API INDUSTRY-INDIA

Growth Opportunities
 INTRODUCTION
 India is “Pharmacy of the world” and contributes 20 per
cent to the global generics market. Every third tablet sold in
the US is from India. India’s pharmaceutical industry now
reportedly supplies:
 50 percent of the world’s demand for various vaccines
 40 percent of U.S. demand for generic drugs; and
 25 percent of all medicine in the UK
 The country also has a large pool of scientists and engineers
who have the potential to steer the industry ahead to an even
higher level. Presently over 80 per cent of the antiretroviral
drugs used globally to combat AIDS (Acquired Immune
Deficiency Syndrome) are supplied by Indian
pharmaceutical firms.
 Market Size & Regulatory
approvals
 Indian pharmaceutical sector is expected to grow to US$ 100
billion and medical device market expected to grow US$ 25
billion by 2025. Pharmaceuticals exports from India stood at
US$ 19.14 billion in FY19 and US$ 13.69 billion in FY20
(up to January 2020). Pharmaceutical exports include bulk
drugs, intermediates, drug formulations, biologicals, Ayush
& herbal products and surgical.
 Indian companies received 304 Abbreviated New Drug
Application (ANDA) approvals from the US Food and Drug
Administration (USFDA) in 2017 and received a total of
415 product approvals in 2018 and 73 tentative approvals.
The country accounts for around 30 per cent (by volume)
and about 10 per cent (value) in the US$ 70-80 billion US
generics market.
 Market Size & Regulatory
approvals
 India's biotechnology industry comprising
biopharmaceuticals, bio-services, bio-agriculture, bio-
industry and bioinformatics is expected grow at an average
growth rate of around 30 per cent a year and reach US$ 100
billion by 2025.
 India’s domestic pharmaceutical market turnover reached Rs
1.4 lakh crore (US$ 20.03 billion) in 2019, growing 9.8 per
cent year-on-year (in Rs) from Rs 129,015 crore (US$ 18.12
billion) in 2018.
 India has the largest number of dedicated contract
manufacturing organizations (CMOs) with small-molecule
API manufacturing facilities approved by the U.S. FDA or
the EMA. Government support would go a long way to
protect India’s pharma supply chains.
 Investments and Recent
Developments
 The Union Cabinet has given its nod for the
amendment of the existing Foreign Direct
Investment (FDI) policy in the pharmaceutical
sector in order to allow FDI up to 100 per cent
under the automatic route for manufacturing of
medical devices subject to certain conditions.
 The drugs and pharmaceuticals sector attracted
cumulative FDI inflows worth US$ 16.25 billion
between April 2000 and June 2019, according to
data released by the Department for Promotion of
Industry and Internal Trade (DPIIT).
 Investments and Recent
Developments
Some of the recent developments/investments in the Indian
pharmaceutical sector are as follows:
 During December 2019, on moving annual total (MAT)
basis, industry growth was at 9.8 per cent, with price growth
at 5.3 per cent, new product growth at 2.7 per cent while
volume growth at two per cent y-o-y. 
 In October 2019, Telangana government proposed
Hyderabad Pharma City with financial assistance from
Central government of Rs 3,418 crore (US$ 489 million).
 As on August 2019, the moving annual turnover (MAT) for
biosimilar molecules sold in the domestic market stood at Rs
1,498 crore (US$ 214.31 million).
 Healthcare sector witnessed private equity of total US$ 1.1
billion with 27 deals in first half of 2019.
 Investments and Recent
Developments
 The exports of Indian pharmaceutical industry to the
US will get a boost, as branded drugs worth US$ 55
billion will become off-patent during 2017-2019.
 Indian Govt said “For fermentation-based raw material
production, we will give incentive at 20% for the first
four years, 15% for the fifth year and 5% for the sixth
year on incremental manufacturing of raw materials.
 the Cabinet had approved a ₹10,000-crore incentive-
based scheme to boost domestic manufacturing of API’s
— a key raw materials for drug manufacturers — by
setting up bulk drug parks.
 Investments and Recent
Developments
 “In the long run, this move will help the sector regain
the dominance it lost over the years,” The scheme will
also help build a self-reliant supply chain security and
will aid the overall development of the Indian pharma
Industry.
 Government is mulling fiscal incentive and capital
subsidy for reviving and restarting old active
pharmaceutical ingredient units in a bid to make India
an alternative hub for bulk drugs at a time when China
faces quality as well as trust issues.
Advantages in India
 Advantages in India
 In India stands out as a cost-effective alternative to China.
The manufacturing and trade landscapes differ greatly
between India and China. India’s comparatively low wages
make it a much more cost-effective place to manufacture
certain types of products.
 Labor Cost: China’s labor costs soar in recent decades,
which now range from about US$140 to US$346 per
month, are set at the provincial level. Whereas India’s
minimum wages similarly vary across states and range
from about US$66 to US$202.
 Skilled manpower: India trains annually more than six
times the number of chemists trained in the U.S. It was
higher than any other country. Availability of Younger
manpower is greatest advantage.
 Advantages in India
 Trade war: Bilateral Trade war b/w china and US.
 Regulatory standards: Regulatory standards in
China were not consistent with international practices
whereas India practices in line with all the major
regulatory authorities’ requirements & guidelines.
 Regulatory approvals: India has the largest number
of dedicated contract manufacturing organizations
(CMOs) with small-molecule API manufacturing
facilities approved by the U.S. FDA or the EMA.
Government support would go a long way to protect
India’s pharma supply chains.
 Advantages in India
• Strong chemistry skills as demonstrated in the domestic market
• Low labor cost (1/7th ) compare to that in USA
• Lower cost of manufacturing (30-40%) as compared to western
countries with same quality
• Integrated business model creating a 'one stop' shop for innovators
• India has six times the number of trained chemists as the US,
which are available at 1/10th of the cost
• India has over 75 USFDA approved plants (the highest no. of FDA
approved plants outside the US)
• Abundant English speaking skilled manpower
• High quality telecom and IT infrastructure
• Indian companies have better regulatory skills like IPR adherence
 Government Initiatives
Some of the initiatives taken by the government to promote the
pharmaceutical sector in India are as follows:
 The cabinet approves Rs,10000crores incentive scheme to
API manufacturers in mar-2020 to promoting the domestic
manufacturing of API’s.
 In October 2018, the Uttar Pradesh Government announced
that it will set up six pharma parks in the state and has
received investment commitments of more than Rs 5,000-
6,000 crore (US$ 712-855 million) for the same.
 In March 2018, 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. 
Government Initiatives
 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
 Road Ahead
 Medicine spending in India is projected to grow 9-12 per cent over
the next five years, leading India to become one of the top 10
countries in terms of medicine spending.
 Going forward, better growth in domestic sales would also depend
on the ability of companies to align their product portfolio towards
chronic therapies for diseases such as such as cardiovascular, anti-
diabetes, anti-depressants and anti-cancers that are on the rise.
 The Indian government has taken many steps to reduce costs and
bring down healthcare expenses. Speedy introduction of generic
drugs into the market has remained in focus and is expected to
benefit the Indian pharmaceutical companies. In addition, the thrust
on rural health programmes, lifesaving drugs and preventive
vaccines also augurs well for the pharmaceutical companies.
 Road Ahead
 The Indian pharmaceutical market should grow from
nearly $34.3 billion in 2020 to more than $45 billion
by 2025 million, as Globaldata predicted.
 India has identified and prioritized production of 53
raw materials and 58 active pharmaceutical
ingredients (APIs) as part of its "China-plus-one"
policy to fill in supply gaps of affordable medicines,
sources told the outlet. The plan includes investing
$1.3 billion in domestic pharmaceutical producers and
potentially reviving state-run companies to ramp up
cheap generic production.