PHARMACEUTICAL SECTOR: Bitter Pill Turns Sweet

The panic created by the virus pandemic has taken a heavy toll on most sectors but pharmaceutical companies seem to have withstood the carnage with some stocks even delivering healthy returns during this period. Join the DSIJ Team to know how the sector has been affected and what lies in store

The Indian pharmaceutical industry is the world’s third-largest drug producer by volume and the country’s market manufactures 60 per cent of vaccines globally. This constitutes 40-70 per cent of supply to satisfy the World Health Organization’s (WHO) demand for Diphtheria, Tetanus and Pertussis (DPT) and Bacillus Calmette Guerin (BCG) vaccines and 90 per cent of the global demand for measles. Along with supplying affordable and low-cost generic drugs to millions of people around the globe, India operates more than 250 US Food and Drug Administration (FDA) and UK Medicine and Healthcare Products Regulatory Agency (MHRA)-approved plants.

Drugs produced in India are exported to more than 200 countries in the world, with the US being the key market. Generic drugs account for 20 per cent of global exports in terms of volume, making the country the largest provider of generic medicines globally and expected to expand even further in the coming years. Pharmaceutical exports from India, which include bulk drugs, intermediates, drug formulations, biologicals, ayush (ayurvedic, yoga and naturopathy, unani, siddha and homeopathy), herbal products and surgical items, reached USD 19.14 billion in FY19 and USD 13.69 billion in FY20, up to January 2020.

This sector is expected to grow to USD 100 billion and the medical device market is expected to grow to USD 25 billion by 2025. Furthermore, the active pharmaceutical ingredients (APIs) market is forecasted to attain revenue of USD 6 billion by the end of 2020.