Economy
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Health
Pharmaceuticals
Pharmaceutical Industry
Exports
Indian Pharma Industry
Future Outlook
Global Pharma Industry
Domestic Market
API Market
The Pharmaceutical Industry in India - A Thread π§΅
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@unseenvalue
Topics Covered:
1. Introduction
2. Global Pharma Industry
3. Indian Pharma Industry
4. Exports
5. Domestic Market
6. Formulations vs API
7. API Market in India
Like and Retweet for more learnings ππ©Ίππ§ͺ
@unseenvalue
Topics Covered:
1. Introduction
2. Global Pharma Industry
3. Indian Pharma Industry
4. Exports
5. Domestic Market
6. Formulations vs API
7. API Market in India
8. API Growth Drivers
9.China Factor
110. Future Outlook
1. Introduction: India is known as the Pharmacy of the world. The pharma industry in India has grown 10 times over the last 20 years. It is a major contributor to the GDP and helps significantly to reduce the trade deficit
9.China Factor
110. Future Outlook
1. Introduction: India is known as the Pharmacy of the world. The pharma industry in India has grown 10 times over the last 20 years. It is a major contributor to the GDP and helps significantly to reduce the trade deficit
The pharma industry in India contributes more than 20% by volume of the global generics market and 62% of the global demand for vaccines.
2. Global Pharma Industry: The pharmaceutical industry plays a key role in maintaining and enhancing the quality of our lives. The Global Pharmaceutical market was valued at USD ~1.3 Trillion in 2020 with a steady growth rate of 4% CAGR since 2015.
It is expected to grow at a CAGR of 4.5% between 2020 and 2025 including the impact of Covid-19, which has negatively impacted volumes over 4 to 6 months in 2020. The factors driving global medicine spending will be sustained growth in the pharmerging
markets and the consistent launch of high-end specialty innovative products in developed markets. However, slower growth across developed markets due to losses of patent exclusivity for original brands will be an offsetting factor.
3. Indian Pharma Industry: The Indian Pharma industry is made up of companies that make formulations and companies that make APIs and intermediates for them. The Indian Pharmaceuticals market was valued at USD 59 Bn in 2020
The Indian market is expected to grow at around a CAGR of ~10% between 2020 and 2025 fuelled by substantial increase in Indian API domestic consumption.
4. Exports: Indian pharmaceutical industry exported medicines and other goods worth over USD 25 billion in 2020, up from USD 20.7 billion in 2019. In the year of 2019 exports of formulations accounted for 65-68% of the total exports and the share of the same increased in 2020
owing to high exports of drug formulations from India to cure Covid.
Indian pharma manufacturers export nearly half of the pharma production, both in terms of volume and value, to the US, UK, South Africa, Russia and other countries.
Indian pharma manufacturers export nearly half of the pharma production, both in terms of volume and value, to the US, UK, South Africa, Russia and other countries.
However, there remains a significant opportunity, largely untapped across Japan, China, Australia, ASEAN countries, Middle East region, Latin Americas and other African countries
5. Domestic Market:The Indian domestic pharmaceutical market size has reached US$20.3b in 2019 with y-o-y growth of 9.8%. The anti-infective segment is the leading indication with ~14% market share of the total domestic pharma business and continues to witness double digit growth
Other segments that are growing in double digit include diabetes, cardiovascular disease and respiratory.
Formulations vs API: Historically, most of the value created in the pharmaceutical value chain was captured by the formulation manufacturers.
Formulations vs API: Historically, most of the value created in the pharmaceutical value chain was captured by the formulation manufacturers.
But post 2015, due to massive consolidation in the distribution chain in the USA, manufacturers of generic formulations have been suffering. The formulation manufacturers relied heavily on bulk API imports from China and the price erosion in the US markets eroded the bottom line.
On the other hand, with the increased number of formulators in India and the need to reduce dependence on China,domestic API manufacturers flourished.
7.API Market in India: India has a robust API domestic market, with many Indian companies having multiple advantages over Western
7.API Market in India: India has a robust API domestic market, with many Indian companies having multiple advantages over Western
competitors. Our country is on equal footing with Western nations on parameters such as process efficiency and technological capabilities. At present, India has the highest number of US FDA approved plants outside of the USA and holds 46% of total DMFs approved by the US FDA.
8. API Growth Drivers:
Cost advantage: India is a low cost producer of APIs and can provide superior value proposition to pharma companies. This along with our technological expertise and conforming to regulatory standards, makes global companies want to make
Cost advantage: India is a low cost producer of APIs and can provide superior value proposition to pharma companies. This along with our technological expertise and conforming to regulatory standards, makes global companies want to make
Indian manufacturers at least a secondary source for APIs
Government Policy: Post, the pandemic, the government announced the PLI scheme for manufacturing key APIs in India. This has given a significant boost to domestic API producers.
Government Policy: Post, the pandemic, the government announced the PLI scheme for manufacturing key APIs in India. This has given a significant boost to domestic API producers.
9. The China Factor: The recent disruption in Chinese manufacturing due to the power shortage is the latest in a string of issues that China has been facing. Before this, there were other issues like the Covid outbreak, shutdown of chemical plants outside of designated
zones, the blast in the factory in Jiangsu province and the Evergrande debt crisis. Global companies are increasingly seeing China as an unstable link in their supply chain and are looking to shift outsourcing to other countries like India.
10. Future Outlook:Medicine spending in India is projected to grow at 9-12% over the next five years leading to India becoming one of the Top 10 countries in medicine spending.Going forward, the domestic and export sales of companies depend on their ability to align their product
portfolio towards therapies that are expected to grow significantly such as cardiovascular, anti-diabetes, antidepressants and anti-cancers. All in all, the sector is witnessing tremendous tailwinds and is poised to grow significantly over the next decade.
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