As per a study by McKinsey and Company, the Indian Pharmaceuticals Market is expected to grow to USD 55 billion by 2020. Volume wise, India will be at the top, a close second only to the US market. According to previous forecasts by Goldman Sachs in 2007, India will be the only emerging economy that can maintain steady growth and outstanding pace over the longer term, ie to 2050. These projections can be attributed to India’s demographic profile and its health services sector. India’s population is over 1.37 billion in 2019 and may rise to 1.6 billion by the year 2050. Its service sector is also expected to remain steady and all these factors add to its growing presence in the world.
Factors Influencing Growth
The patient pool is set to increase by 20 percent by 2020 and there may be growth in the number of diseases as well. The rise in insurance coverage and income growth (GDP levels are growing at nearly 8 percent over the next 10 years) will also lead to the increased affordability of drugs. It is estimated that about 650 million people will enjoy health insurance coverage by 2020. The government insurance schemes may provide coverage to about 380 million people by the year 2020.
Accessibility to medicine and drugs is also set to increase as there has been steady growth in medical infrastructure, greater government spending on healthcare, new business models for Tier-II towns and rural areas and launches of patented products. Over $200 billion is being spent in medical infrastructure, which will grow dramatically in the next decade. In hospitals, there will be an increase in the number of beds, and if supported by skilled staff and healthcare personnel, it can help more patients undergo necessary treatments in India.
Rural and Tier 2 towns will see increased accessibility to drugs, and patented products are expected to drive major growth in some markets. Government spending is also set to increase and will create a USD 4.5 billion segment of pharmaceutical products. Both the government and the private sector will spend more on healthcare, which will drive growth in the pharma industry. The Rashtriya Swasthya Bima Yojana, a government scheme is set to cover 75 percent of the BPL population, and the government spending will increase to 1.5 percent GDP. Rising affordability and accessibility are the two main drivers that will drive about 70 percent of the $42 billion market opportunity while increased acceptability will account for another 25 percent. All these factors will contribute to the continued growth in the Pharma Market in a growing economy like India.