Let us see the challenges being faced by Indian Pharma Industry currently. As per a recent report by Indian Pharmaceutical Alliance the market has a potential to grow to USD 120 TO 130 Billion by 2030. But there are few factors which seem hindering these great expectations.

Here are the challenges that Indian Pharma Industry is facing today:

  • USFDA Pressure & rising number of Inspections

USFDA inspection news have become a regular for Indian Pharma in recent times. In 2018 Indian Pharma Manufacturing companies faced 174 USFDA INSPECTIONS that amounts to 14% of total FDA inspections conducted around the globe. As per USFDA report India has 12% of the total manufacturing units that supply drugs to US & the ANDA approvals for Indian companies have been on a consistent rise. Due to all this the FDA inspections are bound to happen. Between the year 2013 to 2018 there were a total of 60 Drug GMP Warning Letters Issued out of which 14 were issued in the year 2018. Each warning letter puts an impact on the share market value of Pharma Companies & also the over all image in case of manufacturing quality.

2. Government Control on drug pricing:

The second issue that Indian Pharma is facing today is the stringent control over the pricing of drugs. It is seemingly becoming a hurdle in the innovation capabilities of Pharma companies. If there is not much of the surety of getting the investment back that is already spent on R&D then the pharma companies will hesitate to invest respectable amounts in their R&D departments for drug discovery.

3. Fake Products/Spurious drugs:

Fake drugs constitute 25% of domestic medicines market in India: ASSOCHAM

According to WHO 35% of the world’s spurious drugs are produced in India. “THE SPURIOUS DRUG MENANCE & REMEDY” by Shishir Kant Jain

Around 25% of India’s drugs are fake, counterfeit or substandard. Mentions Wikipedia which is a common source of Information to everyone

& thousands of news bytes you will get… if you search spurious drugs & India.

These headlines do create a general perception that India is growing into a den of spurious or fake drugs. Where India is aspiring to be a superpower, these type of perceptions will surely tarnish the image of Indian Pharma in due course of time.

4. Lack of skilled work force

Every year about 225000 Pharma graduates are added. But there is a skill & knowledge gap between the studies & the actual requirements in the Industry. Although a few Industry supported programmes have been started but they seem to be too minuscule with respect to the overall training requirements of Pharma Industry.

5. India’s significant dependence on China for APIs

Indian Pharma market is heavily dependent on China for its API needs. Currently about 80% of the Indian Pharma Market API requirements are fulfilled by Chinese Pharma Market. Occasionally there is an increase in API pricing due to policy changes & Geo political reasons. For example, to Curb the pollution, China closed many of the API manufacturing units which led to shortage of API supply. Ultimately the prices of APIs were increased.

6. Insurance coverage

In India only 30% of the population is covered under insurance schemes due to which the Out of Pocket expenditure on drugs is too high. Most of the insurance companies only cover IPD charges while OPD charges also are a major part of healthcare cost in Indian healthcare system. Due to this the affordability of drugs is a big issue in India as it leads to low utilization of manufactured drugs in India & impacts the overall sale of drugs.

All these issues need to be addressed & hence many opportunities arise from these challenges…