India enjoys an important position in the global pharmaceuticals sector. It is the largest provider of generic medicines globally, occupying a 20% share in global supply by volume, and also supplies 50% of global demand for vaccines the largest in the world. India ranks 3rd worldwide for production by volume and 13th by value, thereby accounting for around 10% of the world’s production by volume and 1.5% by value.
The pharmaceutical industry was valued at $ 36.7 bn in 2018. The market is expected to expand at a CAGR of 22.4% over 2015–20 to reach $ 55 billion. India’s pharmaceutical exports stood at US$ 17.27 billion in FY18 and have reached US$ 19.14 billion in FY19. Pharmaceutical exports include bulk drugs, intermediates, drug formulations, biologicals, Ayush & herbal products and surgical.
Generic drugs, with 71% market share, form the largest segment of the Pharmaceutical industry in India. This is set to grow as exports of generics to the US rise, as branded drugs worth US$ 55 billion will become off-patent during 2017-2019.
Some of the initiatives taken by the government to promote the pharmaceutical sector in India are as follows:
- The Drug Controller General of India (DCGI) announced its plans to start a single-window facility to provide consents, approvals and other information. The move is aimed at giving a push to the Make in India initiative.
- The Government of India is planning to set up an electronic platform to regulate online pharmacies under a new policy, in order to stop any misuse due to easy availability.
- The Government of India unveiled ‘Pharma Vision 2020’ aimed at making India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments.
- The government introduced mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines.
- 100% Foreign Direct Investment (FDI) is allowed under the automatic route for greenfield pharma, whereas in brownfield pharma 74% is allowed under the automatic route and thereafter through government approval route.