Post-COVID drug shortages in the US offer opportunity for India, says Pharmexcil

Several US pharmaceutical companies closed some manufacturing sites post-COVID due to unprofitable operations, leading to a drug shortage, and India can meet this increasing demand, said Uday Bhaskar, Director General of the Pharmaceuticals Export Promotion Council (Pharmexcil). He said India is well positioned to meet this demand, particularly for affordable pharmaceuticals addressing lifestyle diseases like diabetes, hypertension, and depression in the US market.

Bhaskar noted a recovery in the US market this year, with a growth rate of approximately 15.66%, compared to weaker performance last year. India currently supplies about 31% of the generic drugs imported by the US, with over 750 US FDA-approved manufacturing sites subject to stringent inspections.

In the previous financial year, India exported pharmaceuticals worth $8.728 billion to the US, contributing to an overall export value of $27.8 billion. Regulatory markets globally rely on India's generics to meet their pharmaceutical needs.

“The UK recorded a 21.6% growth rate in pharmaceutical imports post-Brexit, attributed to increased drug costs from Europe, providing new opportunities for Indian manufacturers. Meanwhile, the Asia-Pacific region and Latin America saw growth rates of 6.9% and 4.7% respectively, presenting future export expansion regions,"  said Bhaskar on the sidelines of the 10th edition of PharmaLytica, organised by Informa Markets in India in Hyderabad.

"Latin America imported $1.822 million worth of pharmaceuticals from India. Africa showed improvement, transitioning from a -5% growth rate to nearly 8% in 2023,” he said.  

However, India faces challenges as it imports about 75% of its Active Pharmaceutical Ingredients (APIs) and intermediates from China. The Indian pharmaceutical sector also lags in research and innovation compared to European and US counterparts. 

"There is a need for increased focus on developing biosimilars, biologics, and complex generics. Government support for research and innovation is currently inadequate, affecting India's global competitiveness," Bhaskar said.

As pharmaceutical players like Bangladesh and Vietnam gain prominence in manufacturing and vaccine production, Bhaskar stressed India's commitment to research and innovation. India aims to grow its pharmaceutical exports from $27.8 billion to $31 billion, bolstering its global market position.

Last month, Sharekhan, a financial services firm, sharing a similar view, predicted strong growth in the US segment of the Indian pharmaceutical industry in a report. The firm projected a 12% year-on-year (YoY) revenue increase to Rs 17,451 crore, driven by new product launches and market expansion efforts. This growth outlook reflects the industry's strategic focus on the US market and its ability to capitalise on emerging opportunities. Key players like Sun Pharma, Dr. Reddy’s, and Cipla emerged as top choices within the industry for investors eyeing the US market.