Prescription for Pharma

    10-Jun-2021
Total Views |
India’s pharma sector needs to upgrade itself and move up in the value chain with production of more innovative drugs and participate in new drug discoveries
 
-Prof Vijay Kumar Kaul
 
 
a_1  H x W: 0 x
In 1969, India was producing just 5 per cent of its drug consumption while by 2020, the share of Indian companies in manufacturing drugs for domestic consumption has increased to 80 per cent
The COVID-19 pandemic has exposed weaknesses of the Indian healthcare system and its pharmaceutical industry. It has also highlighted the opportunities that by strengthening its healthcare ecosystem and industry, India can provide good healthcare, and safety to its people as well as create a lot of employment opportunities and revive the economy. Being the second-most populous country in the world and aspiring to be the world power, India needs to take care of the health and safety of its population more seriously.
 
The second wave of the COVID-19 has a devastating impact on the economy and the lives of people. It has shown the importance of basic medical oxygen, critical drugs, health infrastructure, and health professionals and workers. The pandemic and virus are challenges not only just in the short to medium term, but they are also linked with the future challenges of biowarfare and bioterrorism. All these along with the growing communicable and non-communicable diseases highlight the importance of robust healthcare infrastructure and agile healthcare ecosystem which includes the innovative pharmaceutical and life sciences industry. India has shown time and again that its planners work efficiently and seriously during crisis time. Let us use this present crisis to strengthen our healthcare ecosystem and pharmaceutical and life science innovation system thereby creating employment and economic growth.
 
Present Status
 
India is known as the pharmacy of the world with large network of 10,500 pharmaceutical manufacturing facilities. On the other hand, it is known for the weakness of its healthcare infrastructure and shortages of healthcare professionals and workers in comparison to the World Health Organization recommendation per 1,000 people.
 
The importance of the Indian pharmaceutical sector is well known as it is contributing world’s 20 per cent of the generic market and 62 per cent of the global demand for vaccines. The size of the industry is around $42 billion (in 2020) with an equal contribution from the domestic and export market. In the year 1969, India was producing just 5 per cent of its drug consumption, as 95 per cent was produced by multinational companies. By the year 2020, the share of Indian companies in manufacturing drugs for domestic consumption has increased to 80 per cent. The sector has provided employment directly and indirectly to around 2.7 million people. India ranks third in the world in term of production of drugs in terms of volume, that is 10% of the global production. However, in terms of the value of drug manufacturing, India has 14th position globally. This shows that the Indian industry needs to move up the value chain with more investment in R&D.
 
Challenges
 
The COVID-19 pandemic has affected economies across the world. Global GDP is constantly shrinking. India has also witnessed a decline in its GDP in the year 2020. India is expected to register positive growth in the year 2021. However, the recent cases of the second wave and lockdowns and talk of the third wave has created a glooming picture.
 
The rapid spread of the virus challenged healthcare systems globally. From the US that spends the world’s largest share on its healthcare system to the world’s most sophisticated European healthcare systems, every country is struggling to manage and contain its spread. Developing countries are facing serious challenges. All these have, however, highlighted that the first priority of all the countries is to have an equitable and sustainable healthcare system.
 
In addition to health challenges and economic consequences, geopolitical issues may also have a far-reaching impact on the post-COVID-19 world. The US and China bilateral dynamics have continued for more than two years and have only intensified after COVID-19 started. Many other countries such as India, Vietnam, Malaysia, Indonesia, and Japan have experienced conflict with China due to respective legacy pending disputes.
 
The geopolitical shift in the world with the emergence of China and the concentration of the global supply chain in East Asia and China is also a challenge. For instance, the overdependence on China for active pharmaceutical ingredients (APIs) is a concern for quite some time now in India as well as in the US and Europe. The disruption in the supply chain due to coronavirus and lockdowns has highlighted the fragile nature of globalisation. Different countries are exploring the way to reshoring, relocating and diversifying their supply chain of essential commodities and medicines, etc.
 
We also need to focus more on research and innovation to develop innovative drugs and vaccines to meet future challenges. This requires a need to support quality research institutions in the country, provide skilling and upskilling to the talent pool of scientists, researchers, and technologists, and enhance collaboration between stakeholders and academics  
One positive thing now in India is the availability of vaccines, which need to be produced at a large scale to vaccinate all the people in the country. As more and more companies are coming up to produce vaccines, it is expected that India will be able to vaccinate its people by December 2021. The global patent regime is a challenge. During the pandemic and global health crisis, the patent regime needs to be changed. There is an urgent need that WTO should pass a resolution with the help of all the country to waive temporarily the patent, trade secret, copyrights and industrial design etc on the vaccine for the sake of humanity.
 
The Road Ahead
 
The only solution to the challenges India facing is an efficient and agile healthcare system and innovative pharmaceutical and life science industry. In a recent study, four pillars of the robust and innovative healthcare system have been suggested. These are: accelerating research and innovation, achieving sustainable and equitable healthcare, strengthening manufacturing and supply chain, and improving access to medicines. All four aspects are important. However, there is a need to elaborate focus on research and innovation. As we noted India’s rank in the total global value of the drug is 14 as its contribution is just 1.4 per cent of the global value of drugs. It highlights the need to upgrade itself and move up in the value chain with the production of more innovative drugs and participate in new drug discovery to get higher value for its products.
 
Moreover, India has a large population. We cannot depend on other countries for our health and safety needs. We should produce all the drugs and essential items in the country. The AtamNirbhar Bharat mission is aimed at this. The government has provided several incentives to support manufacturing. However, we also need to focus more on research and innovation to develop innovative drugs and vaccines to meet future challenges. This requires a need to support quality research institutions in the country, provide skilling and upskilling to the talent pool of scientists, researchers, and technologists, and enhance collaboration between stakeholders and academics. There is a need to maintain a positive operative environment for R&D investment and risk-taking to thrive. There is a need to look at the next-generation capabilities and invest in the future.
 
(The writer is a Senior Professor in the Department of Finance and Business Economics, University of Delhi)