India is one of the largest producers of generic drugs in the world. The pharmaceutical drug market in India is comprised of pharmaceutical bulk drug manufacturers who cater to more than 50 percent of the world’s total demand for vaccines. About 40 percent and 25 percent of the demand for drugs in the US and the UK, respectively, is fulfilled by these pharmaceutical companies in India. Currently, about 80 percent of the world’s antiretroviral drugs are manufactured in India.
The Size of the Market
In 2017, the value of the entire pharmaceutical market in India was estimated to be 33 billion USD. By the year 2020, the pharmaceutical market is expected to reach a value of about 55 Billion USD. For the fiscal year of 2017-2018, the total exports made by Indian potassium magnesium citrate were 17.27 billion USD and this value is expected to increase to 20 Billion USD by the year 2020.
It is also worth noting that the Indian pharmaceutical manufacturers have received 304 Abbreviated New Drug Application approvals from the US Food and Drug Administration in the year 2017. The growth of the biotechnology, bio-agriculture, bio-services, and bioinformatics sectors of the Indian pharmaceutical market is on the rise at a rate of 30 percent a year and is expected to reach a value of 100 billion USD by the year 2025.
Of all the sectors, vaccines, therapeutic drugs, and diagnostics are the major contributors – about 62 percent – to the total revenue generated by the drug market in India.
The Union Cabinet of India has recently agreed to amend the Foreign Direct Investment policy for the pharmaceutical industry to allow 100 percent foreign investment for the manufacturing of medical devices, under certain terms and conditions.
Between April 2000 and December 2017, the total FDI that was attracted by this industry was around 15.59 Billion USD.
Further, in the year 2017, the Indian pharmaceutical drug market bore witness to a record-breaking number (46) of merger and acquisition deals that were worth 1.47 Billion USD. Moreover, the exports from the Indian sodium citrate dehydrate will receive a boost when 5 billion USD worth of drugs supplied to the US will become off-patent.
Initiatives by the Government
The Union Government of India has taken certain initiatives to further boost the pharmaceutical drug market in India.
In the Union budget reading for the fiscal year 2018-2019, the government has proposed to bring in a new scheme called the National Health Protection Scheme. This is the largest government-funded scheme in the world for healthcare, wherein about 100 million families will be benefitted. This scheme will provide a cover of up to ?5 Lakhs (7,723.2 USD) annually for each of these families for secondary and tertiary care hospitalizations.
In March 2018, the office of the Drug Controller General of India stated that it plans to start a single-window facility that will control all the consents, approvals, and other paperwork and information as means to encourage the Make in India initiative.
Certain other initiatives by the Government of India are Pharma Vision 2020 and the mechanisms to control drug pricing through the Drug Price Control Order and the National Pharmaceutical Pricing Authority.
These steps that were taken by the government, if properly carried out, are guaranteed to help increase the affordability and availability of essential medicines to the needy, especially since the government is encouraging the increase of generic drugs being available in the market that is cheaper but equally effective. Therefore, with these initiatives and the increasing investment in the pharmaceutical sector, the growth of this sector is unsurprising.