Suresh Prabhu: A new business model required for pharma industry

The former union minister Suresh Prabhu said, "For the past few decades, the pharma industry has built up production capacity, and economies of scale." This, he felt, allowed the industry to produce a high volume of quality drugs at a comparatively lower cost. "That is what makes India a leading exporter of generic medicines and vaccines," he said.

Prabhu stated that "The industry’s growth till the end of the current decade will be fuelled by novel biologics, new molecular entities, vaccines, and more integrated API (Active Pharmaceutical Ingredient) and KSM (Key Starting Material) production." This he felt has ensured India is poised to become "a global biopharma leader".

Prabhu added a word of caution that "The industry needs to now move up the value chain, mainly with new drugs and molecules, new chemical entities and research areas which can give us better medicines for cancer, diabetes management and kidney disease."

He said, "It is all the more imperative to do so because innovation accounts for two-thirds of the global value pool." He pointed out the importance of biosimilars. He said, "A strong R&D and innovation-based pipeline with potential breakthroughs in next-generation products will form the ladder to climb up the value chain."

Next Suresh Prabhu spoke about market expansion; and how exports account for half of the pharma industry’s revenue. Prabhu said, "While the industry already has a substantial export market, it is also poised to further expand its presence in the emerging markets of Asia-Pacific, Latin America and Africa." These regions offer opportunities for growth due to their increasing healthcare expenditure and a growing middle-class population that demands high-quality healthcare products.

Prabhu pointed out that India’s trade pact with the UAE in 2022 meant that the pharma industry has secured greater market access in the Emirates. Under the pact, Suresh Prabhu said, "Indian pharmaceutical products and medical goods will get regulatory approval within 90 days that have been approved in developed jurisdictions such as the US, the UK, the EU, Canada, and Australia."

He said, "For a foothold in under-penetrated markets such as Japan, China, Africa, Indonesia and Latin America, a new business model to adapt to the local markets will be an essential requirement." In Africa, where affordability is a concern, Indian drug makers can address the issue.

The Indian pharma industry plays a leading role globally, with 10% share of world production volumes and 2.4% share globally in terms of value. Exports are more than 50% of the total Indian pharma industry turnover and help provide affordable healthcare through high quality yet affordable generic drugs and formulations.  Growth in pharma has boosted the packaging market.