Indian pharma sector set for 'volume to value leadership' journey in 2023

New Delhi: Reinvent and innovate will be the key mantra for the Indian pharma industry in the New Year as the 'pharmacy of the world' looks to move from volume to value leadership, amid emerging challenges of inflation and pricing pressures in the global markets. While R&D investment, market competitiveness, regulatory scrutiny, and domestic price regulations are expected to shape the growth of generics and injectable products, concerns such as price control and customs duties on medical equipment will continue to bother the healthcare industry in 2023.

The industry believes that in view of India's G20 Presidency, digital health innovation, achieving universal health coverage, improving healthcare infrastructure and delivery will continue to be the key driving factors in 2023.

The domestic pharmaceutical industry needs to keep upgrading its manufacturing capabilities while also harmonising regulatory requirements to match global standards as it marches ahead to touch the $130 billion-mark in value terms by 2030, according to industry players. Indian Pharmaceutical Alliance (IPA) Secretary General Sudarshan Jain said that in 2022 despite geopolitical issues, India continued to supply medicines globally, living up to its reputation as the 'pharmacy of the world'.

"As the industry expands its footprint across the world, it will need to continuously invest in upgrading manufacturing standards to keep its promise of being a high-quality, reliable supplier of medicines to the world. The key to success, going forward, will depend on regulatory simplification, increased industry-academia collaboration, and strengthening innovation mindset," he said. This will set the stage for the sector to move from 'volume' to 'value' leadership in the coming years, Jain said. IPA is an alliance of 24 leading domestic pharma companies, including Sun Pharma, Dr Reddy's Laboratories, Aurobindo Pharma, Cipla, Lupin and Glenmark. The Organisation of Pharmaceutical Producers of India (OPPI) Director General Vivek Sehgal said that India is poised for a very strong growth in the pharma sector, with another strong decade of yearly double-digit growth anticipated.

"Remaining cautious about the simmering issues from different fronts globally, we must prepare ourselves to address the challenges on R&D investments, and the rising need for Intellectual Property (IP) law and rights while harmonising our regulatory requirements to global standards," Sehgal stated. OPPI represents research-based pharmaceutical companies in India like AstraZeneca, Johnson & Johnson and Merck, among others. Citing the EY-FICCI report, Sehgal noted that the global market size of pharmaceutical products is estimated to cross the $1 trillion-mark in 2023, and India is estimated to touch $130 billion in value terms by the end of 2030. Rating agency ICRA's Assistant Vice President & Sector Head Corporate Sector Ratings MythriMacherla said the domestic pharmaceutical companies are expected to report steady revenue growth of 6-8 per cent in FY2023 and in FY2024.

The revenue increase in FY23 will be supported by healthy growth in the domestic and emerging markets, while pricing pressures in the US and European markets will moderate the growth to a certain extent, she added.