Major Challenges in Indian Pharmaceutical industry and how to overcome them
The pharma sector has been a mix of both organic and inorganic segments and we have seen that companies are expanding themselves through partnerships and licensing.
By Dr Sujit Paul, Managing Director, StayHappi Pharmacy
India Pharmaceutical Industry is one of the best developed and fastest growing market that produces about 20 % of the world’s drugs. It is also the third largest in the world in terms of volume and tenth largest in value. India has become a prime destination for manufacturing of branded and generic medicines with a strong export element. The pharma sector has been a mix of both organic and inorganic segments and we have seen that companies are expanding themselves through partnerships and licensing. This helps in expanding their product offerings and improves their output to a better level.
In the current environment, though, there are various challenges in the Indian Pharmaceutical Industry, however, the key ones are as below:
• High ‘Out of Pocket (OoP) expenditure – It is limiting the access to medicines wherein, that Indian Insurance section does cater to patients in IP, and not in OP (Out Patient scenario), that causes quite a dent.
• Pricing of patented drugs - To improve access of such medicines to the common man’s reach, the Government of India should have a robust procurement plan for these products, at a well-negotiated price, for supply through government hospitals and dispensaries. It will enable a breather and ease to patients, which in the country is yet to see truly.
• Spurious Medicine - Fake versions of high value and/or high volume brands of the pharmaceutical companies in India are adversely affecting their business performance posing another major challenge, more than that it gives a negative Impact to the end consumer and a huge health hazard.
• Talent Pool - In India, the demand for these services has outstripped supply. There is a huge shortfall in ‘Healthcare Manpower’ of the country, right from Pharmacists, Nurses and Doctors and related.
• Public and government pressure to make drug prices more affordable – Indian pharmaceutical Industry is facing a pressure from both government and the civil society to make generic medicines more affordable for a large section of the population of the country. Pharmaceutical companies, including the government ones, see a scope for further reduction of prices for essential medicines in India.
• Inadequate health insurance schemes – As compared to other countries like South Africa, Sri Lanka and Brazil, the health insurance coverage is relatively low in India. While the current health insurance schemes cover only hospitalization expenses. However, it should also cover domiciliary or in-patient treatment costs and loss of income.
The nature and diversity of the Indian pharmaceutical market, healthcare objectives and legal system pose unique challenges for the pharmaceuticals sector in India. The diversity of the challenges are very complex, hence, Indian pharmaceutical sector has to face these challenges with more courage to emerge as one of the leading players in the world pharmaceutical market, and to achieve progress in the healthcare.
The constant increase in the size of the Indian pharmaceutical market, due to a change in lifestyle and high demand for quality health care, making this sector as one of the promising contributors of the Indian economy. The regulatory policies need be improved, especially in the area of patent and price control, to boost the growth and create an impression as the destination for the new generation pharmaceutical market. We know that firms that are able to market patented products earn high margins on them, which enables such companies to plough back more resources into research and development as well as come up with more useful discoveries. Hence, to conclude the key measures to overcome the basic challenges in the Indian Pharmaceutical industry would be to educate the general mass of people about the Industry, having strict regulations, so that doctors write prescriptions through molecule/salt name only and not by brand names, as we see in the West. This will ensure that high-quality generic medicines at most affordable price reaches in the hand of patients, and lastly to ensure that enough opportunity reaches to our internal talent pool for their growth in the country and serve the nation.