Mr. Nikkhil K Masurkar, CEO, Entod Pharmaceuticals
India is a significant player in the global pharmaceutical sector and is home to more than 10,000 pharmaceutical manufacturing facilities. According to data from US Pharmacopeia, the nation produces the majority of the world’s active ingredients for generic drugs, accounts for more than 60 per cent of the world’s vaccines and is the source of over 90 per cent of the medications used in the US.
Consequently, the nation has an ambitious goal to increase the value of the pharmaceutical industry to $130 billion by 2030. As per a report by Acute Market Reports, the Indian pharmaceutical industry was worth $42 billion in 2020 and will grow at a CAGR of 12% from 2020 to 2030. However, though the Indian pharmaceutical industry is the 3rd largest in terms of volume, it ranks only 14th in terms of value. Given India’s G20 Presidency, the key to success in the future will depend on increased industry-academia collaboration, regulatory simplification and strengthening innovation mindset. India must strengthen its value proposition in the face of fierce cost pressures and competition to facilitate rapid growth. It is obvious that India needs to make a big transformation from being a manufacturer of generic drugs to a producer of new compounds and biosimilars through rigorous R&D initiatives to spur the predicted growth.
Tech-Enabled Approach is the Need of the Hour
In order to preserve and improve their market position, Indian pharmaceutical businesses must place a high priority on technology. All new pharmaceutical facilities must adhere to the standards set by the WHO, the FDA and the Pharmaceutical Inspection Co-operation Scheme.
Modern technologies are essential for advancing India’s pharmaceutical manufacturing sector since they can enable several significant process improvements such as:
- Virtual product design reduces research time by allowing products to be built, tested, or evaluated virtually without using physical prototypes.
- Strong tracking systems adjust production on their own to lower logistics failures.
- Data interchange can be enabled from design to production and supplier/customer integration through intelligent sensors and a connected value chain.
- To increase performance, autonomous robots can offer flexible and adaptive production lines for a variety of models and small customised lots.
- Downtime can be reduced and maintenance can be improved through predictive maintenance linking wirelessly to the cloud for Big Data and analytics.
Pharmaceutical businesses that consistently accept new technology, figure out how to use it, and support business integration are the ones most likely to have a competitive advantage in the Indian pharmaceutical manufacturing sector.
Building R&D Capabilities
To build robust R&D capabilities it is important to have educational institutions which are committed to nurturing world-class researchers as well as a strong IP structure and funds to attract investment incentives and research.
India only has 216.2 researchers per million people, compared to 1200 in China, 4300 in the US, and 7100 in South Korea, according to the Brookings analysis. With the New Education Policy of 2020, the Indian government has demonstrated its desire to stop the brain drain. This is undoubtedly a significant step toward improving the academic ecosystem, but more needs to be done to encourage academia to develop learning environments and curriculum that result in talent that is industry-ready and able to start working right away.
Funding is another critical issue. India now has one of the lowest rates of GDP investment in R&D at 0.7 per cent. Countries with continuously higher investments include Israel (4.6%), South Korea (4.5%), Germany (3%) and Brazil (1.3%). While the talent pipeline expands, the biologics-fuelled pharmaceutical ecosystem needs significant additional investment in facilities to deliver a step change in capacity and capabilities. Even while private investment is increasing, it might not be enough for the top 10 Indian pharmaceutical businesses (7.8 per cent) to equal half the amount spent by the top ten global pharmaceutical companies (16.5 per cent) on R&D, as a percentage of their revenue.
Way Forward
The Indian government has been actively collaborating with pharmaceutical firms and allocating large sums of money for the development of new pharmaceutical facilities, pharmaceutical research, healthcare programmes, and other initiatives. These initiatives open up brand-new avenues for the use of technology that will significantly increase manufacturing efficiency. However, while technologies like cloud AI are widely used in the U.S. and Europe, modern pharmaceutical manufacturing in India is still in its infancy. Cost sensitivity must be taken into consideration as a primary aspect because labour costs in India are lower than those in other nations. AI and ML are being used by pharmaceutical businesses, but they are still in the proof-of-concept phase. India is just beginning to use blockchain technology for open data exchange between suppliers and contractors. In India, skill and labour are not major problems, but volatile prices and rules prevent industry growth.
For the Indian pharmaceutical industry to meet international standards, working with the government to create an inviting ecosystem, a helpful education system, a legal and regulatory environment in line with best practices and consistent research funding would be essential. An inflexion point has been offered by the pandemic. It is time to refocus efforts and gather momentum to promote pharmaceutical innovation and transform the sector from a volume supplier to a value creator for India.
