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An Overview of the Indian Pharmaceutical Industry

An Overview of the Indian Pharmaceutical Industry2018.10.12

Sized at USD 39.5 billion in FY16, the Indian pharmaceutical industry has contributed significantly to global healthcare by ensuring high quality, affordable and accessible medicines around the world.


 India is also a major exporter of pharmaceuticals to more than 200 countries with US, Europe and Africa accounting for more than 50% of India’s exports of pharmaceuticals. It supplies 50-60% of global demand for many vaccines, 40% of generics in the US and 25% of all the medicines dispensed in the UK. Besides, 60% of global ARV drugs and 30% of the annual UNICEF requirements are supplied by India.


On the aspects of the major chemicals, 70% of them are used for acute illness and the other 30% for chronic illness. Generic drugs account for about 75% of the total domestic market for pharmaceuticals. Currently, Anti-infective drugs command the largest share of the Indian pharma market, followed by Cardio vascular & Gastro-intestinal, Respiratory and Vitamins & Minerals. The top 5 segments contribute to nearly 57% of the entire market in 2016. 


Though India is the third largest pharmaceutical market in the world by volume, the industry has faced several challenges which have impacted the growth. Globally, several factors have had severe impact on export business. These include higher level of customer consolidation, increased competition & number of products approvals, decreased value form new product launches and increased pricing control & protectionism.
 
However, the industry still has grown in value with an average annual growth rate of 6-7% over the last 5 years. And the Indian government has undertaken several policy initiatives for the growth of the pharmaceutical business in India. Some of the  measures adopted include rationalization of taxes, providing incentives for setting up manufacturing units through special economic zones and other facilities, providing incentives for higher in-house research and development and improving quality of healthcare infrastructure and availability of medicines at affordable prices.


In a nutshell, the Indian pharmaceutical industry must face various challenges in the next few years, it also has many opportunities and will continue to play a vital role in manufacturing various critical, high-quality and low-cost medicines for Indian and global markets.  


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