The Indian Pharmaceutical Industry is the largest supplier of cost effective generic medicines to the developed world. With the widest range of medicines available for exports and with the availability of the largest number of approved pharmaceutical manufacturing facilities, India is all set to become the leader of pharmaceutical exports of the world. What drives this development?
The whole industry is predicted to grow to the volume of USD 45 billion in revenue by 2020, in an aggressive case scenario even up to USD 70 billion. The market is attractive for investors as India’s cost of production is significantly lower than that of the USA for example and almost half of that of Europe. Further, a skilled workforce as well as high managerial and technical competence is available in the country plus that economic prosperity is likely to improve affordability for generic drugs in the market.
Also the Government boosts the growth of the Indian Pharmaceutical Industry by for example the project ‘Pharma Vision 2020’ aimed at making India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments. Further, the Government introduced mechanisms, such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines. Along with increasing customer spending, rapid urbanisation and raising healthcare insurance growth is driven this way.
To explore further opportunities of growth, the Indian Pharmaceutical Industry players, particularly the large ones have set up their subsidiary companies, regional offices or taken over local companies in other geographies and many have even set up their manufacturing plants in developed nations too. All these companies have been continuing since the last 10 years particularly which have made the Indian pharmaceutical industry command a strong global presence. Nowadays, India exports to over 200 countries. Pharmaceutical exports clocked a CAGR of 10.3 % to USD 15.5 billion during 2014-2015 from USD 10.4 billion during 2010-2011.
Latin America plays an important role in terms of Indian pharmaceutical exports and holds great potential for growth. In 2015, pharmaceutical exports from India to Latin America crossed the billion-dollar milestone, reaching USD 1.063 million and accounting for 7 % of India’s global pharmaceutical exports. Thereby, Brazil is the largest destination for Indian pharmaceutical exports with USD 374 million, followed by Venezuela with USD 146 million and Mexico with USD 126 million. There is a scope for India to increase exports even further. The Latin American pharmaceutical market is expected to touch USD 100 billion over the next five years. The Governments of the region are promoting generic medicines to cut the cost of healthcare as part of their inclusive development agenda as Latin America has come to realise the value of affordable Indian generic medicines.
So eventually it shows the locational advantage of India in general, not just regarding Latin America: low production costs and hence, the ability to provide affordable Pharmaceutics to a large market.
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