Call Us Now

+91 9606900005 / 04

For Enquiry

legacyiasacademy@gmail.com

298 viewsAll GS PapersGS Paper 3
on 0 Answers

Approach:

  1. Brief overview of India’s pharma industry.
  2. Challenges & issues.
  3. Mention reasons for import dependence.
  4. Way forward & Conclusion.

The Indian pharmaceutical industry is the world’s 3rd largest by volume and 14th largest in value terms. The total annual turnover was Rs. 2,89,998 crore (2019-20). With more than 15 drugs, exceeding annual global sales of $ 100 billion going of the patent by 2030, is India ready to make & export these ?

Challenges & issues:

  • Drug making involves 8-10 stages, in which India is not being competitive from the initial or intermediate stages.
  • India imports penultimate stage products to make most medicines. This increases the end costs. E.g., in Crocin making, Phenol is an Active Pharma Ingredient (API) and Benzene & Propylene are Key Starting Materials (KSM). APIs and KSMs are penultimate products, which India needs to import.
  • India buys 70% inputs from a single supplier – China. For specific APIs, 90% inputs come from China. In case where India makes APIs or KSMs, intermediates are imported from China.
  • With pharma sector growing well, using imported inputs for enhancing competitiveness is business-worthy, but critical dependence on a single supplier may lead to a hostage situation. India was nearly self-sufficient in pharma inputs in 1990s.

Reason for importing APIs: making APIs needed significant investments but with low returns (10-15%), while drugs making from APIs generated 40-60% value addition. So, most Indian firms opted to import APIs to maximise profits. China with large capacity, R&D investments, and subsidies, started selling intermediaries & APIs at discounted prices. By 2005, India stopped producing fermentation based APIs chemical APIs, solvents, catalysts, etc.

How can India leverage ?: India must go deeper into the pharma value chain for key frontline drugs.

  • Must make inputs for chemical & fermentation-based APIs.
  • Create large pharma parks with pre-approved environment clearances, incentivising plants with continuous processing, solvents making, reagents and fluorinating agents.
  • Invest in creating global standards strain for developing fermentation-based APIs. Poor quality strains have led to closure of most fermentation-based units. These are capital-intensive and need longer incubation period.
  • Mandate similar standards for medicines for the domestic market & exports. India already has over 600 USFDA-approved drugs.
  • Strengthen R&D at all levels, besides, strengthening regulatory oversight.

With these, India can become a self-reliant supplier of affordable medicines.

Download PDF