Domestic Manufacturing in Pharmaceutical Sector

Syllabus :GS 3/Economy

In News

• The Union government has approved a financial outlay of Rs 15,000 crore for the Production Linked Incentive (PLI) scheme for Pharmaceuticals, aimed at boosting domestic manufacturing.

India’s Global Role in Pharmaceuticals

• India is known as the “Pharmacy of the World,” particularly for supplying vaccines, essential medicines, and medical supplies during the COVID-19 pandemic.
• The Pharma sector currently contributes to around 1.72% of the country’s GDP.
• Pharmaceutical Exports: Increased by 8.36% from $2.13 billion (July 2023) to $2.31 billion (July 2024).
  • Exported pharmaceuticals worth $27.85 billion in FY 2023-24, up from $15.07 billion in FY 2013-14.
  • India ranks 3rd globally in drug and pharmaceutical production by volume, exporting to 200+ countries.
  • Top Export Destinations: USA, Belgium, South Africa, UK, and Brazil.
• Growth Projections: Expected to reach $100 billion by 2025 with a growth rate of 10-12%.
• India’s Biotechnology Sector Growth: Increased 13-fold from $10 billion in 2014 to over $130 billion in 2024.
  • Future Projections: Expected to reach $300 billion by 2030.
• Pharmaceutical Market Growth is driven by metropolitan cities, Tier I cities, and rural markets, each accounting for about 30% of market share.

Challenges

• Quality Concerns: Ensuring consistent quality standards is crucial, particularly for exports to regulated markets.
• Price Regulation: Government policies on drug pricing can impact profitability and investment in R&D.
• Dependency on Imports: Despite efforts to boost domestic production, India remains dependent on imports for certain APIs and intermediates.

Related Initiatives 

• The Production Linked Incentive (PLI) Schemes in India focus on boosting domestic manufacturing in key sectors: bulk drugs, pharmaceuticals, and medical devices. 
• PLI Scheme for Bulk Drugs : Financial Outlay: Rs. 6,940 crores
  • Tenure: FY 2022-2023 to FY 2028-29
  • Objective: Promote manufacturing of critical Key Starting Materials (KSMs), Drug Intermediates (DIs), and Active Pharmaceutical Ingredients (APIs).
• PLI Scheme for Pharmaceuticals : Financial Outlay: Rs. 15,000 crores
  • Tenure: FY 2022-2023 to FY 2027-2028
  • Objective: Incentivize manufacturing of high-value pharmaceutical products like patented drugs, biopharmaceuticals, complex generics, anti-cancer drugs, and orphan drugs.
• PLI Scheme for Medical Devices : Financial Outlay: Rs. 3,420 crores
  • Tenure: FY 2022-2023 to FY 2026-2027
  • Objective: Support domestic production of high-value medical devices, such as MRI machines, CT scans, and linear accelerators, reducing dependence on imports.

Conclusion and Way Forward 

• India’s pharmaceutical sector stands as a testament to the country’s capabilities in innovation, manufacturing, and global healthcare leadership.
• With continued support from the government and investments in R&D, the sector is poised to achieve new heights, contributing significantly to both national and global health outcomes.

For More information Refer to India’s Pharma Sector.

Source :PIB