Question – India has earned a phenomenal reputation in recent decades as a producer of generic medicines, yet the pharmaceutical sector is facing several serious challenges. Illustrate it.

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Question – India has earned a phenomenal reputation in recent decades as a producer of generic medicines, yet the pharmaceutical sector is facing several serious challenges. Illustrate it. – 9 July 2021

Answer – Producer of generic medicines | Pharmaceutical sector is facing several serious challenges

India occupies an important position in the global pharmaceuticals sector as India is one of the largest producers of generic drugs globally. Health is one of the most important sectors in the social and economic development of the world. That is why, the pharmaceutical industry is seen as a key industry in the process of economic development. The Indian pharmaceutical industry occupies an important position in the global pharma sector, and has seen significant growth in recent years.

The Indian pharmaceutical industry is the world’s third largest by volume and the world’s 14th largest by value.

Current Status of Indian Pharmaceutical Industry:

  1. India meets 50% of the demand for vaccines for different diseases in the world.
  2. Made in India accounts for 40% of the demand for generic drugs in the US and 25% of the total supply of drugs in the UK.
  3. Apart from this, Indian pharmaceutical companies supply 80% of the anti-retroviral drugs used for dangerous diseases like AIDS worldwide.
  4. According to a report by India Brand Equity Foundation, the total value of the Indian pharma industry in the year 2017 was around US$ 33 billion.
  5. In the year 2017 itself, the domestic business of the Indian pharmaceutical industry was US$ 18.87 billion, registering a growth of 9.4% in the year 2018 of the domestic business of the Indian pharmaceutical industry.
  6. Indian pharmaceutical industry has grown by 22.4% between 2015 and 2020, with an estimate currently the Indian pharmaceutical industry has a turnover of more than US$ 40 billion and will reach $120-150 billion in the next 5 years.
  7. According to an estimate, by the year 2020, the Indian pharmaceutical industry will be among the top three pharmaceutical markets in the world in terms of growth and the sixth largest market in the world in terms of size.

India’s position in generic drug manufacturing:

  • India is also far ahead of other countries in the manufacture of generic drugs. Only 9% of the medicines available in the Indian market are patents and about 70% of the medicines are branded generics. India is the largest producer of generic medicines in the world.
  • At present 20% of the total consumption of generic drugs globally is exported from India.
  • The demand for generic medicines made in India is also in many developing countries of the world including America, Europe, Australia, Canada, Japan and UK.
  • Indian generic drugs account for 90% of the US market, compared to 33% three decades ago.

Challenges related to Pharma Sector in India:

  1. Dependence on China: Despite being a global supplier of generic drugs, the Indian pharmaceutical industry is heavily dependent on China for raw materials for drug manufacturing.
  2. These raw materials are called active pharmaceutical ingredients (APIs). Indian drug makers import about 70% of their total bulk drug requirements from China.
  3. Shrinking of manufacturing sector: India is one of the regions where the drug is produced at a low cost and it is an exporter of simple formulations of patent free drug.
  4. However, recently the pharmaceutical manufacturing sector of the country has declined due to shifting of important manufacturing activities by the manufacturers to other countries, where necessary facilities are available at low cost.
  5. Fake medicines: Fake versions of high value or good brand pharmaceutical companies in India adversely affect their business.
  6. Price capping: The Indian pharmaceutical industry is facing pressure from both the government and civil society to make generic drugs more affordable for a large section of the country’s population.

The pharma sector of India is an emerging sector for the economy. This will increase the soft power of India. Thus, India needs to improve the challenges faced by the pharma sector and look forward to the future like biotechnology.

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