Future Of Pharmaceutical Industry In India- 2022

Pharmaceutical Industry

During the last few years, India has done very well in the pharmaceutical industry. The Indian pharmaceutical sector has experienced rapid growth. The success story of the Indian pharmaceutical industry can be attributed to numerous factors, including its low cost of production, skilled workforce, and robust R&D infrastructure. In terms of global market share, generic products dominate, and they will do so for some time.

As a direct consequence of the constant growth rate of Indian pharmaceutical manufacturing companies, pharmaceutical companies from around the world are also setting up manufacturing units in India. The cost of producing active pharma ingredients in India is almost 33 per cent lower than the cost of producing them in the United States. It is one of the main reasons why western pharma companies invest in India, especially post-pandemic.

Benefits Enjoyed By Pharmaceutical Sector In India

Market Size

Western medicine is in high demand in India, encouraging partnerships between Indian and Western production centres. Companies from the West are partnering with Indian companies to satisfy the increasing demand. The Indian pharmaceutical industry is large, and Indians can purchase important generic drugs at a lower cost, thus strengthening the Indian market.

Low Prices

Despite the dexterity of the country’s pharmaceutical industry, there is a high number of well-trained chemists in India. Since India is one of the leading suppliers of generic drugs, drugs are extraordinarily cheaper in India. Consequently, Indians can access high-quality health care and purchase medications from reputable pharmacies. As part of its efforts to ensure that its citizens have access to affordable medications, the government of India operates its drug store chain. To sustain the momentum towards producing high-quality and low-cost generic medicines, the government is also working with other small and medium-sized manufacturers.

India offers a 50% lower cost to set up a fully FDA-inspected manufacturing facility compared to the developed world. India has 60-70% fewer labour costs than developed nations. Comparing developed nations with the developing world, production and operation costs are 40-70% lower.

Competition and Rapid Growth

Because of the high level of competition and the growth of pharma manufacturing companies in India, drug prices have remained low. A number of factors have contributed to this growth, including better medical infrastructure, new markets, increased chronic disease diagnosis, and patented products. As a result of other favourable factors such as cheap labour, affordable equipment, low property prices and low utility costs, the country manages to manufacture drugs at a low cost.

Development And Production Processes By Digitization

Having made great strides in generics, the pharmaceutical industry is now well-positioned to bring cutting-edge products to market and enhance R&D capabilities. In order for the industry to succeed in the future, it needs to focus on several key areas:

  • Innovation and R&D: The industry must focus on innovation to move up the value chain. There must be a strong innovation pipeline for the Indian pharmaceutical industry to produce new products and molecular entities constantly. Currently, the industry is entering the complicated generics and specialised drug markets to achieve the same results. With a focus on patient needs, we should harness pharmaceuticals’ power to develop new drugs, biologics, and innovations while increasing their in technology and biological sciences capabilities.
  • Transformation of the digital landscape: This strategy is vital to improve patient care, ensuring greater transparency, reducing costs, and manufacturing more efficiently. Using the latest technologies, including artificial intelligence (AI), augmented reality (AR), machine learning (ML) and additive manufacturing, pharma companies can improve their R&D process, conduct clinical trials faster, and create more innovative products and services as well as improving compliance and manufacturing efficiencies.

Dependencies Of Covide-19 on Business

With 60 % of worldwide vaccine production coming from the country’s market, the Indian pharmaceutical industry ranks third in the world by volume. As a result, 40 to 70 % of the world’s supply of DPT and BCG vaccines is supplied to the World Health Organization (WHO), and 90 per cent of the measles vaccine is provided.

Millions of people worldwide can access affordable and low-cost generic drugs in India, which operates over 250 US Food and Drug Administration (FDA) and UK Medicine and Healthcare products Regulatory Agency (MHRA) approved manufacturing facilities. It is anticipated that active pharmaceutical ingredients (APIs) will generate $6 billion in revenue by the end of 2020.

The pharmaceutical industry’s strategic plan to combat COVID-19 depends fundamentally on the source of APIs, according to a report on the Indian pharmaceutical industry. Approximately 30% of the generic APIs used in the United States are sourced from India, which also provides API manufacturing for generic drugs across the globe. China, the top global producer and exporter of APIs by volume, is the largest supplier of APIs to manufacturers in India, procuring around 70% of their APIs from the country.

The coronavirus outbreak associated with SARS-CoV-2 has exposed the dependence of the Indian pharma sector on China for its API supply. Manpower shortages in China’s manufacturing plants affected supply chains and product exports from India. Further disruptions to logistic and transportation systems restricted access to and movement of products from ports, impacting supplies. China’s provincial governments adopted different quarantine policies in response to the virus, causing this phenomenon.

Before 1991, China supplied about 0.3% of the Indian API raw material; however, with the globalisation of companies and the rise of large-scale formulation manufacturing, API sourcing increased dramatically. Low production costs were the primary driver.

Currently, Indian pharmaceutical companies are heavily dependent on Chinese APIs, causing serious concerns for national health security. The Indian government has therefore set up a special task force to review the sector internally. According to a few key industry representatives and NITI Aayog (an Indian think tank), encouraging approvals for pharmaceutical infrastructure development, clearance from the environment ministry, and tax exemptions and subsidies to promote the pharma hubs would all be helpful for the market.


Indian pharmaceutical API  manufacturers have many advantages, including access to a large labour pool and technology that enable them to meet high regulatory standards of markets such as the US and EU.


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