November 05, 2023
9 mins read
ENGLISH
Have you ever wondered why India is often referred to as the ‘Pharmacy of the World’? It’s a title we’ve rightfully earned. To put things into perspective, imagine this: nearly 20% of the world’s generic medicines, both in terms of volume and value, come from our shores. That’s a substantial contribution. This achievement isn’t just a statistic; it reflects the dedication, innovation, and strength of our pharmaceutical sector. In this blog, we’ll have a deeper insight into the history, the present dynamics, and the bright future of Pharmaceuticals Sector in India.
India’s connection with medicine is not something new; it’s deep-rooted and goes way back. Long before the big pharmaceutical names cropped up, our ancestors were already medical pioneers. They gave the world Ayurveda, a holistic approach to health and well-being. Think of it as the grandparent of today’s medicine.
Now, jumping ahead a bit, the 20th century brought about some significant changes. Before the 1970s, most medicines in India were imported or were being produced by international companies that had set up shop here. These foreign brands pretty much had the lion’s share of the market. But, 1970 was a turning point. That year, the Indian government introduced the Patents Act. This law allowed Indian companies to make their own versions of patented drugs, provided they used a different method. So, it was like giving them a recipe but asking them to cook the dish with a twist.
This change was monumental! Local medicine makers now had the opportunity to grow and compete, which meant two important things: Firstly, there was now a race to innovate and find newer, better ways to make medicines. And secondly, since these were home-grown companies, medicines became more affordable for common folks like us. It was a win-win.
The impact of this was huge. India slowly started becoming the ‘Go-To Pharmacy’ for the world. By the early 21st century, about 20% of the medicines used worldwide were coming from India. One in five pills, capsules, or syrups had ‘Made in India’ stamped on them, metaphorically speaking.
Zooming into the present day, our country’s pharmaceutical industry stands like a giant pillar supporting the health of millions, not just here, but globally. Through sheer hard work, innovative thinking, and some smart decisions by policymakers, India has managed to create a legacy in the world of medicine.
| S.No. | Company Name | Market Cap (in Cr) |
| 1. | Sun Pharmaceutical Industries Ltd | ₹ 2,69,313 |
| 2. | Cipla Ltd | ₹ 95,571 |
| 3. | Dr Reddy’s Laboratories Ltd | ₹ 92,406 |
| 4. | Mankind Pharma Ltd | ₹ 70,078 |
| 5. | Torrent Pharmaceuticals Ltd | ₹ 63,536 |
| 6. | Zydus Lifesciences Ltd | ₹ 57,731 |
| 7. | Lupin Ltd | ₹ 53,172 |
| 8. | Aurobindo Pharma Ltd | ₹ 51,257 |
| 9. | Abbott India Ltd | ₹ 48,270 |
| 10. | Alkem Laboratories Ltd | ₹ 42,252 |
Topping the list, Sun Pharma stands tall as an embodiment of India’s pharmaceutical prowess. With multiple FDA-approved sites, it specialises in producing an extensive range of formulations, active pharmaceutical ingredients (APIs), and over-the-counter (OTC) products. A noteworthy achievement of Sun Pharma is its global reach, exporting products to over 100 countries. One of its popular products is the hypertension drug, Olmezest.
Also Read: Sun Pharmaceutical Share Price
Cipla, a brand echoing in many Indian homes, ensures that essential medicines don’t burn a hole in the common man’s pocket. Their strength lies in delivering affordable medications without compromising on quality. They made headlines for producing cost-effective anti-AIDS drugs. One of their widely recognised products is Asthalin, used for respiratory issues.
A name that resonates globally, Dr. Reddy’s doesn’t just confine itself to drug production; it pioneers in research and development too. They have an impressive lineup of APIs, formulations, and biosimilars. Their achievement in launching several first-to-market products is commendable. Nise, a popular pain relief drug, is one of their sought-after products.
Rising from modest beginnings, Mankind Pharma now rubs shoulders with the industry’s giants. They’re known for a vast spectrum of therapeutic drugs that are both high in quality and affordable. Their achievement in reaching rural markets effectively is laudable. Manforce condoms and PregaNews are some of their popular products.
Also Read: Mankind Pharma Q2 Results
A significant player, especially in the cardiac and central nervous system segments, Torrent Pharma has etched its name through rigorous research and top-tier manufacturing. Their facilities are a testament to their commitment to quality. Shelcal, a calcium supplement, is one of their widely used products.
Zydus Lifesciences, with its sincere approach towards innovation, covers a wide range of therapeutic areas. Their manufacturing is diversified, producing everything from generics to novel drug delivery systems. Their development of the world’s first vaccine for the Zika virus is a notable achievement. Sugar-Free, a popular sugar substitute, is one of their widely recognised products.
A name synonymous with global pharmaceutical excellence, Lupin’s manufacturing umbrella covers branded generics, biosimilars, and APIs. They’ve made significant inroads in the anti-TB and cardiovascular drug segments. Their anti-diabetes drug, Gluconorm-G, is quite popular among patients.
Aurobindo Pharma, with its broad portfolio, stands out in producing both oral and injectable generic formulations. Their commitment to producing high-quality medicines has cemented their place in the industry. They’ve been a significant player in the anti-retroviral drugs segment. A popular product from their stable is Amlodac, used to treat hypertension.
A part of the global healthcare titan, Abbott, this firm is unwavering in its mission to improve lives with top-quality medicines. Spanning multiple therapeutic categories, their product line is diverse and trusted. Their nutritional product, Ensure, is a household name, ensuring health across age groups.
Alkem, with its blend of branded generics and generic drugs, is a notable name in the pharmaceutical arena. Their focus on research has yielded several innovative solutions for healthcare challenges. Pan 40, an antacid and digestive tablet, is one of their best-selling products.
In recent times, the pharmaceutical sector in India has been shining brightly and showcasing an impressive performance. The Indian Pharmaceutical Industry covers a wide range of areas. This includes common medicines, large-scale drugs, everyday health products, vaccines, and specialised areas like research partnerships, biosimilars, and biological medicines. But what makes India stand out on the global stage?
Firstly, consider vaccines. India is more than just a provider; it stands as a global leader. The nation produces 60% of vaccines used worldwide. Remarkably, it fulfils 70% of the World Health Organization’s need for Diphtheria, Tetanus, and Pertussis (DPT) and Bacillus Calmette–Guérin (BCG) vaccines. Furthermore, India meets a staggering 90% of the WHO’s requirement for the measles vaccine.
Furthermore, when it comes to generic medicines, India’s role is unparalleled. The nation leads as the world’s largest provider, with a remarkable 20% share in global supply by volume. India crafts around 60,000 distinct generic brands spanning over 60 therapeutic categories. This accounts for a fifth of the worldwide generic medicine supply. Such massive contribution has earned India the well-deserved moniker, “pharmacy of the world.”
India’s commitment to affordable healthcare is evident through initiatives like providing access to low-cost HIV treatment. The blend of cost-effectiveness and top quality has made Indian medicines a global favourite.
Additionally, India’s role in the Active Pharmaceutical Ingredient (API) market can not be overlooked. With over 500 API manufacturers, the country contributes about 8% to the worldwide API industry.
India hosts more than 3,000 pharmaceutical companies. These are backed by a strong network of over 10,500 manufacturing facilities. Add to that the highest number of US-FDA compliant pharma plants outside of the USA, and you begin to understand the vastness and capability of the sector.
The current performance of India’s pharmaceutical industry isn’t just about its impressive numbers or vast segments. It’s about a nation’s capability, and commitment to delivering quality healthcare solutions, both within its borders and beyond. If you’re keen on this industry, whether just as an interested observer or someone thinking of investing, there’s a clear indication of its strength, growth, and global impact.
The prospects for the pharmaceutical sector in India paint a bright picture, filled with numerous opportunities. Today, India’s pharmaceutical industry stands tall with a valuation of $50 Bn. But that’s not where the story ends. Forecasts suggest that by 2024, this figure could climb to an impressive $65 Bn and potentially double to an impressive $130 Bn by 2030.
But it’s not just about the numbers within our borders. India’s footprint in the global pharmaceutical landscape is massive. Did you know that our country serves as a significant pharmaceutical supplier to over 200 countries worldwide? That’s quite a feat! Breaking it down further, India meets over half of Africa’s needs for generic medicines. If we look towards the West, around 40% of the generic medicine demand in the US is fulfilled by Indian companies. In the UK, one out of every four medicines consumed is supplied by India.
India, renowned as the ‘pharmacy of the world’, is projected to strengthen this title in the coming years. The nation’s ability to produce quality medicines at economical prices has already made it a preferred destination for countries worldwide. This unique capability will likely open more doors, especially as the world’s demand for healthcare products continues to surge.
The Indian government is paying close attention to healthcare. They have introduced several plans and rules to support its growth. There’s an expected rise in healthcare infrastructure, with more hospitals and clinics in the coming times, especially in tier-2 and tier-3 cities. As a result, there will be a greater need for medicines, which will greatly help the pharmaceutical sector.
Another aspect to consider is the increasing emphasis on research and development (R&D) in India. The nation’s pharma companies are not just keen on producing existing medicines but are also diving into the arena of innovation. This push for R&D means that in the future, we might see ‘Made in India’ drugs that are not just generic versions, but original formulations created right here on our soil.
Moreover, with technological advancements, there’s a growing inclination towards precision medicine and personalised treatment plans. The Indian pharmaceutical sector, with its adaptability, is well-set to ride this wave. Companies are likely to invest more in understanding patient needs and making medications that cater to individual requirements.
India has a vast pool of talented professionals, scientists, and experts, with a significant number devoted to the medical domain. With the continuous enhancement of education and training, the pharmaceutical sector stands to benefit from this wealth of human resources. This ensures a dynamic, inventive, and progressive future for the industry.
Evergreen Demand: The healthcare industry is evergreen in nature. Irrespective of economic ups and downs, people will always need medicines. This continuous demand ensures a steady market for pharmaceutical products.
Dominant Global Position: India holds a significant place on the global map for its production of generic drugs. As the world’s largest supplier of these medicines, India enjoys a consistent and increasing international demand.
Affordable Manufacturing: In the pharmaceutical world, India stands out because it can make top-quality medicines without heavy costs. This affordability lets Indian firms stand strong against competitors, both here at home and abroad.
Backing from the Government: The Indian government knows how crucial the pharmaceutical field is and provides special support and plans to help it grow. Consequently, various initiatives and policies are in place to boost research, development, and innovation. This supportive environment bodes well for investors.
High Growth Potential: Historically, the pharmaceutical sector in India has showcased impressive growth rates. With advancements in research and a focus on innovation, this growth trajectory is expected to continue, offering attractive returns to investors.
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The ever-increasing global demand for quality medicines and India’s dominance in generic drug production ensures consistent returns in this sector.
Sun Pharma’s vast global presence, extensive product portfolio, and consistent performance make it a favourite among investors, thus driving its market capitalisation higher.
Investing in pharmaceutical stocks can be done through stock market exchanges using a Demat and trading account.
Like all investments, the pharmaceutical sector carries risks, including regulatory changes, patent expiries, and market competition. However, its consistent performance historically balances out these risks.
While all companies on the list have a broad product range, Sun Pharma and Dr Reddy’s Laboratories have notably extensive portfolios catering to multiple therapeutic areas.
Yes. Despite global competition, India’s advantage lies in cost-effective production, making it a preferred choice for many countries sourcing generic drugs.
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