9 minute read 19 Dec 2023
The Indian pharmaceutical industry

Pharma and healthcare for India@100: a century of change on the horizon

By Suresh Subramanian

National Life Sciences Leader, EY Parthenon

Suresh is passionate about leading digital transformation, reimagining business models and customer experiences in the healthcare and pharma industries, helping clients drive new horizon objectives.

9 minute read 19 Dec 2023

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  • OPPI report : Reimagining pharma and healthcare

The Indian pharma and health sectors’ growth hinges on value-driven research, global supply chain integration, and equitable access.

In brief

  • The Indian pharmaceutical industry aspires to reach the milestones of US$130 billion by 2030 and US$450 billion by 2047 as part of the India@100 vision.
  • This upward trajectory will be propelled by the industry's commitment to innovation, integration with the global pharmaceutical landscape, and access to integrated healthcare.
  • Nurturing of talent, development of essential skillset, and expansion of capacity will be indispensable elements underpinning this ambitious growth.

Recognized as the 'pharmacy of the world' for several decades, the Indian pharmaceutical industry has garnered global acclaim, particularly for its leadership in the generic drugs sector. Impressively, it commands over 20% of the global generics supply by volume and addresses approximately 60% of the worldwide demand for vaccines . Beyond its global impact in improving health outcomes, the Indian pharmaceutical industry plays a pivotal role in propelling the country's economic growth and generating employment.

Anticipating a bright future ahead, EY and Organisation of Pharmaceutical Producers of India (OPPI) in their recent report, ‘Reimagining pharma and healthcare for India@100 – Bharat Ke Liye’, highlighted the potential ambition for the pharmaceutical and healthcare sectors in the coming decades.

India@100: Pharma sector ambition

Between September and October 2023, OPPI and EY undertook primary research, consulting with around 40 Chief Executive Officers (CXOs) from leading Indian and global multinational pharmaceutical companies and other industry organizations, to gain insights into the strategic priorities that will pave the way forward for the industry.  Following are the  focus areas that would help the Indian pharma and healthcare sectors in achieving the ambitious 2047 milestone: 

1. Unleashing pharma’s value-driven research and innovation potential

Leaders in global pharmaceutical companies agree that the next frontier for India is to focus on disruptive innovation. Establishing a resilient innovation ecosystem to foster collaborative engagement of various stakeholders, such as major pharmaceutical/biopharmaceutical entities, startups, biotechs, academia, and clinical researchers, is key to this shift towards value-driven innovation. This ecosystem's vitality is further contingent on facilitative elements like financing, infrastructure, and supportive policies and regulations.

Large pharmaceutical/biopharmaceutical companies play a pivotal role, not just in the research and development of drugs, but also in harnessing innovation potential emerging from academia and startups, and translating it into tangible market advancements. Global Capability Centers (GCCs) also make substantial contributions to the country’s innovation ecosystem by fostering talent and skill development throughout the value chain, especially in intricate and strategic domains.

In September 2023, the government launched the National Policy on Research and Development and Innovation in Pharma-MedTech Sector in India and Scheme for promotion of Research and Innovation in Pharma MedTech Sector (PRIP) . The policy will help to strengthen the ecosystem of skills and capacities including the academia and the private sectors and give impetus to new talent among the youth through start-ups. It will also build synergies between various government institutions and agencies.

Navigating the landscape of R&D with digital and data analytics:

Digital technology, data analytics, and artificial intelligence (AI)/machine learning (ML) hold the potential to transform the entire R&D value chain, from the intricate stages of drug discovery to the complexities of clinical development. This transformation can enhance efficiency and productivity, reduce costs and timelines, and improve patient access and diversity. Leveraging its robust IT capabilities, India has the potential to spearhead advancements in this field globally, and also propel the innovation trajectory of the country's pharmaceutical industry.

As numerous Indian companies embark on their journeys into the realms of next generation therapeutics, India is poised to undergo a transformative shift, progressing toward its Discovery 1.0 phase.

2. Becoming an integral part of the futuristic global pharma supply chain

Manufacturing and end-to-end supply chain management are pivotal components within the pharmaceutical industry. Over the past few years, several emerging trends such as pricing and inflation, technology implementation, focus on sustainability practices, transition toward personalized and next generation therapeutics, and innovative healthcare delivery models, are compounding the complexities within manufacturing and supply chain operations. These trends serve as crucial catalysts, necessitating a shift in priorities and much needed transformation of the manufacturing sector. These evolving industry trends, along with the macroeconomic variables, and geopolitical changes, position India at the forefront of the “China+1” opportunity.

During the CXO survey, industry leaders also highlighted the following three areas of focus for the Indian industry to be able to leverage these opportunities and become an integral part of the global pharma supply chain.

CXO survey: Key priorities for manufacturing and supply chain function

Several leading Indian pharmaceutical companies are undergoing digital transformation for  better operational efficiency and quality compliance. Notably, India has the most  USFDA-approved plants outside of the US. Scaling up in terms of quality is a natural progression for the industry.

3. Achieving sustainable and equitable healthcare access for all

Achieving equitable and sustainable healthcare access is a must for a country to achieve economic growth. Government of India has launched several initiatives to provide healthcare access to the population. Ayushman Bharat launched in 2018 is a significant step toward achieving universal healthcare coverage in the country. The Ayushman Bharat Digital Mission (ABDM), launched in 2021, is aimed at laying the essential groundwork for a seamless integrated digital healthcare infrastructure in India. These initiatives are expected to improve access and reduce cost, enabling coverage of a large part of the currently underserved population, and revolutionize access and healthcare delivery in the Amrit Kaal period.

In addition to the potential offered by various government initiatives, primary research underscored the necessity for comprehensive programs aimed at controlling and managing India's most prevalent non-communicable diseases (NCDs). Such programs promise a twofold advantage of enhancing healthcare quality and reducing the overall healthcare expenditure. Another critical finding was the necessity for programs aimed at empowering patients and healthcare providers throughout their healthcare and disease journey. Pharma companies, in collaboration with government and other associations, are playing an active role across the patient journey. 

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India's prowess in manufacturing, cost-effectiveness, and a highly skilled workforce has truly made it the powerhouse of global pharmacies. Riding on this wave, the Indian pharmaceutical industry has the potential not just to meet expectations but to exceed them. The key lies in deliberate and strategic investments, coupled with a focus on transformative innovation driven by value. 

About this article

By Suresh Subramanian

National Life Sciences Leader, EY Parthenon

Suresh is passionate about leading digital transformation, reimagining business models and customer experiences in the healthcare and pharma industries, helping clients drive new horizon objectives.