The Federation of Indian Chambers of Commerce & Industry (FICCI) and KPMG, a global network of professional firms providing Audit, Tax and Advisory services, have jointly recommended the central government to create an overarching regulatory body in collaboration with global bodies for faster approval of drugs and form a task force to reduce India's dependence on pharmaceutical imports.
The firms, in a recently published joint report, issued several recommendations for growth of the Indian pharmaceutical industry. The report recommended that favourable provisions may be developed by the government which would support greater influx of foreign investments and at the same time benefit local pharma and medical device companies.
The report noted that, for instance, currently it is not compulsory for the foreign investor to make a technology transfer, which restricts the development of technological capabilities of local pharma companies.
“Create a central overarching regulatory body, infusing efficiency and effectiveness at governance. Collaborations with global regulatory bodies to build expertise of Indian regulators on new drug approvals. A single end-to-end digital platform that connects different regulatory departments is likely to fast track the drug approval processes. A research linked incentive (RLI) scheme would incentivise risk-taking for carrying out drug discovery research in the country,” the report said.
The report also said that suitable tax incentives by the government for R&D spending would encourage the Indian pharma players to invest more on R&D. Major Indian pharma players may sponsor research in the prominent pharma academic institutions of the country. Secure platforms for seamless sharing of data from different sources such as epidemiological databases, patient registries and historical clinical trial data would significantly aid medical research.
The report also emphasised that a strong healthcare data protection law is much needed to protect the privacy and security of certain health information. Attracting foreign investments Fostering an ecosystem of research and innovation Streamlining the regulatory framework Boosting data privacy and data security.
“India supplies low-cost generic drugs globally, however, nearly 70 per cent of all APIs are imported from China. Any disruption in China’s bulk drugs market has a direct influence on the Indian pharma industry. To overcome this challenge, government can form a taskforce which devises strategies for attaining self-reliance and reduce import dependency for APIs thereby, enhancing the sector’s manufacturing capabilities to move up the value chain,” said the report.
The report further recommended that promoting integration of digitalisation in the pharma units and discussing its benefits among manufacturers will also lead to increased productivity and value generation.
“Promoting setting up of pharma equipment manufacturing plants would help substantially in lowering installation costs, cut down on imports, save time to set up additional facilities and commissioning machinery. Additionally, streamlining temperature-controlled shipping of vaccines, and cold-chain facilities for storage nationwide will enhance exports, reduce losses due to expiry of shelf-life and strengthen overall supply chain capabilities,” the report said.
Over 2.7 million people are employed by the industry either directly or indirectly and contributes about 2 per cent to India’s gross domestic product (GDP). The Indian pharmaceutical industry is likely to reach $130 billion by 2030, growing at a CAGR of 12.3 per cent from $40.8 billion in 2020. The current market size of the pharmaceutical industry in India is estimated to be valued above $50 billion (2020-21) with a growth rate of 10-12 per cent.
“The Indian pharmaceutical industry has demonstrated resilience in its ability to serve the population in India as well as across the globe, ensuring accessibility and most importantly affordability of quality medicines. The COVID-19 pandemic exposed certain systemic gaps in the industry, but it also provided the right impetus to the industry to innovate and move up the pharma value chain,” Vijay Chawla, Partner and Head – Risk Advisory and Head -Life Sciences, KPMG in India, said.
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