100-year road map: Pharma industry eyes $400-billion turnover by 2047

In the 1970s, a defining decade for the Indian pharma industry, the size of the domestic market was about Rs 650 crore, with multinational drug firms dominating the space. In 2022, it has soared to Rs 1.67 trillion domestic markets for drugs, and over 90 per cent of this space is now captured by locally produced medicines.

Having charted this journey of rapid expansion in the 75 years since Indian Independence, the indigenous drug industry is working on a road map for 2047 — or 100 years of India’s Independence.

Speaking to Business Standard, Satish Reddy, chairman of Hyderabad-based Dr Reddy’s Laboratories (DRL), says the medium-term target is to touch $120-130 billion by 2030 from a current $45 billion (including exports and domestic turnover), and the longer term plan to touch $400-450 billion turnover by 2047, the year that marks 100 years of Indian Independence.

“First, there is a need to change the innovation push. That follows a series of things like regulatory reforms, not only for innovation, but also to build capacities, that would help Indian companies compete better,” Reddy says. Research-linked incentive schemes, too, are a key tool to achieve this kind of growth, Reddy feels.

“A lot of discussion is on with the government in this area, and both the government and industry are committed to take this forward,” says Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance (IPA), a pharma industry body. IPA members account for 60 per cent of the domestic market and about 80 per cent of India’s exports of pharmaceutical products.

Jain, a former top executive of Abbott, said the discussions around the vision 2047 are about raising quality standards, broader reach for Indian pharma. Just like Indian drug makers are very strong in the US generics market today, India can also be the driver for supply of drugs worldwide, he quips.

 

Reddy and Jain agree that to achieve the vision for 2047; access to funding will play a key role. “An entire ecosystem from a financing point of view, faster approvals for clinical trials, etc, having an ecosystem of research and innovation — all these would be critical for achieving $450-bn size by 2047,” Reddy says.

While some research oriented start-ups have come up at Hyderabad and Bangalore, India needs more such hubs, he feels.

The early years of Indian pharma were shaped by entrepreneurs, most of whom were scientists and risk-takers — who made the most of the opportunities that the 1970 patent act presented before them.

“When it came to working with my father, I was always influenced by the boldness of his vision in terms of where he wanted his company to be. By 1992, he set out a vision to discover drugs, and actually showed that Indians were capable of discovering drugs,” Reddy says.

Both Reddy and Jain allude to Cipla’s path breaking innovation in launching an affordable HIV drug. “Anji Reddy (founder of DRL), Yusuf Hamied (Cipla) were not talking of 10 per cent, 20 per cent share in whichever molecule they were choosing. They were always talking about making it the biggest in the world,” Jain says.

Over the years, India has evolved into the third largest drug maker in the world in terms of volumes. But it still ranks 14th in terms of value. It now supplies to 200 countries in the world pharma products worth $24.47 billion (FY22), and generates an annual net trade surplus of $17 billion.

The industry is now talking about breaking into the top-10 countries in terms of value by 2030, and entering the top-5 club by 2047.