Unlocking India's Pharma Potential An Insight into Two Game-Changing Policies
Dr. Manisha Verma
India's pharmaceutical sector, often referred to as the 'Pharmacy of the World,' is at a critical juncture of transformation. With the potential for exponential growth, this sector is poised to significantly impact the country's economy. To harness this potential and bolster its global standing, India's pharmaceutical landscape is set to be reshaped by two pivotal policies- the National Policy on Research and Development in Pharma-MedTech Sector and the Scheme for Promotion of Research and Innovation in Pharma-MedTech Sector (PRIP).
The need for these policies is deeply rooted in the sector's role on the global stage. India is the world's third-largest pharmaceutical industry by volume, with forecasts projecting it could expand to USD 120-130 billion in the next decade, contributing significantly to the nation's GDP. However, to fully realise this potential, the Indian pharmaceutical sector must embrace research and innovation, not only to meet global demands for affordable medicines and vaccines but also to leapfrog into a new era of discovery.
In this article, we delve into the intricacies of these policies, exploring their significance, key features, and the profound impact they are poised to have on India's pharmaceutical landscape.
Why is India Referred to as 'Pharmacy of the World'
India is a major global supplier of low-cost vaccines, manufacturing 60% of the world's vaccines. It plays a vital role in the supply of vaccines like DPT, BCG, and Measles, meeting up to 70% of WHO's demand for Diphtheria, Tetanus, Pertussis (DPT), and Bacillus Calmette-Guérin (BCG) vaccines. Furthermore, India caters to 90% of the global demand for the measles vaccine.
The country is also the leading provider of generic medicines worldwide, contributing to 20% of the global supply by volume. With around 60,000 different generic brands across 60 therapeutic categories, India exports pharmaceuticals to over 200 countries. Notably, it fulfills over 50% of Africa's generic drug requirements, nearly 40% of the generic drug demand in the US, and about 25% of all medicines in the UK. India boasts the highest number of US-FDA compliant Pharma plants outside the USA, with more than 3,000 pharma companies and over 10,500 manufacturing facilities, supported by a highly skilled workforce.
The pharmaceutical industry's major segments include generic drugs, bulk drugs, vaccines, Over-The-Counter (OTC) medicines, biosimilars, and biologics. Additionally, there are 500 Active Pharmaceutical Ingredient (API) manufacturers, contributing around 8% to the global API Industry.
According to the FICCI Report on the Indian pharma industry (2021), the sector has demonstrated a Compounded Annual Growth Rate (CAGR) of approximately 11% in the domestic market, while exports have grown by 16% over the past two decades. The domestic market's growth has been on par with the gross domestic product (GDP), with the industry's supply of generic formulations to global markets driving overall growth.
The pharmaceutical sector is a significant contributor to India's foreign trade surplus, with total pharmaceutical exports reaching USD 25.26 billion in 2022-23. It is also an attractive destination for foreign investors, ranking among the top ten sectors for foreign investment in India, accounting for about 3.3% of total Foreign Direct Investment (FDI) inflows. The pharmaceutical sector allows 100% FDI under the automatic route for greenfield pharmaceuticals, with 74% permitted automatically and the remaining 26% through government approval.
Importance of R&D and Innovation in Pharmaceuticals
The global pharmaceutical sector has witnessed remarkable growth over the past decade, driven significantly by enhanced research and innovation. Innovations in various clinical and non-clinical aspects have been crucial in fueling this worldwide expansion. Sustained and continued research is imperative to meet growing and unmet needs while adding value to the pharmaceutical sector.
Post-COVID, the pace of innovation has accelerated, covering uncharted territories. Technologies such as 'big data and analytics' are expected to play a pivotal role in driving advancements in the sector. Machine learning, AI-powered drug discovery, personalised medicines, digital patient engagement, gadget-driven treatment approaches, a more prominent role for medical devices, and nano drug-driven clinical solutions are poised to provide a competitive edge to manufacturers, leading to significant breakthroughs. Drug re-purposing is another innovative approach that can revolutionise the pharmaceutical market, as seen during the COVID-19 pandemic.
In addition to these innovations, there is a growing focus on encouraging private investments and exploring alternative funding avenues for high-risk and long-term projects. Promoting collaboration between industry and academia, along with the development of innovative models to enhance drug affordability as an alternative to price control, upgrading manufacturing facilities, and optimising the supply chain through technology, automation, and digital interventions, have all been identified as critical pillars for fostering robust growth in the sector.
Prime Minister Shri Narendra Modi has emphasised the significance of India's pharmaceutical industry as an "asset for the entire world." He highlighted that "vaccines made in India are responsible for two-thirds of the vaccine needs of the world's children." Recognising the importance of research and innovation, he added "Jai Anusandhan" to the slogans of "Jai Jawan, Jai Kisan" during his speech on India's 76th Independence Day.
NITI Aayog has also pointed out India's need to catch up in R&D in various sectors compared to other countries. To tap into the abundant opportunities and address this gap, the Parliament recently approved the Anusandhan National Research Foundation (NRF) Bill, 2023. The NRF is set to become the apex national body, providing strategic direction for research, innovation, and entrepr-eneurship in various fields, including natural sciences, engineering and technology, environmental and earth sciences, health and agriculture, and scientific and technological interfaces of humanities and social sciences.
National Policy on R&D in Pharma-MedTech Sector
Recognising the importance of research and innovation in the pharmaceutical and medical devices sectors, the Department of Pharma-ceuticals, Government of India, estab-lished a high-level inter-departmental committee. The committee's task was to draft and finalise the 'Policy to Catalyse R&D and Innovation in the Pharma MedTech Sector in India,' and it submitted its report in September 2020. Subsequently, this policy has been notified in the Gazette on 18th August 2023.
The policy focuses on three key areas:
1. Creating a regulatory environment that promotes innovation and research in product development, expanding beyond traditional regulatory objectives of safety and quality.
2. Incentivising private and public investments in innovation through a combination of fiscal and non-fiscal measures.
3. Building an enabling ecosystem to support innovation and cross-sectoral research, providing a robust institutional foundation for sustainable sector growth.
To foster collaboration among industry, academia, and research institutions and encourage domestic and international cooperation in R&D in the Pharma MedTech sectors, the establishment of an Indian Council of Pharmaceuticals and Med-tech Research and Development is proposed.
The implementation of the policy is expected to enhance drug security and availability, improve the overall healthcare index, reduce the disease burden, increase GDP contribution, boost exports and forex inflow, expand the global market share, create high-end jobs in R&D and Innovation, and attract Indian talent with expertise in these domains.
PRIP (Promotion of Research and Innovation in Pharma MedTech Sector)
A substantial portion of Indian exports comprises low-value generic drugs, while the demand for patented drugs heavily relies on imports. To encourage both global and domestic players to invest in high-value production, a well-designed intervention is essential to promote high-value products such as biopharmaceuticals, complex generic drugs, patented drugs, and medical devices.
In response to this need, the Department of Pharmaceuticals introduced the PRIP (Promotion of Research and Innovation in Pharma MedTech Sector) scheme with a budget allocation of Rs. 5000 crores. The scheme aims to shift the Indian pharmaceutical sector from a cost-based to an innovation-based growth model by strengthening the research infrastructure in the country. It also seeks to promote collaboration between industry and academia in priority areas and nurture a culture of quality research, ultimately leading to sustained global competitive advantage and contributing to quality employment generation.
The scheme comprises two components:
1. Strengthening the research infrastructure: This involves establishing seven Centers of Excellence (CoE) at the National Institute of Pharmaceutical Education and Research (NIPER) with a financial allocation of Rs. 700 crores. These CoEs will focus on pre-identified areas, creating a world-class research atmosphere and cultivating a talent pool of qualified, trained students.
2. Promoting research in priority areas: The scheme encourages research in six priority areas, including new chemical entities, complex generics (including biosimilars), medical devices, stem cell therapy, orphan drugs, and antimicrobial resistance. It provides financial assistance to industries, MSMEs, SMEs, startups collaborating with government institutes, and supporting both in-house and academic research. This component has a financial allocation of Rs. 4,250 crores.
The scheme envisions several benefits:
1. Development of research infrastructure: The scheme will help establish a world-class research environment at NIPERs and other institutes and contribute to building a pool of qualified and trained students.
2. Promotion of industry-academia linkages: By facilitating collaboration between the private sector and government institutes, the scheme promotes a robust partnership.
3. Focus on priority areas: The scheme concentrates on specific priority areas that have the potential to elevate India's pharma industry and strengthen its position in the world market.
4. Launch of commercially viable products: The scheme is expected to lead to the development of products that are commercially viable, accelerating the growth of the Indian pharmaceutical sector, increasing revenue, and creating employment opportunities.
5. Development of affordable health-care solutions: By focusing on primary areas of health concern, the scheme aims to develop accessible and affordable solutions, thus reducing the healthcare burden.
These initiatives represent a significant step towards transforming the pharmaceutical sector in India, with the goal of making the country a global leader in drug discovery and innovative medical technologies. The comprehensive approach addresses various aspects of the industry, from research and development to innovation, and has the potential to further strengthen India's position on the global stage.
(The Author is Addl. Director General, M/o Chemicals and Fertilizers, Government of India. Feedback on this article can be sent to feedback.employmentnews@gmail.com)
Views expressed are personal.