The Indian pharma industry operates at scale, and we are leaders in the global generic world. The Indian pharmaceutical market is estimated at $40 billion and pharma companies export another $20 billion. However, this is a miniscule portion of the $1.27-trillion global pharmaceutical market. India ranks third worldwide for pharmaceutical production by volume, but only 14th by value. While our global generic position is a matter of pride, India is only the 12th largest exporter of medical goods. We have more than 30 per cent share in the global generic market but less than 1 per cent share in the new molecular entity space.
India playing at scale in the innovation space will not just help the country but will create a source of sustainable revenues, bringing new solutions to unmet healthcare needs. In India, this would lead to reduction in disease burden (development of drugs for India-specific concerns like tuberculosis and leprosy does not get global attention), creation of new high-skilled jobs, and probably around $10 billion of additional exports from 2030.
Five key building blocks need to be in place for India to build a sustainable innovation story:
- An enabling regulatory structure with simplified processes, robust guidelines, predictability, increased capacity and strong governance. India needs a 60 per cent reduction in the approval timeline to be competitive.
- Robust funding support with government aid for industry investment through policies/incentives, direct government investment, and significant PE/VC investment. Countries vie for innovation dollars and India has to offer an attractive set of benefits — weighted R&D deduction, additional patent box benefits, and progressive policies to increase innovation funding are a must.
- Strong linkages between academia and industry with high quality academic talent and infrastructure, industry-oriented research, and strong governance. The US created the Bayh-Dole Act encouraging academics to set up independent companies. India needs world-class centres of excellence to attract global talent and support cutting-edge research.
- A favourable policy landscape through coherent policies across research, technology commercialisation and IP.
- Innovation hubs to accelerate collaboration. We need several at-scale innovation hubs co-locating academia, public R&D centres, industry, start-ups and incubators.
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