pharma have overcome the obstacles and marching ahead. G20 meeting and its successful leadership has proved India’s strength and the growth of Indian pharma has shown its interest in promoting alliance and business.

The proactive approach of the government like Jan Vishwas Act (Amendment) to promote business with ease is another milestone measure. As a whole country provides unique opportunity for others to collaborate with Indian pharma for mutual benefit and serving the humanity.

India visualises to promote Indian Pharma as the global leader for quality medicines and has been encouraging investment for make in India in this sector. India provides all requirements starting from API to approved manufacturing units to manpower requirements to favourable environment for doing business. It is worth exploring.     

(Authors are faculty C. L. Baid Metha College of Pharmacy, Thoraipakkam, Chennai)

 

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