India’s pharma sector set for explosive growth, 79% CXOs see AI/ML as key, 86% call for ecosystem collaboration: EY Parthenon – OPPI report

• 75% pharma leaders emphasize the need for sustainable manufacturing practices
• Stress digital integration as crucial for improving healthcare access
• 63% CXOs highlighted the need for a single global product standard
• 50% believe regulatory simplification and streamlining will drive growth

Delhi, 28 November 2024: EY Parthenon (EY-P), the leading strategy consulting firm, in partnership with Organisation of Pharmaceutical Producers of India (OPPI), launched a report titled ‘Viksit Bharat@2047: Transforming India from pharmacy of the world to pharma powerhouse for the world’, to navigate the pharma industry’s journey towards global excellence. This report discusses how the industry, with support from the government and collaboration with startups and academia, is innovating and establishing capabilities to achieve US$450 billion market by 2047.

Between September and October 2024, EY-P and OPPI undertook primary research[1] consulting top CXOs from leading Indian and global multinational pharmaceutical companies, to understand their perspective about the pivotal growth areas for the pharma and healthcare sectors in the country. A key finding was the need for a unified vision for innovation, with a focus on building a collaborative ecosystem to define clear milestones and goals. Experts also identified quality and talent as crucial drivers of future growth.

In terms of key focus areas to strengthen innovation and R&D, 86% pharma leaders believe it is important to foster ecosystem collaboration, 79% believe AI/ML in drug discovery and clinical development process can help improve efficiency and productivity. 50% believe regulatory simplification and streamlining is key to growth.

Suresh Subramanian, Partner & National Life Sciences Leader, EY Parthenon India said, "India’s pharmaceutical sector is poised for explosive growth, with a projected $450 billion market by 2047. Our report highlights critical areas such as API and KSM manufacturing advancements and the increasing role of digital technologies in driving innovation. Insights from our survey of leading CXOs underscore the importance of ecosystem collaboration and sustainable manufacturing practices as key drivers for this growth. Coordinated efforts across industry, government, and academia will be crucial in positioning India as a global pharma powerhouse over the coming decade."

Adding to it, Anil Matai, Director General, OPPI said, “India has a comprehensive vision of transforming itself into a global pharma powerhouse, leveraging innovation, quality, and an integrated pharma supply chain. The report is both an ambitious roadmap and a call to action that aligns with India’s broader aspirations under the Amrit Kaal. It highlights critical themes that will build the future of pharma sector: the potential of value-driven research and high-impact innovation, the creation of a seamless global pharma supply chain, and the pursuit of sustainable and equitable access to healthcare."

Key findings from the CXO survey  

1. Focus areas for strengthening APIs and KSMs industry

The CXO survey revealed a consensus among experts: India has significantly advanced its journey toward self-reliance in Active Pharmaceutical Ingredients (APIs) and Key Starting Materials (KSMs) over the past years. The focus must be on developing methods that reduce costs, improve productivity and minimize environmental impact, aligning with global sustainability trends.

75% emphasized that the future of India's API industry lies in embracing sustainable practices, considering that the industry is capital and resource intensive. 63% believe it is crucial to build infrastructure and efficiency, whereas 38% said exploring new cost-effective materials and manufacturing processes can help move up the client value chain. Experts also underscored that 'quality' and a 'skilled workforce' are fundamental for the industry's future.

2. R&D and innovation imperative

The insights from the CXO survey emphasize the need to establish a robust innovation ecosystem as one of the most pressing needs to make progress in the innovation of novel therapies. Securing investments continues to be a significant hurdle, given the substantial financial commitment required over a period of several years and the inherent high risk of failure.

As a result, 48% leaders think it’s important to have increased financing, such as seed funding for start-ups/BioTechs and patient funding from private equity partners.

3. Towards Indian CRDMO market dominance

The future of India's CRDMO industry hinges on several pivotal themes, as revealed in the CXO survey. 80% experts unanimously agreed that while enactment of the US BIOSECURE Act could open a new window of opportunity, the Indian industry must elevate its scale and efficiency to match global leaders.

60% CXOs said specific focus is required to build scale and infrastructure in the biologics space to capture the large market that would open up with the upcoming patent expiry of some of the big blockbusters. 80% think it is important to invest in advanced manufacturing tech, e.g., continuous manufacturing for cost-efficiencies and speed. 

4. Quality milestones transforming pharma for future

The collective insights from industry experts outline the importance of a robust quality culture, enhancing detection mechanisms, and striving for global quality standards.

63% CXOs highlighted the need for a single global product standard, which would not only improve the quality of pharmaceuticals, but also streamline manufacturing processes and elevate compliance levels. 50% said that culture of quality and compliance is critical to maintaining high standards, and this should be driven by the top. There should be transparency in all reporting.

Experts also emphasized the importance of mandatory quality standards for all MSMEs and small pharmaceutical manufacturers, claiming this would help strengthen the industry’s foundation. Digitalization and automation were called out as the way forward to ensure data integrity and compliance. 

5. Elevating healthcare: Key strategies for affordability and access

The CXO survey found that technology and digital integration are key to addressing healthcare affordability and accessibility challenges. 75% emphasized the need for ‘new financing models and patient education’. ‘Innovative financing mechanisms and healthcare delivery models’ was called out by 38% leaders as the second most crucial elements needed to close the gap between the current state and the desired state of healthcare. 38% also feel it is important to put patient at the center of all healthcare initiatives, by ensuring they are informed and engaged in all decision-making processes. 

6. Nurturing talent for pharma innovation and leadership

Highlighting the availability of a skilled talent pool as a critical concern, 67% CXOs said there is limited talent with deep knowledge about sector. 50% highlighted that graduates, including those with bachelor’s and master’s degrees, frequently lack the hands-on experience that is critical for success in the pharmaceutical sector.

With fewer students entering scientific fields, there is an urgent need for initiatives that promote careers in science and pharmacy. Experts emphasized the necessity for a shift from producing generalists to cultivating specialists with deep therapeutic area expertise, capable of managing niche therapies and personalized medicines.

Digitally enabled healthcare: Bridging gaps, building connections and improving outcomes

The insights from industry experts on digital healthcare in India further underscored the critical role of digital in transforming healthcare delivery and enhancing the patient outcomes. Some of the use cases shared by experts included the potential of digital health in revolutionizing last-mile delivery, making healthcare accessible even in the most remote areas. Experts also advocated for a sustained emphasis on the successful adoption of Ayushman Bharat Digital Mission and the implementation of policies that mandate and enable digital adoption across both public and private healthcare sectors. 

Notes to Editors

About EY Parthenon

With over 6,500 EY Parthenon professionals and 750+ partners across the globe, EY Parthenon is one of the largest strategy consultancies in the world. EY-P help CEOs and business leaders design and deliver transformative strategies across the entire enterprise, to help build long-term value to all stakeholders. With a result-oriented approach, EY-P teams bring experience and scale to each client, helping them to realize their strategies. By connecting teams and technologies from within EY-P and the broader EY ecosystem, EY-P can provide clients with corporate, transaction and turnaround strategies that are actionable and impactful and that help deliver long-term, sustainable value.

Whether it’s digital transformation, sector convergence and dislocation, or financial and operational complexities, EY-P teams bring data analytics, leading technology, and digital capabilities to a CEO’s toughest strategic issues. In doing so, EY Parthenon teams can move quickly from idea to implementation to help clients realize their strategy with speed and certainty; we call this Strategy Realized.

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About OPPI:

The Organisation of Pharmaceutical Producers of India (OPPI) established in 1965, represents the research-based global pharmaceutical companies in India. OPPI has been an integral part of the healthcare journey of the country. We remain committed to supporting the nation’s healthcare objectives, putting patients at the core of all decision making and collaborating with all stakeholders to find sustainable solutions to realize the collective vision of Health for All.

Our member companies have been serving the country’s healthcare ecosystem since pre-independence and continue to remain committed to patient safety and providing quality care in the future as well. As an association, our advocacy decisions, patient commitment, and work are always keeping the country first and we embody the spirit of working for ‘Bharat Ke Liye’; driven by innovation to find solutions for unmet medical needs, collaboration with government stakeholders, and co-creation with partners coming together to address the nation’s healthcare challenges. We are committed to the Hon’ble Prime Minister Shri Narendra Modi ji’s clarion call of ‘Jai Vigyan and Jai Anusandhan’.