Mains Daily Question
May 27, 2023

"If India wants to continue being the pharmacy of the world, then it needs to make its pharmaceutical industry robust, resilient, and responsive”. Elaborate.

Model Answer

Approach:

Introduction: Briefly mention the status of India’s Pharmaceutical industry at the global level and how its robustness, resilience and responsiveness were put to the test during the Covid-19 pandemic.

Body: Bring out the state of India’s pharmaceutical industry & challenges it will face in retaining the tag of pharmacy of the world.

Conclusion: Give a way forward by suggesting the steps that need to be taken.

 

Answer:

Although globally, India ranks 3rd in terms of pharmaceutical production by volume and 14th by value and its current market size is around USD 50 billion but when its robustness, resilience and responsiveness were put to test during the Covid-19 pandemic various challenges which this sector is witnessing were brought to light.

State of Indian Pharma Sector:

  1. India is the largest provider of generic drugs globally:
  • 40% of generic demand in the U.S. and 25% of all medicine in the U.K.
  • Presently, over 80% of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms.
  1. Largest producer of vaccines: The Indian pharmaceutical industry meets over 50% of the global demand for various vaccines.
  2. Fixed dose combination (FDC) drugs are an innovation of India’s national pharmaceutical industry. FDC is being used in the treatment of diseases like HIV, Parkinson’s disease and contraceptive pills.
  3. Growth Potential: According to the Economic Survey 2021, the domestic market is expected to grow three times in the next decade from USD 42 billion in 2021 to USD 65 billion by 2024.

Challenges to India in retaining the tag of pharmacy of the world:

  1. Lack of Capabilities in Innovation Space: India is rich in its manpower and talent but still lags in innovation infrastructure as it has been slow to grow in the innovation space (e.g., new molecular entities, complex generics), due to a limited government-supported research ecosystem. As less than 1% of GDP is spent on R&D while China spends 2.1% of its GDP.
  2. Dependence on other nations for raw materials:- Active Pharmaceutical Ingredients (API), also known as bulk drugs. Indian drug-makers import around 70% of their total bulk drug requirements from China. For example, during the Covid pandemic, India banned API from China to boycott China and became dependent on America but America banned the export of API to India as per their policy of “America First”.
  3. Hostile competition: There is stiff competition from firms in countries like China, Israel and Japan. Hostile and negative lobbying by the big players who frequently accuse Indian firms of violating patent laws.
  4. Quality compliance inquiry: India has undergone the highest number of Food and Drug Administration (FDA) inspections since 2009; therefore, continuous investment in upgrading quality standards will distract the capital away from other areas of development and growth is reduced.
  5. Lack of Stable Pricing and Policy Environment:- Frequent changes in GoI’s Drug Price Control Order discourage the pharma industries from scaling up their production and from undertaking new investments. This was witnessed during the pandemic as well as the government regulated the pharma prices to ensure the availability of life-saving drugs and vaccines to all. 
  6. Scalability: During the pandemic an adequate number of life-saving drugs like remdesivir, and hydroxychloroquine were not made available on time due to a lack of adequate infrastructure facilities like storage facilities.

Steps that need to be taken:

  1. Innovation Hubs to Accelerate Collaboration: There is a need for several at-scale innovation hubs co-locating academia, public R&D centres, industry, start-ups and incubators. In this regard, the GOI organized the first Global Innovation Summit of the pharmaceutical sector in November 2021.
  2. Revival of R&D and public sector API manufacturers is necessary - For example, the Council of Scientific and Industrial Research (CSIR) should be promoted to invest in R&D. To encourage domestic production of APIs and drug intermediaries the government has launched the Production linked incentive (PLI) scheme.
  3. Harnessing global value-chain: Besides the volume share, India now needs to capture value share as well.
  4. Implement the Malshekar committee’s recommendation on drug regulation regarding setting up a National Drug Authority and strengthening the  State Drug Control Organisations.
  5. Provide better Infrastructure facilities:  Government has approved the establishment of three mega ‘Bulk Drug Parks’ to provide common facilities like solvent recovery, effluent treatment, distillation, etc. So, effective implementation of this scheme and the creation of more such bulk parks is required to enhance the robustness of this sector.

In recent times the world is witnessing a rise in zoonotic diseases and as there is an imminent threat of the rise of new diseases on account of climate change, we need to move towards the idea of “one health” along with strengthening our pharma sector by ensuring effective implementation of these above-given suggestions.

Subjects : Current Affairs
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