OPPORTUNITY FOR PHARMA SECTOR AMONG COVID CHAOS
Article contributed by Dr. Garima Garg, Principal, Faculty of Pharmacy and Sciences
Bill Gates had correctly predicted in 2015, the greatest threat to humanity was not nuclear missiles, but microbes.
At the time of global health challenge, the role of pharmaceutical industry is of major importance.
India is supplying over 50% of global demand for various vaccines, 40% of generic demand in the United States, 25% of all medicine in United Kingdom and extremely low-cost medicine to African nations. Second, local players have enjoyed a dominant position driven by formulation development capabilities and early investments. Third, price levels are low, driven by intense competition. While India ranks tenth globally in terms of value, it is ranked third in volumes.
According to the Department of Pharmaceuticals (DoP), India is the source of 60,000 generic brands and home to 3,000 pharma companies with a strong network of over 10,500 manufacturing facilities.
COVID-19 pandemic has changed the variables of equations of Indian pharma industry which is emerging as safer bets for investors in the ongoing market turmoil. But the pandemic has raised various new issues for the pharma sector. Among them major challenge is
India’s significant dependence on Chinese Active Pharmaceutical Ingredients(API): According to Bloomberg, 70% of India’s imports of APIs come from China, totaling $2.4 billion of India’s $3.56 billion in import spending for those products each year
Made-in-India drugs supplied to developed economies are known for their safety and quality. In recent years, India has seen increasing competition from China, which it has been able to leverage due to its inherent cost advantage, manufacturing intermediates and APIs at a cost much lower than those in India.
Prime Minister Narendra Modi in his address to public emphasized the need to strengthen ‘Make in India’ movement and urged “Indians should become vocal for local products”. Fortunately, in response to the COVID-19 crisis, India’s Union Cabinet has approved an investment package worth $1.3 billion to boost the country’s pharma and API production and cut dependence on China. This is a major step in the creation of a self-sufficient healthcare ecosystem in the country.
While this is an obvious opportunity for pharmaceutical companies to backward integrate and start producing APIs and intermediates, it also provides companies in other sectors such as specialty chemicals to enter this sector. For these players to enter, it would be necessary to know the numerous manufacturing steps that convert a naturally-found product into a tablet.
Many companies in the specialty chemicals sector and other chemicals sectors already have the experience in synthesizing large amounts of organic compounds. With a little expansion of their knowledge bank, they can enter this exciting space with assured customers in the form of drug manufacturers. This will not only help pharmaceutical production in India be protected from factors happening in other countries, but also provide many manufacturing jobs to Indian people and bring prosperity to the country.
As country look to give its economy a much-needed stimulus in the aftermath of the COVID-19 outbreak, there is a huge opportunity for the Indian pharmaceutical industry to further stimulate its economic potential.