Indian pharma has come a long way from its roots in small-scale traditional medicine, and the industry is only set to continue its ascent. As technology continues to evolve and India’s manufacturing sector flourishes, companies like Dr. Reddy’s Laboratories are looking to expand globally and reach new markets, using innovative solutions and services to keep them on the cutting edge of their industry. In this article, we take a look at some of the ways that technology can be used to drive growth in the Indian pharma industry and how it could change how companies go about doing business in the future. The New Wave of Indian Pharma: How Technology is Driving Innovation and Growth
The United States, India and China
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India exports most of its generic drugs to these two countries, which consume almost 60% of India’s pharmaceuticals. As per U.S. FDA data, India’s exports to America reached $1.24 billion in 2012, whereas China was at $127 million in 2013. The U.S., however, is not India’s biggest market; it ranks third behind Germany and Japan at $732 million in 2011-12, according to provisional data from Confederation of Indian Industry (CII). This makes sense as Germany has a large Indian diaspora who need affordable drugs.
Patent Expiry in India
India, once considered a backwater for drugmakers, has long been synonymous with cheap generics. But as international patents on lucrative drugs continue to expire, innovators at home are stepping in with new products that could steal market share from multinational companies. The move has led to explosive growth in India’s pharmaceuticals sector over the past two decades.
India’s annual output of active pharmaceutical ingredients (APIs) increased 250 percent between 2000 and 2011. With US-based drugs such as Lyrica now available in low-cost generic versions, industry watchers say much more room exists for growth on a still-large local market that represents only 10 percent of global sales but also accounts for 60 percent of Asia’s demand.
India’s fast-growing pharmaceutical industry has been historically slow to adopt technology. However, that’s starting to change as healthcare providers adapt to new technologies in everything from inventory management to customer service. Despite tight budgets, some companies are investing in technology to provide a better overall experience for their customers – but it comes with challenges too. No matter what kind of business you operate, keep reading to see how technology can improve operations and increase your bottom line. If you can identify ways that technology can help your company grow, then it’s worth looking into developing these technologies or finding an existing solution on which you can piggyback… not all tech investments need to be big ones. Here are a few examples of how some innovative businesses across industries have used different technological approaches
Key Challenges Facing Indian Pharmaceutical Manufacturers
India has a booming pharmaceutical industry, in large part due to their large supply of highly-skilled labor. India’s strengths, however, are also its weaknesses. The sector must deal with overburdened customs clearance processes for both finished products and ingredients, lengthy bureaucratic procedures for new drug registrations, poor infrastructure and an outdated distribution system.
A particularly challenging issue is that most manufacturers do not own or operate their own manufacturing facilities; instead they purchase from contract manufacturers who may be located thousands of miles away. This requires frequent shipments between multiple parties while providing little flexibility to remedy problems or quickly change supplier capacity to meet demand fluctuations. This results in higher shipping costs than most Western pharmaceutical manufacturers face as well as lower inventory turns.
In an effort to reduce costs, many western pharmaceutical companies have been outsourcing production to countries with lower labor costs, such as India. These companies have formed partnerships with local manufacturers who produce medicines based on their specifications. While outsourcing has become a cost-effective way for western pharmaceutical companies to develop drugs without incurring high R&D costs, it has also given rise to major concerns about product quality. While there is little evidence that western consumers are being harmed by these drugs, they remain apprehensive. It’s safe to say that in order for outsourced pharmaceuticals to continue growing as a market force it will be necessary for both sides—western and eastern manufacturers—to strengthen relationships between themselves as well as government regulatory agencies like FDA. Read More…
Government Regulations & Policies
The Government of India (GOI) has enacted a few policies which have paved way for new innovations in technology. Key among them are- Make in India, Digital India, Start-up India and Atal Innovation Mission (AIM). All these initiatives aim to achieve greater innovation and development throughout India in different areas like Manufacturing, IT & ITeS etc. The GOI recognizes that Advanced Technologies will have huge impact on jobs creation. For example : Start-up Policy aims to create 100 Startup Funded Incubators across all states by 2017 with an estimated funding support worth INR 100 crore. It also aims to build Brand India by partnering with 20 incubators from overseas including UK, Germany, Japan and Singapore.
Import Duties in India
Prescription drugs are import-sensitive items, meaning that India imposes a range of duties on them to protect domestic pharmaceutical companies. Imported generics typically pay about 4 percent in import duties, for example. However, protected drugs—drugs that have been patented domestically—face much higher fees. Local drugmakers can charge a royalty fee to import these drugs, which are referred to as evergreened drugs because they never fall off patent. But an importing company has no access to those fees. Instead, it must compete directly with local generics firms or other importers who do have access to such fees from local firms. This can result in significant trade barriers for imported goods in India’s drug market. [Source]