Irrespective of the global scenario, the Indian pharma sector has been seeing a steady growth rate. As per an industry report, the Indian pharma market is the third largest in terms of volume and 13th largest in terms of value. It accounts for 20% in volume terms and 1.4% in value terms of the global pharma industry. Over 50% of India’s sales comes from exports, which is a sizeable figure. India is the largest provider of generic drugs globally with the Indian generics accounting for 20% of global exports in terms of volume. In fact, the Indian pharma industry, which is expected to grow over 15% per annum between 2015 and 2020, will even outperform the global pharma industry, which is set to grow at an annual rate of 5 per cent between the same period.

Despite the sparkling numbers going in its favor, the pharma industry is looking at a slowdown. A recent research showed that the sector’s growth slowed to a seven-quarter low between April and June this year. This has been slowest in the past seven quarters and one of the lowest in the past five years. The reasons can be many, such as delayed monsoon in the country and low incidences of infections, thereby lowering the growth of certain drugs. Effect of GST can still be felt by the sector in terms of low inventory stocking. Indian companies are also opening up to build a credible biopharma portfolio that also requires them to invest heavily in R&D. This is also driving up the costs for these companies. There are also pricing pressures from the US and Europe markets that aren’t helping our exports. 

But why are we looking at a slowed-down growth in a sector that has been shining bright in the past decade or so? One word – quality. Of the 12,000 manufacturing units in India, only 25% of them are WHO’s good manufacturing compliant (GMP). There are only a handful of nationally accredited laboratories in India. Regulatory scrutiny of our manufacturing units by US FDA is a roadblock the industry faces that needs to be addressed.

This being said, the future of the industry looks promising. The Indian pharma industry, with its expected growth rate of over 15% per annum between 2015 and 2020, will outperform the global pharma industry, which is set to grow at an annual rate of 5%. The market is expected to grow to $ 55 billion by 2020, thereby emerging as the sixth largest pharma market globally by absolute size. 

How can this be tackled? By addressing the crucial 4Cs that engulf Indian pharma sector – cost, compliance, competition and China.