Narendra Modi has rightly said that India is the pharmacy of the world. Generic pharmaceuticals are primarily imported from India. India is home to the largest pharmacy in the world.
India is one of the world's leading exporters of vaccines, and it has excellent R&D resources and highly trained workers.
Throughout the COVID-19 pandemic, the world's supply of pharmaceuticals was still largely dependent on Indian vaccine and pharmaceutical manufacturers.
It is estimated that 65% of children globally have received at least one vaccine produced in India.
More than half of the world's demand for various immunizations is met by it, as are 40% of generic drug demands in the US and 25% of all medical requirements in the UK.
According to Ella, India's pharmaceutical business has experienced a substantial expansion in domestic and international markets over the past 50 years, contributing to improving public health by providing accessible healthcare.
The largest pharmaceutical company in India by market capitalization is Sun Pharma, which has a value of 198,484 crores (almost $25 billion). It ranks as the world's fourth-largest specialty generic pharmaceutical company.
Indian medications began to be imported into 133 nations by the year 2012; they were more affordable than medications from other nations, and the quality was unaffected. India consequently began to be referred to as the "Pharmacy of the world."
The YoY sales growth of the Indian pharmaceutical sector
Over the past ten years, generic medicine prices have significantly eroded due to pricing pressure in the US and Europe and the rapid growth of companies providing rival generic drugs in other nations.
17 Since 2008, generic prescription prices have dropped by more than 70% in the US, according to the Prescription Price Index, which tracks changes in consumer pricing for a fixed basket of widely used medications.
Issues with regulatory compliance: India exports 50% of its goods to highly regulated countries, and in recent years, regulators have called attention to quality control and production slippage problems. From 42 in 2015 to 127 in 2018, the FDA issued more warning letters than double that amount.
The July 2017 implementation of the Indian Goods and Service Tax (GST), a new domestic tax system, led to higher manufacturing costs, sluggish inventory turnover, and lower profit margins. As a result, industry growth was just 5.5% in 2017 before increasing to 9.4% in 2018.
The number of new pharmaceutical products launched in India fell from 3,505 in 2011 to 3,150 in 2018 (a 10% decline), partly as a result of the prohibition on fixed-dose combination (FDC) medications. Additionally, fewer new acute treatment items were introduced due to pricing limitations implemented by the Indian National Pharmaceutical Pricing Authority and competing products (NPPA).
Domestic price controls: The 2012 revision to the NPPA's drug pricing system determines a drug's ceiling price by averaging the costs of all brands with more than 1% of the market share in that category. The NPPA had set price caps on more than 1,000 medications by March 201923, and businesses reduced the manufacturing of medicines subject to these price limitations.
The price of formulated medications increases directly to the cost of APIs, which is on the rise. Prices for APIs imported into India from China, and other nations have increased by 15% to 80% over the past two years (depending on the active ingredient). API imports' rising costs negatively impact pharma's profit margins.
The first Indian pharmaceutical company was founded in 1901 and started doing business in Calcutta (now Kolkata). After that, there were four separate periods:
1911–1970: Before 1970, the Indian Patents and Design Act, which recognized both product and process patents, served as the foundation for the patent system. Only a few native companies were present during this time, and foreign firms dominated the market.
1970–1995: New suggestions and adjustments to the 1911 Act were made by the Government's Patents Act of 1970. Because product patents were not recognized by this new Patents Act, the patenting system was limited to manufacturing. Domestic pharmaceutical firms were also able to reverse-engineer the production of pharmaceuticals without having to pay royalties to the owners of the original patents.
As a result, between 1970-1971 and 1980-1981, the number of patents granted decreased by 75%. Additionally, the Drug Price Control Order of 1979 put a cap on the overall revenues of pharmaceutical corporations. A burgeoning generic medicines business was created during this time due to a dramatic increase in local pharmaceutical companies (from 2,000 in 1970 to 24,000 in 1995). Additionally, it caused a significant flight of overseas pharmaceutical firms.
1995–2005: As more Indian pharmaceutical businesses entered the export market, the experience gained by concentrating manufacturing on generic medications allowed them to increase their capabilities and gain a global presence. The 1991 economic liberalization of India, which allowed for the opening of the economy to privatization and globalization, contributed to the acceleration of pharmaceutical export growth during this time.
2005-2018:The 2005 Patents (Amendment) Act eliminated the system of process patents and instituted product patents. This blocked Indian pharmaceutical firms from creating generic versions of these medications while their patents were still in effect, luring foreign pharmaceutical firms back to India. In this post-process patent paradigm, Indian pharmaceutical companies began investing more in research and development (R&D) to compete with their foreign counterparts. Some companies created new molecules, while others formed R&D joint ventures with international pharmaceutical firms.
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