Can India be the Pharmaceutical Hub of the World?
Kedar Upadhye, Group CFO, Cipla writes about the role of pharmaceutical companies in the overall growth of the economy.
Healthcare (including pharma) will play a significant role in helping the economy in its pursuit of becoming a ‘healthy’ US $5 Trillion economy by fiscal 2025. As per the World Bank data, India’s current healthcare expenditure as percentage of GDP remains significantly lower than the World average at 3.66%.Nearly 65% of the healthcare spend is still out-of-pocket (vs World average of less than 19%) with government share at ~25% (when the world average is over 74%). These macro statistics clearly point out the opportunity to expand access, increase market penetration and drive India towards a healthier economy. The prevalence of lifestyle diseases is substantially increasing which is a matter of concern and signifies the need to act fast and promote access. We need to work towards creating an environment of strong collaboration between government and private enterprises to drive growth in the healthcare sector. Some of the recent steps taken by the Central government such as Ayushman Bharat are in the same spirit.
Indian pharmaceutical companies have created strong R&D, manufacturing and commercial capabilities to drive growth both in the domestic market and in exports. Indian pharmaceutical supplies today dominate the world market (including a significant share in the US pharma market) with products manufactured in India serving patients across the globe. In fact, Indian pharmaceutical companies have helped governments and patients across the world save billions of dollars in healthcare costs by providing access to affordable and high quality medicines. Manufacturing plants in India get inspected by global regulatory bodies such as US FDA (United States Food and Drug Administration), EMA (European Medicines Agency), among others, which reflects the high standards of quality established by large Indian pharma players. With support from the government on policy, India can establish itself as pharmaceutical manufacturing and export hub of the world.
Pharmaceutical companies in India have also played a significant role in executing ‘Make in India’, supporting the economy through direct and indirect employment. On the domestic side, Indian companies continue to dominate the market and have been driving access to medicines in interiors of the country. To further bolster the growth prospects, companies are expecting strong support from the government to operate under stable policy regime, incentivization for R&D and manufacturing investments, among other reforms.
Government’s investments in expanding the footprint of public healthcare infrastructure can help expand access to life saving medicines across the country. With increased access, it will also become extremely important to ensure that the drugs entering the pharma supply chain are of high quality and required efficacy. This would require investments towards building a strong regulatory body to inspect plants and ensure compliance to cGMP (current Good Manufacturing Practices) standards.
Overall, Indian pharma, with required policy and investment support, can help drive expansion of access to life-saving medicines across the country. At the same time, help India become a global pharmaceutical exports hub achieve its US $5 trillion economy milestone.
Opinions expressed in the article are the author’s own.