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Indian pharma must grow at 12% CAGR to be $130 billion in size by 2030

To reach that target from the current $42 billion, the Indian pharmaceutical industry will require to double the last decade's growth rate of 6% to 12%

twitter-logoPB Jayakumar | February 25, 2021 | Updated 19:06 IST
Indian pharma must grow at 12% CAGR to be $130 billion in size by 2030
The pharma industry has grown at a compounded annual growth rate (CAGR) of approximately 13% over the two decades

The Indian pharmaceutical industry has to reinvent and undertake fundamental reforms to achieve the ambitious target of $130 billion in size by 2030, said a EY-FICCI vision report.

To reach that target from the current $42 billion, the Indian pharmaceutical industry will require to double the last decade's growth rate of 6% to 12%. Though the pharma industry has grown at a compounded annual growth rate (CAGR) of approximately 13% over the two decades, in the last decade it was 8.5% and has been lower at 6.2% over the past five years. The overall growth has been driven by the industry's leadership in supplying generic formulations to markets across the globe. In the 2020-2030 period, it is envisaged that the Indian pharma industry will have to grow at a CAGR of 12% to reach $130 billion by 2030 from $41.7 billion in 2020, said the EY FICCI report titled 'Indian Pharmaceutical Industry 2021: future is now.'

India supplies over 40% of generics in the biggest pharma market, the US, and about 25% of the prescription drugs in the UK, along with catering to over 60% of the global vaccine demand. While the global formulations trade value is about $652 billion (2019), India's share of exports in the global trade was only about 2.5%. With increased pricing pressure on the global generics trade as well as increased competition in India's established export corridors, the current portfolio of products is expected to further extend this divide. The global pharmaceutical trade is expected to reach a size of $1-1.3 trillion by 2030, the ambition is to garner a global share of 6-7% by value to attain a size of $73 billion, assessed the report.

Innovation-led research and development, healthcare delivery (R&D), manufacturing and supply chain, and market access are the opportunities that have emerged to accelerate the growth of Indian pharmaceutical and healthcare industry.

Accelerating research and innovation can help to move up India's share of trade in value. To meet this objective, the industry must consider setting up an overarching regulatory body and a central body to streamline research infrastructure and ?nancing from all government bodies. Similarly, exploring new models for ?nancing R&D to increase private investments and also make available funds for high risk and long term projects, improve industry-academia collaboration and establish a strong innovation ecosystem are key to realise the growth.

Achieving equitable and sustainable healthcare with support of digital healthcare infrastructure and enabling teleconsulting and focusing on preventive healthcare are also important. The focus of manufacturing and supply chain initiatives would be to develop capabilities in active pharmaceutical ingredients (API)s and enable the manufacturing of complex generics. Besides attracting talent, it is vital to encourage and set up pharma machine manufacturing facilities in India to lower ?xed costs, enable savings in forex and reduce time to set up additional facilities. There is also a need to bolster the logistics infrastructure for connecting the key pharma hubs in the country in order to facilitate quick and cost ef?cient movement of goods including cold chain facilities. Improving access to medicines and various global best practices in drug pricing and procurement models can be contextualized for developing geographies Digital marketing of pharma products too must be considered, said the report.

Also read: Cabinet approves PLI scheme for pharmaceuticals, to bring Rs 15,000 cr investment

Also read: Indian pharma goes local for APIs, strives to end dependence on China

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