India’s economy has been in a state of decline for some time now. Like other industries, the healthcare industry has ailed its drawbacks. The 50% hike in raw material prices imported from china has struck several sector-specific CEOs. This led to declining margins and doubts about long-term viability. The money paid by companies for bulk drugs and the market price of the product is both fixed by the regulators.
However, slim margins hinder the possibility of modernizing and upgrading the manufacturing capabilities and capacities of the regulators as they have little to no incentives thereby declining margins. As companies cannot compete on a global level and do not put money in R&D they are not able to produce breakthrough high margin drugs. This has placed the Indian pharma sector on a lower stand globally. The increasing pressure has raised the bar for introducing new drug applicants in the market from about $1.1billion in 2010 to more than $2.1billion in 2018. Moreover, half the drugs fail the second and third phases of the drug development cycle because of insufficient safety measures and the absence of required efficacy.
With the use of artificial intelligence there a chance that the drug failure rate can be reduced by 20%. Following recent trends, the pharma industry has begun embracing the analytics, mobile, cloud and the Internet of Things (IoT). There are areas for change that are only possible if the very functioning of the industry is re-evaluated.