The Indian pharmaceutical industry has been charting an impressive growth story. The growth can be attributed to years of consistent focus on quality, affordability, and innovation. Touted as the ‘pharmacy of the world’, the Indian Pharma industry today delivers generic medicine to over 200 countries from both developed and emerging markets. It is soon expected to account for 13 percent of the size of the global pharma market.

However, the industry’s success is being challenged by emerging technologies, changing consumer behaviour, and tightening regulations. A looming global recession along with multiple headwinds is going to test industry’s resilience. A growing shortfall of input materials, rising inflation and supply-chain disruptions are all impacting the industry. To stay competitive and meet the changing demands of the market, the industry must evolve from a volume to value leadership.

Shift from volume to value leadership:

For years the Indian pharma industry has enjoyed much success in the generics space. But increasing competition and pricing pressures have made it difficult for generic drug manufacturers to maintain high profit margins. On the other hand, complex and specialty drugs offer several advantages. These drugs are often protected by patents, are given a period of exclusivity and higher pricing power. They often also require specialized manufacturing processes and expertise, creating barriers to entry for potential competitors. The Indian industry’s focus must now shift from volume to value leadership prioritizing research and innovation. The government’s Research Linked Incentive scheme can provide a much needed thrust in this direction for the industry.

 

Reducing dependence on imports and the push toward self-reliance:

Higher input costs have been affecting the profitability of Indian players. At present, India imports 85% of its required Active Pharmaceutical Ingredients (APIs) from other countries, especially China. The government’s Production Linked Incentive (PLI) scheme is aimed at countering this issue by boosting indigenous manufacturing and reducing dependence on imports for APIs and other key inputs. The government has identified it as a critical area for the industry to achieve self-sufficiency and collaboration is underway with the industry to achieve it.

 

Maintaining quality standards remains a top priority:

Site inspections and audits are back in full swing. The industry needs to be dynamic in upgrading its manufacturing capabilities while meeting the required global regulatory standards. Instances of audit observations by regulators impact compliance cost and in turn, hurt the profitability of the industry. Adverse observations from the regulators can lead to a delay in the launch of new products or even impact the revenue stream. The industry must ensure that it is are able to successfully sail through the inspections to avoid speed bumps in its growth trajectory.

 

Leveraging the patent cliff:

The impending patent expiry for many blockbuster expensive drugs presents the Indian pharma firms with an opportunity to leverage its strengths in generic drug manufacturing and expand its market presence. By capitalizing on such opportunities, the industry can enhance its competitiveness. However, sustaining long-term growth will require maintaining high-quality standards, adhering to regulatory compliance, and investing in R&D.

 

New leaders must take the reins of the growth story:

Effective leadership will be instrumental in shaping the future Indian pharma industry. The industry needs leaders who have the ability to drive change, foster innovation, and steer the industry towards growth and success. Leaders who can articulate a clear vision for the future of the industry and develop strategic plans to achieve it. The Covid-19 pandemic highlighted the industry’s resilience and the importance of visionary leadership, as Indian pharma companies successfully delivered vaccines not only within India but to multiple countries worldwide.

By prioritizing innovation, diversifying the supply chain, embracing an agile approach to drug development, and adopting digital transformation, the industry can navigate the challenges of inflation, geopolitical turmoil, and intensifying competition. The future of the Indian pharma industry holds great promise as it strives to meet the needs of patients and driven by innovation and a steadfast commitment to quality. The industry is poised to develop and deliver transformative healthcare solutions that improve lives and enhance access to affordable treatments globally and shaping a brighter future for patients worldwide.

About AVA Chemicals:

AVA Chemicals is a globally renowned company engaged in formulation and supply of premium-grade chemicals to diverse industries such as Pharmaceutical & Lab Reagents, Agrochemicals, Home & Personal Care, Oil & Gas, Water Treatment and many more. Over the last three decades, AVA Chemicals set-up three state-of-the-art Facilities (ISO and HALAL certified) in Badlapur, India, and a strong Clientele presence in over 45 countries. It aims to be known as an ethical company providing chemicals to companies who manufacture products that are used in day-to-day life, thus touching the lives of millions of people.

 

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