Ever since the economic reforms of 1991, the domestic pharma industry has grown by leaps and bounds
The 75th Independence Day holds a lot of significance for the pharmaceutical industry in India. Over the past few decades since India’s Independence, the industry has witnessed immense growth and emerged as one of the leading providers of drugs/medicines to countries worldwide.
From being non-existent in the 1970s to supplying crucial drugs to more than 200 countries in the fight against the pandemic, the Indian pharmaceutical industry has shown its prowess in its commitment to better health of people across the globe. With the government’s strong push towards an ‘Atmanirbhar Bharat’, several initiatives both at the business and policy levels have been implemented to propel the pharmaceutical industry towards further heights.
Presently, the Indian pharma industry caters to more than 60 per cent of the global demand for different vaccines as well as ARV drug supplies, 30 per cent of UNICEF’s annual supply worldwide and almost 60-80 per cent of UN purchases of medicines come from India.
Additionally, India also contributes nearly 57 per cent of APIs and 69 per cent of FPP (Finished Pharma Products) to the WHO's Pre-Qualified list. Furthermore, about 40 per cent of generics drug requirements in the US are met by India. All this is possible due to various initiatives that were taken to boost the domestic pharmaceutical industry. Here’s a look at the significant ones that aided in the strong growth of the industry:
The Patent Act, 1970
This was the first patent act introduced after India became independent. It made the way for process patents and restricted patenting of end-products, which enabled manufacturers to develop alternative processes for proprietary products that were already there in the market.
The Drug Policy, 1978
The introduction of this policy along with the Price Control Order of 1979 turned out to be landmark events for the pharmaceutical industry in India. It not only enabled the setting up of a National Drug Authority but also provided a ‘directional push’ to the sector. The policy aimed at increasing the local production of bulk drugs, providing leadership to the PSUs, reducing imports of bulk drugs, encouraging the growth of the local industry and reducing the selling prices of important drugs along with their formulations.
Hatch-Waxman Act 1984
Even though this Act was passed in the US, it helped in the proliferation of generic drugs and assisted a lot in the growth of the Indian generic industry. The Act established the economic and legal foundation for the present-day generic pharmaceutical industry.
The 1991 economic reforms
The Indian government in 1991 launched some major economic reforms and entered the world of globalisation. The economic reforms helped in market liberalisation, linking the Indian pharmaceutical industry with the world economy. It also ensured the end of the ‘License-Raj’, which allowed the pharma industry to enjoy more freedom in the market. This created more leverage for domestic players and allowed market competition to produce better products.By liberalising the economy, the government increased business opportunities in the country. As a result, a number of entrepreneurs seized the opportunities and grew their pharma business from a small firm to a big company. Ever since the inception of these reforms, the domestic pharma industry has grown by leaps and bounds and currently exports medicines and drugs worth $19 billion throughout the world.
Recently, the Cabinet also approved two schemes, namely the Production Linked Incentive (PLI) scheme and the scheme on Promotion of Bulk Drug Parks, to promote domestic manufacturing of critical key starting materials/drug intermediates and APIs (Active Pharmaceutical Ingredients) in India.
The government has plans to develop three mega bulk drug parks in India in partnership with states. A sum of Rs 3,000 crore has been approved for this scheme for the next five years. Under the PLI scheme, financial incentives will be provided to eligible producers of identified 53 critical bulk drugs on their incremental sales over the base year (2019-20) for a period of six years.
The scheme will reduce the country's import dependence for critical KSMs/Drug Intermediates and APIs.
Conclusion
In the recent past, digitisation has also emerged as a key
driver for the pharmaceutical industry, helping to deliver top-quality and hyper-personalized customer experiences and also improving business resilience and performance. Without any doubt, digitisation will play an active role in driving agility across the pharmaceutical value chain by bringing the sector closer to patients and doctors.
Most importantly, the pharma industry must work towards further innovation, by manufacturing effective new medicines/ drugs for emerging and unmet healthcare needs. Steps like these will enable the industry to transform into an innovation hub for the future.
(The author is CEO, Entod Pharmaceuticals.)
