Indian Pharmaceutical Industry Analysis

Do you believe that one day this world will stop consuming medicines that we all rely on for our health?

A world with no medicines! Next to impossible right?

Then why not invest in the great Indian pharma industry that formulates and manufactures these medications and drugs we consume on regular basis?

Today, in this article, we are going to cover everything about the Indian pharmaceutical Industry and discuss some insights about some great pharma companies.

So, without further ado, let’s get started:

Indian Pharmaceutical Industry

India is renowned for producing cheap vaccines and generic medicines and is the world’s largest supplier of generic medicines. 

A generic medicine is a non-branded medication that is more affordable than the original, name-brand medication. 

It usually costs 30-80 percent less than the original medicine even though it contains a similar active pharma ingredient (API).

The Indian pharmaceutical industry has developed exponentially over time into a booming sector that has been expanding for the past nine years, and it is presently ranked 3rd in pharma production by volume. 

Some of the key sectors of the Indian pharmaceutical business include generic drugs, over-the-counter medicines, mass meds, vaccinations, contractual development & production, biopharmaceuticals, and biosimilars.

Contract Research and Manufacturing (CRAMS) which pertains to outsourcing research and manufacturing products is booming in India as the country has high-class facilities that abide by all the rules and regulations and are also cheaper compared to other countries.

India meets more than half of the worldwide demand for pharma products with over 40% of generic needs in the United States, and 25% of total medication in the United Kingdom. 

A chain of 3,000 pharma organizations and 10,500 production facilities makes up the Indian domestic pharma sector. 

As a result, India holds a significant place in the world’s pharmaceutical industry.

Growth of Pharmaceutical Industry in India

The Indian pharmaceutical industry is growing massively, with a CAGR of 9.43%. It is currently valued at $50 billion and is expected to reach $65 billion by 2024.

In FY22 and FY21, Indian medication and pharmaceutical exports were valued at approximately $24.60 billion and $24.44 billion, respectively. In June 2022, Indian pharmaceuticals and medicine exports reached $2,119.08 million. 

From $11.6 billion to $24.6 billion, the Indian pharmaceutical business saw rapid growth in exports between 2014 and 22. Exports are the source of the majority of revenue in the pharmaceutical industry.

Only India has the most pharmaceutical factories that comply with the US Food and Drug Administration (including more than 262 APIs).  

India produces more than 500 distinct APIs and provides 60,000 generic products across 60 therapeutic categories.

With a robust network of more than 10,500 production facilities, the nation is home to more than 3000 pharmaceutical companies.

(Having a US-FDA-compliant pharmaceutical facility is difficult, yet India has the most US-FDA factories.)

Government Initiatives for Pharma Sector Growth

The Indian government is taking significant steps to help grow and dominate the pharmaceutical sector. The following are a few of the government’s measures to support the industry:

The Union Budget for 2022–2023 states:

  • The Ministry of Health has received an allocation of Rs. 83,000 crores ($ 10.86 billion) and Rs. 3,201 crores ($ 419.2 million) for research and development.
  • The “National Health Mission” has been given a budget of Rs. 37,000 crores ($ 4.83 billion).
  • The Pradhan Mantri Swasthya Suraksha Yojana has been given a budget of Rs. 10,000 crores ($1.28 billion).
  • The amount allotted to the Department of AYUSH has risen from 2,970 crores ($ 389 million) to Rs. 3,050 crores ($ 399.4 million).

For the duration of FY 2021–2022 to FY 2025–2026, a total cash allocation of Rs. 500 crores ($ 665.5 million) has been declared in March 2022 for the Strengthening of the Pharmaceutical Industry (SPI) Scheme.

The Centre of Pharmaceuticals launched a PLI scheme to encourage domestic production by establishing greenfield plants with required domestic value added in 4 distinct “Target Segments” with accumulated financing of Rs. 6,940 crores ($ 951.27 million) from Fiscal 2020 to FY30.

 This was developed to obtain self-reliance and reduce dependence on imports of the country’s important bulk drugs.

Top Pharma Companies:

Now that you know everything about the pharma industry, let us discuss some top pharma companies that are underrated for a better understanding:

  1. Alembic Pharmaceuticals limited.

Alembic Pharmaceuticals Ltd. is a major pharmaceutical manufacturer and distributor in India. They deal in specialty and generic drug manufacturing. The company has over 137 abbreviated new drug applications (ANDA). 

This contains data that is submitted to the FDA for the review of a generic drug product. This application does not require any clinical test as it is a generic drug. The company also has over 6 formulation plants and 3 API plants.

2. Sanofi India

Sanofi India is engaged in research and development, manufacturing, and marketing of pharma drugs. 

The firm also develops over-the-counter medication. The company exports its products to 59 countries with Germany, Australia, the United Kingdom, and Russia as the main markets.

3. Glenmark Pharmaceuticals

The company is involved in the research and development of new molecules of both NCE (new chemical entity) and NBE (new biological entity). 

It manufactures and markets pharma products largely. The company has over 145+ ANDAs approved and 100+ pending approval.

Future of Pharmaceutical industry

India’s pharmaceutical sector contributes significantly to the country’s exports and has attractive prospects for investment. 

India is the source of affordable and widely available generic medicines for billions of people worldwide.

The Indian pharmaceutical industry is rapidly expanding and is predicted to be a market leader by 2030.

Covid-19 and pandemics provided the sector a major boost and helped firms grow.

The Indian government is outlining several initiatives to expand the Indian pharmaceutical business and position it as a worldwide leader in exports. 

In recent years, we have also seen a lot of startups emerge in the pharmaceutical sector, indicating that the industry is on the verge of becoming a powerhouse.

Bottom Line:

I hope you found this article informative and interesting. We have tried to cover everything about the pharma industry and its growth in this article.

Make sure you do your research and pick fundamentally growing stocks to invest in the pharma sector. 

We advise you to diversify your portfolio and add pharma sector as it has massive potential to grow.