Page 471 - ES 2020-21_Volume-1-2 [28-01-21]

98 Economic Survey 2020-21 Volume 2

The global pharmaceutical market is set to exceed US$ 1.5 trillion by 2023. Against this
backdrop, the Indian pharmaceutical industry is currently valued at US$ 41 billion and is
expected to grow to US$ 65 billion by 2024 and about US$ 120-130 billion by 2030. A
significant raw material base and availability of a skilled workforce have enabled India to
emerge as an international manufacturing hub for generic medicines. Further, India is the
only country with largest number of US-FDA compliant pharma plants (more than 262
including APIs) outside of USA.

COVID-19 has presented both an opportunity and a challenge for India to emerge as the
‘pharmacy of the world’. During April-October, 2020, India’s pharmaceutical exports
totaling US$ 11.1 billion witnessed an impressive growth of 18.0 per cent, as against US$
9.4 billion during the corresponding period a year ago. This has led to an increase in the
share of pharmaceuticals exports in India’s total exports from 5.1 per cent in April-October,
2019 to 7.3 per cent in April-October, 2020, making it the third largest exported commodity.
The commitment of provision of COVID-19 vaccine to other countries has made India the
epicentre for its manufacturing. According to data available from US-FDA, Indian pharma
companies have garnered nearly 45 per cent of all new abbreviated new drug application
(ANDAs) approvals over the past nine months, which would aid exports growth in the
coming years.
The pandemic, however, exposed the excessive dependence of Indian pharmaceutical industry
on China for sourcing Active Pharmaceutical Ingredients (APIs) and Key Starting Materials
(KSMs). Further, there is a disproportionate dependence of Indian pharma exports on USA
and generics. To get over this challenge, pharmaceuticals drugs have been identified as one of
the ten key sectors for introducing Production Linked Incentive (PLI) Scheme for enhancing
India’s manufacturing capabilities and exports. This is in addition to the already notified
PLI schemes for bulk drugs and medical devices, which aim to provide a boost to domestic
manufacturing for critical KSMs/ Drug Intermediates (DIs), APIs and medical devices. Both
these schemes have received a very encouraging response from the pharmaceutical as well as
the medical device industry. Further, a scheme for promotion of bulk drug parks and medical
devices parks have also been announced.
Indian Pharma needs to rise to the golden opportunity presented by the pandemic and emerge
as the ‘pharmacy of the world’. A well-defined strategy for broad based development of the
industry needs to include the following components:

i. Broaden base in terms of markets, as well as product categories: Pursuing opportunities
in newer product classes such as biosimilars, gene therapy and specialty drugs and
increasing exports to large and traditionally underpenetrated markets such as Japan,
China, Africa, Indonesia, Russia/CIS countries, Brazil and Latin America, can usher-in
the next leg of growth for Indian pharma industry.

ii. Restructure the current regulatory mechanism and upgrade and build capacities at
various National Institute of Pharmaceutical Education and Research (NIPERs).

iii. Greater R&D Expenditure to move up the value chain from generics to Novel Chemical
Entities (NCEs).