India – The Next Healthcare Superpower
COVID-19 has spread globally, causing largescale economic destruction and claiming lives. People's livelihood is at stake amid job losses and businesses shutting down. The world over, leaders are blaming China squarely, holding it responsible for not taking the required precautionary measures to prevent the outbreak of the deadly virus, and not issuing adequate warnings globally about the seriousness of the situation.
China is the world's largest exporter of just about everything. In 2018, China exported goods worth USD2.4 trillion. The country is a key supplier of raw materials for industries across sectors and geographies, from automobile and electronic components to active pharmaceutical ingredients (APIs), intermediates, and consumables for the pharmaceutical industry. China had been under the radar for a while due to various reasons such as its autocratic approach to governance, currency pegging, lack of transparency in dealings, quality lapses, and copyright issues. The recent COVID-19 outbreak has strengthened the negative sentiment, with supply chain disruption, due to the shutdown of production in China, creating major challenges for several companies.
Most countries are now looking to de-risk their supply chain by weaning themselves off Chinese suppliers and considering diversifying to other economies that could offer similar benefits. Countries like the US, Japan, Italy, South Korea have announced plans to reduce dependence on China by encouraging domestic production and shifting the manufacturing of some critical inputs to less volatile economies.
What Does This Mean for the Indian Healthcare Sector?
China is the largest supplier of APIs and intermediates, the key inputs for any pharmaceutical product. Due to supply chain disruption and the resultant adverse effect on inventory levels, most pharmaceutical companies globally are struggling to maintain the production of their formulations, especially during the current crisis. Does this present an opportunity that could catapult India to become the largest supplier of these inputs?
India has proven its prowess by ramping up production of the most critical drug in this fight against COVID-19, hydroxychloroquine, and exporting it to countries with requirement. This also indicates its intent for acquiring a certain leadership position. Is India equipped to lead in the race?
In 2019, India exported USD19.14 billion worth pharmaceutical products, including bulk drugs, intermediates, drug formulations, biologicals, herbal products, and surgical products. Although India depends on China to meet its bulk drug requirement, the Indian government's decision to incentivize the manufacturing of APIs and key starting material (KSM) under the ‘Make in India’ program will help in building the infrastructure needed to strengthen foothold in this sector.
India currently contributes 20% to the global generic market. Almost every third tablet sold in the US is manufactured in India. The promotion of bulk drug parks under ‘Make in India’ would help India become self-sufficient and gain control of the drug manufacturing value chain, from KSMs to generic formulations.
India has the expertise needed to support this growth. Along with expert scientists, it is also home to a genetically diverse population, which could be leveraged for clinical trials, generally a difficult task in developed countries. Given the increase in chronic and lifestyle diseases and its large population, India could drive the demand for newer therapies and help in data generation for further research.
Indian scientists are known globally for their medical expertise. Therefore, there is no dearth of skills to work on new research projects. India has the highest number of medical colleges in the world, ensuring the availability of a trained medical workforce.
India is a low-cost manufacturing destination and has the highest number of FDA-approved manufacturing plants, after the US. Furthermore, Indian pharmaceutical companies are known for following the highest standards and practices in manufacturing.
India is an upcoming hub for innovation. Several startups based in the country have successfully conducted research and launched world-class biomedical products with cutting-edge technology.
The country is encouraging international investors to collaborate with the government. It is developing policies to boost investments, partnerships, and increase the ease of doing business
India has it all to become the next superpower destination for healthcare.
