India - the Pharmacy Capital of the World

X

Register for CAT 2021 & MBA Admissions Updates

close

MBA/PGDM ADMISSION 2022 ALERT 
Check Admission Status of Top B-schools & Apply Now

B-school  Application Status Last Date
SPJIMR Mumbai Open | Apply Now November 26
MICA Ahmedabad Open | Apply Now January 16
IMI New Delhi Open | Apply Now December 13
Great Lakes Chennai Open | Apply Now December 05
GIM Goa Open | Apply Now December 06
TAPMI Manipal Open | Apply Now December 11
LBSIM Delhi Open | Apply Now Closing soon
SDA Bocconi Asia Center Open | Apply Now Closing soon

India is often termed as the Pharmacy of the World. However, given the rise of Corona Virus Wave 2, from the ‘pharmacy of the world’ to the ‘epicentre of the coronavirus pandemic’, India’s fall has been dramatic. In the GD Topic, MBAUniverse.com explores how India became a global Pharma giant, and what it needs to do to maintain its position.  

MBA/PGDM Admissions 2022 Open | Apply Now
LBSIM Delhi PGDM Admission 2022

Let’s start with some numbers that prove India’s global stature.

  1. Indian pharmaceutical sector supplies over 50% of the global demand for various vaccines, 40% of the generic demand for US and 25% of all medicines for UK.
  2. India contributes the second largest share of pharmaceutical and biotech workforce in the world.
  3. India’s domestic pharmaceutical market turnover reached Rs. 1.4 lakh crore (US$ 20.03 billion) in 2019, up 9.8% y-o-y from Rs. 1.29 lakh crore (US$ 18.12 billion) in 2018. In May 2020, pharmaceutical sales grew 9% y-o-y to Rs. 10,342 crore (US$ 1.47 billion).
  4. Indian drugs are exported to more than 200 countries in the world, with US being the key market. Generic drugs account for 20% of the global export in terms of volume, making the country the largest provider of generic medicines globally.
  5. The Indian pharmaceutical exports, including bulk drugs, intermediates, drug formulations, biologicals, Ayush & herbal products and surgical, reached US$ 16.28 billion in FY20. As of October 2020, India exported pharmaceuticals worth US$ 13.87 billion in FY21.
  6. Pharmaceutical exports from India stood at US$ 16.28 billion in FY20 and US$ 2.07 billion in October 2020.
  7. Medical devices industry in India has been growing 15.2% annually and is expected to reach US$ 8.16 billion by 2020 and US$ 25 billion by 2025.

Government’s Pharma Vision
The Union Cabinet has given its nod for the amendment of existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100% under the automatic route for manufacturing of medical devices subject to certain conditions.

 

The drugs and pharmaceuticals sector attracted cumulative FDI inflow worth US$ 16.86 billion between April 2000 and September 2020 according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT).

 

Some of the recent developments/investments in the Indian pharmaceutical sector are as follows:

  1. In December 2020, Piramal Pharma Solutions announced plans to invest Rs. 235 crore (US$ 32 million) to expand its facility in Michigan, US, with additional capacity and new capabilities for development and manufacturing of active pharmaceutical ingredients (APIs).
  2. In November 2020, Indian Immunologicals (IIL) commenced work on Rs. 75 crore (US$ 10.17 million) viral antigen manufacturing facility in Genome Valley, Telangana, that will enhance its vaccine production capacity by 35% by October 2021.
  3. In November 2020, the Indian Institute of Technology (IIT) Bombay has stepped up research and development (R&D) amid COVID-19 and researchers are developing products such as a portable sterilisation device and germicidal cabinet; wheeled sterilisation unit, especially for hospitals; portable and rechargeable car sanitiser; eco-friendly sprays, and alcohol-free and bleach-free sanitisers.
  4. In October 2020, six generic drug makers--Dr. Reddy’s Laboratories, Zydus Cadila, Glenmark Pharmaceuticals, Torrent Pharmaceuticals, Hetero Drugs and Ackerman Pharma signed a deal with Hidalgo,a state in Mexico, to establish a large pharmaceutical cluster for production and logistics in Mexico.
  5. In October 2020, Aurobindo Pharma acquired MViyeS Pharma Ventures for Rs. 274.22 crore (US$ 37.30 million).
  6. In May 2020, Jubilant Generics Ltd entered into a non-exclusive licencing agreement with US-based Gilead Sciences Inc to manufacture and sell the potential COVID-19 drug Remdesivir in 127 countries, including India.
  7. Affordable medicines under Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) achieved record sales turnover of Rs 52 crore (US$ 7.38 million) in the month of April 2020.
  8. During December 2019, on moving annual total (MAT) basis, industry growth was at 9.8%, with price growth at 5.3%, new product growth at 2.7%, while volume growth at 2% y-o-y.
  9. In October 2019, Telangana Government proposed Hyderabad Pharma City with financial assistance from the Central government of Rs 3,418 crore (US$ 489 million).
  10. In September 2020, the government announced production linked incentive (PLI) scheme for the pharmaceutical industry worth Rs. 15,000 crore (US$ 2.04 billion).
  11. Under Budget 2020-21, Rs. 65,012 crore (US$ 9.30 billion) has been allocated to the Ministry of Health and Family Welfare is. The Government has allocated Rs. 34,115 crore (US$ 4.88 billion) towards the National Health Mission under which rural and urban people will get benefited.
  12. Government of India unveiled 'Pharma Vision 2020' to make India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investment.

Indeed, above achievements are commendable for Indian pharma sector. However, there has been criticism too. 

 

From the ‘pharmacy of the world’ to the ‘epicentre of the coronavirus pandemic’,

From the ‘pharmacy of the world’ to the ‘epicentre of the coronavirus pandemic’, India’s fall has been swift and dramatic. Newspapers across the world have criticised India as the second wave of the pandemic unfolds.

 

During the first wave in 2020, India was better off than countries such as Italy, the United States, and Brazil. India’s handling of the pandemic in 2020 won praise and was a pleasant surprise. Thanks partly to a strict lockdown and perhaps because of its demographic advantage, India managed much better than even developed countries. India played true to its strength as the ‘pharmacy of the world’, sending medicines and vaccines to many countries, thus winning goodwill and praise globally.

 

However, the second wave of the pandemic in 2021 has caught India unawares. The epic proportion of the tragedy has affected India’s international reputation at several levels.

 

First, the second wave has exposed the limitations of our health infrastructure (the result of years of inadequate allocation by successive governments), raising questions about the domestic capabilities. India spends just over 1 percent of its GDP on public health, a far cry from the 16 percent spent by the US and 10 percent by Japan, Canada, France, Germany, and Switzerland.

 

Second, questions are being asked about the advisability of sending vaccines and medicines abroad without ensuring domestic supplies first. Third, with India putting restrictions on exports of vaccines and medicines, other countries may face shortfalls in their supplies and could accuse India of being an undependable supplier. German Chancellor Angela Merkel’s rather un-empathetic statement that the European Union ‘allowed’ India to become such a large pharmaceutical producer and her concern about what could happen if supplies do not reach the West reflects the unhappiness of countries which have relied on Indian supplies.

 

Finally, the longest-term damage to India’s reputation will depend on how badly the pandemic affects India’s economy and its potential to provide basic needs to its populace. If it fails to do this, it could say goodbye to its dreams of becoming the next great power. India has already had to accept assistance from abroad despite its 2004 policy of not taking such help.

 

But some positives amidst all this. Perhaps, it is India’s generosity which has led to the outpouring of help from so many countries with leaders like the US President Joe Biden tweeting that “India was there for us, and we will be there for them” recalling India’s generosity to the US when it was facing a crisis.

 

The pandemic should teach India a valuable lesson: the absolute necessity to prioritise its needs and become the pharmacy capital of the world – which we are truly capable of becoming.

 

Stay tuned to MBAUniverse.com for latest GD Topics on Current Affairs and more