Future Prospects for the Indian Pharma Sector - An Expert Overview

Having completed his Corporate Finance degree from Harvard University and Drug Development degree from University of Oxford, Saransh has been associated with Venus Remedies for over seven years now and has incepted three firms - Spine Software Systems, Commerce Engine and Davai - The Pharma Market. In a recent conversation with Siliconindia, Saransh Chaudhary, President - Global Critical Care, Venus Remedies give us a brief, yet insightful overview of the Indian pharma industry this year so far, and discussed its future prospects entering the New Year. Below are the excerpts from the exclusive interview

How has the pharma industry fared in 2023, especially from an Indian standpoint?

2023 has been extremely fruitful for us, wherein the Indian pharmaceutical industry experienced significant growth of around five percent increase in its market size, reaching approximately $49.78 billion. This success can be largely attributed to the Indian government’s emphasis on innovation and technological advancement. A key strategy has been shifting from focusing solely on generic drugs to including more value-based products, supported by increased R&D efforts. Financial support, such as the 5,000 crore research-linked incentive scheme and the establishment of Centres of Excellence in partnership with the Indian Council of Medical Research, is expected to further enhance the industry’s potential. These initiatives are anticipated to elevate the Indian pharmaceutical sector, making it more research-oriented and advancing its position in the global market.

The production-linked incentive scheme is also likely to further catalyse growth, particularly in high-value products across the global supply chain. According to the Frost & Sullivan report on the Union Budget for 2023-2024, India is anticipated to attract a substantial investment of $419.2 million in pharmaceutical R&D during the current fiscal. This underscores not only the industry’s growth, but also its attractiveness to global investors. Furthermore, the six priority areas identified by the government for promotion of research-new chemical entities, complex generics, precision medicine, medical devices, orphan drugs and drug development for antimicrobial resistance (AMR)-has widened the scope for growth of the Indian pharmaceutical industry.

What were some of the major concerns for pharma organizations while entering 2023, and how is the scenario now?

High input costs, especially the cost of procuring active pharmaceutical ingredients (APIs) from China, was a major concern as we entered FY23. But the situation has eased a bit now. Lack of incentives for R&D-based pharma companies was another area of concern. However, this situation has also improved considerably with the announcement of the Research-Linked Incentive scheme and the move to make facilities of Indian Council of Medical Research labs available for private sector R&D. High GST rate, on the other hand, is still a major issue, but we are expecting it to be addressed in the upcoming Budget.

According to you, what are the two most significant happenings for the pharma industry in 2023?

While there were quiet of few such encouraging aspects for the Indian pharma industry this year, two most striking highlights stand-out. First is the emphasis on advanced digital technologies like artificial intelligence, data analytics and automation, driven by the digital revolution and Pharma 4.0. Second is the significant traction that generic drugs are gaining, bolstered by government initiatives. The Union Health Ministry has done well by supporting SMEs through the Pharmaceuticals Technology Upgradation Assistance Scheme and creating a conducive environment for research and innovation. The increase in use of generics, backed by government schemes like Jan Aushadhi and the recent push for encouraging doctors to prescribe generic medicines, is expected to bring down their cost by intensifying competition among pharmaceutical companies, thus contributing to the avowed objective of ‘Affordable Healthcare for All’.

Going forward into the New Year, how do you expect modern-day technologies to shape the pharma sector?

Modern-day technologies, especially advanced digital tools like artificial intelligence, data analytics, Internet of Things and automation will enhance efficiencies & competitiveness in manufacturing & research, and streamline supply chain management & marketing operations. The data-driven approach will enable companies to make informed decisions and fuel innovation, thus reducing the time it takes for a product to move from concept to delivery. While artificial intelligence can sift through vast datasets to identify patterns, make predictive insights and improve workforce productivity, IoT devices can optimize manufacturing processes in terms of both quality and volumes by facilitating monitoring. Coming to supply chain management, these advanced technologies will help digitize processes for better tracking and traceability, thus eliminating counterfeit drugs from the market.

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