There is a sense of optimism in the domestic pharmaceutical industry, as they roll up their sleeves and take some defining steps to move up the value chain. Charting its course through choppy waters of intense global competition, geo-political bottlenecks and quality concerns, the estimated $50 billion industry is taking course-changing steps to fortify its place in the pharmaceutical landscape, with a more specialised basket of products, say industry-insiders.

An industry known for its prominent export footprint, is also seeing much activity in the domestic market, saysVikram Venkateswaran, Partner with Deloitte India. And that comes on the back of improved local consumption and economic growth. But exports also are getting a leg-up, as domestic drugmakers shift from generics to value-driven products and even buy brands abroad, to strengthen their presence, he adds.

Mapping some overarching trends, Venkateswaran says, drugmakers are not shying away from making investments, in superior automated life-sciences plants, for example. And the interest in wellness products has shot up, buoyed by those with the purchasing ability. The pharmaceutical industry is projected to gross $130 billion by 2030.

Other factors fuelling growth include the strategy of international companies to not rely on just a single source for products. On the regulatory front, India being home to the largest number of US Food and Drug Administration-inspected plants, outside of the US, would mean the frequency and depth of the inspections would increase, he points out.

Back home, the industry will see traction on manufacturing initiatives, because of the Centre’s PLI (Production Linked Incentive) schemes to make active pharmaceutical ingredients, bio-pharmaceuticals etc. Meanwhile, drugmakers are also pushing ahead with initiatives to digitise production plants across operations, he added. As personalised medicines and biosimilar products become a larger part of company portfolios, Venkateswaran expects collaborations to increase between industry and public or research institutions in areas like cell therapy and molecular biology.

‘Inflection point’

Looking through a regulatory lens, the industry is at an “inflection point”, as it makes the shift from delivering in volume to value now, says Anil Matai, Director General, Organisation of Pharmaceutical Producers of India (OPPI), a platform largely of multinational drug companies. Conversations are centred on investments, sustaining innovation and holding the industry to higher standards of quality, given the cough syrup incidents reported from other countries. And while it takes times for all of this to come to fruition, the industry veteran says, he is “starting to see action”.

Sudarshan Jain, Secretary General with the Indian Pharmaceutical Alliance (IPA), expects 2024 to be “transformative” for the industry, as multiple initiatives to spur quality manufacturing and research, come together. Jain expects a greater focus on developing skills in frontier technologies like Artificial Intelligence and genomics, for example, and points to harnessing the country’s demographic advantage and entrepreneurial outlook. (IPA is a platform of large domestic drugmakers.)

But there are some overhangs, and a critical one that Venkateswaran red-flags is cybersecurity. It is a discussion point at board levels, he says. State-sponsored and non-State actors could target Indian drug companies — said to be the second largest target after the US, he says, for reasons including IP (intellectual property). This impacts the revenues of companies, and they need to have measures in place to address them, he adds.

Climbing the innovation stairway brings with it long-standing sticky issues including aspects of IP protection. That becomes important for companies investing in research to transition from making “incremental” developments to “disruptive” innovation, says Matai, adding that domestic drugmakers were also investing in pursuing novel products. The idea is not to elbow out generic drugmakers, but striking a balance to keep affordable alternatives also in the marketplace.

Other challenges that need to be streamlined, he says, include clinical trials — getting greater clarity and certainty on the process, so drugs can be brought into the country in line with international timelines, without a delay. And if Covid-19 saw companies on either side of the IP divide collaborating, Matai says, that will be the way forward in the best interest of the country.

“We are there directionally,” and the critical part is to “walk the talk”, so the regulatory infrastructure is strengthened to cope with changing needs of the bio-pharmaceutical and medical devices industry. “We are at the cusp of transformation, and the important thing is to not take the foot off the pedal,” he says, as the general elections come up this year.