Sectoral Analysis: Pharma
The pharmaceutical sector has undergone significant transformation in recent years in India, which now ranks third globally in pharmaceutical production by volume. The Indian pharmaceutical industry has grown with a CAGR of 9.43 percent over the past nine years. India is home to the largest number of USFDA-compliant pharmaceutical manufacturing facilities outside the US and has around 500 API (Active Pharmaceutical Ingredient) producers, contributing approximately 8 percent of the global API market.
India also fulfils over 50 percent of the world’s demand for various vaccines, supplies 40 percent of the generic demand in the USA and provides 25 percent of all medicines in the UK. With a robust network of approximately 3,000 drug companies and 10,500 manufacturing units, India holds a prominent position in the global pharmaceutical landscape. The Indian pharmaceutical market is projected to reach ~US$ 130 billion by 2030 and could grow to US$ 450 billion by 2047.
Strength Analysis of Indian Pharma Sector
India has a vast network of over 10,500 manufacturing units and around 3,000 pharmaceutical companies, enabling a diverse range of products. The country has a competitive edge in production costs, allowing for affordable drug manufacturing without compromising quality. A significant number of Indian pharma companies comply with international regulatory standards, making them eligible for global markets.
Weaknesses Analysis of Indian Pharma Sector
The incidents of quality control failures have raised concerns about the reliability of some manufacturers. Also, the sector has historically emphasised generics over original drug development, which may hinder long-term growth and market diversification. Illegally manufactured, diverted, counterfeit, or adulterated products are quickly exposed to the black market and distribution networks.
Opportunities Analysis of Indian Pharma Sector
The increasing healthcare needs worldwide, particularly in emerging markets, present opportunities for expansion and export of Indian pharmaceuticals. Also, the rise of biotechnology and personalised medicine opens new avenues for research and product development while the growing trend of online pharmacies and telemedicine can enhance distribution channels and access to medicines.
Threat Analysis of Indian Pharma Sector
The global pharmaceutical market is highly competitive which is leading to pricing pressures and the stringent regulations and compliance requirements in international markets do pose challenges for Indian manufacturers. The concerns regarding patent infringement and intellectual property rights can also affect innovation and market entry for new products.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.