Indian pharma undergoes remarkable transformation

The Indian pharmaceutical industry has undergone a remarkable transformation over the last four decades, evolving from a drug-importing nation to earning the title of the “Pharmacy of the World.” This transition has been fuelled by a commitment to innovation, exemplified by initiatives like the Promotion of Research & Innovation Program Scheme, with a substantial Rs 5,000 crore fund. This program aims to foster collaboration among pharmaceutical companies, government research institutions, and start-ups, creating a dynamic ecosystem for pharmaceutical research and development.

The Indian pharmaceutical landscape comprises various segments, including generic drugs, over-the-counter medicines, bulk drugs, vaccines, contract research & manufacturing, biosimilars, and biologics. Notably, India has emerged as a global leader in vaccine production, supplying a significant proportion of DPT, BCG, and measles vaccines worldwide. The nation accounts for 60 per cent of global vaccine production, playing a pivotal role in meeting the WHO demand for crucial vaccines.

India’s prowess extends beyond vaccines; it is the largest provider of generic medicines globally, commanding a 20 per cent share in global supply by volume. The country boasts the highest number of US-FDA compliant pharma plants outside USA, housing over 3,000 pharma companies with more than 10,500 manufacturing facilities and a highly skilled workforce.

The Indian pharmaceutical industry’s global significance is underscored by its third position in volume and 14th in value worldwide. The industry demonstrated exceptional resilience during the Covid-19 pandemic, ensuring a steady supply of medicines and vaccines despite a nationwide lockdown. India played a crucial role in vaccinating its population and contributing to global vaccination efforts through the ‘Vaccine Maitri’ initiative, distributing over 290 million vaccine doses to more than 100 countries.

The industry’s dedication, flexibility and substantial capacity were evident as it developed medicines, testing kits, and treatments for Covid-19. The pandemic showcased India’s capability to respond to global health crises and solidified its reputation as the “Pharmacy of the World.”

Recent years have witnessed significant advancements in the Indian pharmaceutical industry, driven by cutting-edge technologies. Innovations in gene editing, nanotechnology, and artificial intelligence have empowered researchers and scientists to achieve breakthroughs. AI, in particular, has the potential to revolutionise healthcare and business operations.

In the post-Covid world, digital technology and AI have become indispensable, serving as a crucial differentiating factor across industries. The integration of these technologies is essential for businesses to stay competitive and relevant in the rapidly evolving landscape. The Indian pharmaceutical industry is not only embracing these advancements but also contributing to the global scientific community’s progress.

While the pharmaceutical industry has showcased remarkable growth and resilience, challenges persist. The Covid-19 pandemic revealed vulnerabilities in the supply chain, particularly in the availability of Key Starting Material (KSM). India’s dependence on imports for essential medical supplies highlighted the need for self-sufficiency.

The “Atmanirbhar Bharat” narrative, emphasising self-reliance, faced challenges due to disruptions in the supply chain during the pandemic. The industry experienced a surge in domestic pricing for several medications, emphasising the need for strategic planning and investment in domestic manufacturing capabilities.

A critical challenge facing the Indian pharmaceutical industry is its heavy reliance on imports, particularly from China, for fundamental raw materials like Active Pharmaceutical Ingredients. Approximately 70% of the pharmaceutical industry’s API needs are met through Chinese imports. The cost advantage of Chinese bulk medications, being roughly one-third less expensive than Indian-made APIs, has contributed to China’s emergence as a global leader in API manufacturing and export.

The highly subsidised pricing of Chinese APIs led to the shutdown of domestic API production plants in India. The lack of competitive pricing and lower returns on capital investments prompted Indian companies to cease API manufacturing activities. China’s success in creating affordable technology, coupled with advantageous government regulations, positioned it as the dominant player in the API market.

To ensure the long-term sustainability and growth of the Indian pharmaceutical industry, strategic interventions are imperative. Initiatives like the PRIP Scheme demonstrate the government’s commitment to fostering research and innovation. Collaborations between industry players, research institutions, and start-ups will be crucial in creating a robust ecosystem for pharmaceutical R&D.

Reducing dependency on imports, especially from countries like China, requires focused efforts to revive domestic API production. The government, in collaboration with industry stakeholders, should explore avenues to make API manufacturing economically viable in India. This includes addressing infrastructure needs, reducing technology costs, and implementing supportive policies.

Indian pharma industry: Future prospects
The Indian pharmaceutical industry stands at a pivotal juncture, grappling with transformative changes that are shaping its future trajectory. With healthcare assuming a central role in policy agendas, collaboration with the government has become indispensable for companies aspiring to thrive in this evolving sector. Stringent policies and expedited regulatory approvals are heightening competition, necessitating a ‘right first time’ approach. The industry is in the midst of a shift from ‘Make in India’ to ‘Develop in India,’ highlighting increased globalisation, a focus on rural markets, and an emphasis on value addition over pricing.

Furthermore, a noteworthy transformation is unfolding as medical devices, pharmaceuticals, and disposables sectors converge, fostering a collaborative mindset akin to strategies employed by FMCG/Consumer players. Managing diverse channels and engaging with a broad spectrum of consumers becomes crucial, especially with the growing influence of pharmacists’ vis-a-vis physicians and the empowerment of patients.

In the era of digital transformation, digitisation emerges as the backbone reshaping the pharma sector. Companies must exhibit agility in adapting to changing relationship dynamics driven by emerging digital players. Strategic investment in data and analytics capabilities becomes imperative for maintaining competitiveness in the digital era.

As the industry evolves, there is a pressing need for a transformation in existing skills and capabilities. Cost leadership becomes a core competence across functions, necessitating upskilling in key areas such as account management, sales, relationship building, and quality assurance and control. Simultaneously, organisations must adapt to emerging skills, particularly in the realms of digital technologies and advanced analytics, to stay relevant in this dynamic environment.

Building a talent pipeline for the future becomes crucial for sustained growth. Companies need to focus on attracting talent from outside the industry, setting them up for success. Investing in brand building and Employee Value Proposition becomes vital to enhance the industry’s attractiveness and draw talent from other sectors.

Amidst these changes, investment in training and capacity building is essential. The market disruption fuels demand for new skill sets and alters workforce expectations. A focus on reskilling existing employees through Learning and Development initiatives, tailored to future skill requirements, is imperative for staying ahead in this competitive landscape.

The healthcare sector, now a pivotal policy agenda for the government, witnesses a substantial increase in budgets. Effective collaboration with the government becomes crucial, with a focus on evolving Public-Private Partnerships models for participation in government-driven healthcare programmes.

Regulatory scrutiny is on the rise, demanding heightened focus on quality assurance and control, particularly for companies catering to developed markets. Compliance becomes a key challenge, necessitating a more ethical and transparent approach to operations and customer interactions for sustainable growth. Tightening policies and faster regulatory approvals intensify market competition, underscoring the importance of robust risk management.

Innovative strategies for navigating the future include involving patients in advisory boards. Patients, taking charge of their health with digital health, should be regarded as equal partners in hospitals, pharmacies, and pharmaceutical businesses. Their insights can be invaluable in creating products that precisely meet market requirements, ensuring the development of a forward-looking healthcare system.

The pharmaceutical industry is also undergoing a strategic shift towards a digital health strategy “around the pill.” Companies are exploring innovative techniques that integrate digital health technologies into medication, moving beyond traditional drug manufacturing and marketing. This approach concentrates on non-clinical, patient-support activities to enhance outcomes and fortify the healthcare system.

A futuristic avenue involves the development of digital pills, embedding electronic circuits into pharmaceuticals. Tailored for specific diseases, these pills enhance medication adherence for patients. Virtual reality is swiftly becoming a reality in hospitals, offering diverse applications, from assisting in surgeries to aiding medical education and managing chronic pain. Pharmaceutical companies can explore this avenue as an alternative to developing new painkiller varieties.

Precision medicine, with a focus on pharmacogenomics, is emerging as a key trend in the pharmaceutical industry. Tailoring treatments based on individual diversity in genes, environment, and lifestyle is gaining prominence, ensuring targeted therapeutics with minimal impact on healthy tissues.

Artificial Intelligence, is poised to revolutionise healthcare by mining medical information, creating treatment plans, accelerating medical imaging, and even aiding in drug development. AI-based drug development methods make discovering new medicines more affordable and efficient.

The future of the Indian pharmaceutical industry is characterised by dynamic shifts in government collaboration, regulatory landscape, industry dynamics, and technological advancements. Companies must adapt to these changes by upgrading skills, embracing emerging technologies, and fostering innovation. The integration of patients in the decision-making process and the exploration of futuristic technologies underscore the industry’s commitment to creating a healthcare ecosystem that is not only responsive but also anticipatory in meeting the evolving needs of society.