The Indian pharmaceutical industry has emerged as a significant contributor to the global pharmaceutical industry. As per the report by the Federation of Indian Chamber of Commerce and Industries (FICCI), “India is the largest provider of generic drugs globally. Indian pharmaceutical sector industry supplies over 50 per cent of global demand for various vaccines, 40 per cent of generic demand in the US and 25 per cent of all the medicine in the UK. Presently over 80 per cent of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) is supplied by Indian pharmaceutical firms.”
In 2017, the Indian pharmaceutical industry was valued at $33 billion. The industry is expected to grow at a CAGR of 22.4 per cent over 2015–20 to reach $55 billion. India’s pharmaceutical exports stood at $17.27 billion in 2017-18. In 2018-19 these exports are expected to cross $19 billion.
Structure of the Pharmaceutical Industry
The Indian pharmaceutical companies majorly consist of two segments namely API’s (Active Pharmaceutical Ingredients) and formulations. API’s or bulk drugs are raw chemical ingredients which are used to manufacture formulations. Formulations are the end products made to treat different kinds of ailments and these are in the form of tablets, injections, syrups etc. Both bulk drugs and formulations are usually available in both branded and generic forms. Branded products are the ones which are usually invented and patented by that respective company. Generic products are the one exactly like branded pharma products in formulation usage and action. These generic drugs are produced once the patent of the inventor company expires. Generic drugs are much cheaper than branded drugs. 70% of revenue in the Indian pharma industry is from generic drugs.
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