PHARMACEUTICAL INDUSTRY

INTRODUCTION

India is the largest provider of generic drugs globally and is known for its affordable vaccines and
generic medications. The Indian Pharmaceutical industry is currently ranked third in pharmaceutical
production by volume after evolving over time into a thriving industry growing at a CAGR of 9.43%
since the past nine years. Generic drugs, over-the-counter medications, bulk drugs, vaccines,
contract research & manufacturing, biosimilars, and biologics are some of the major segments of the
Indian pharma industry. India has highest number of pharmaceutical manufacturing facilities that
comply with the US Food and Drug Administration (USFDA) and has 500 API producers that make for
around 8% of the worldwide API market.

Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of
generic demand in the US and 25% of all medicine in the UK. The domestic pharmaceutical industry
includes a network of 3,000 drug companies and ~10,500 manufacturing units. India enjoys an
important position in the global pharmaceuticals sector. The country also has a large pool of
scientists and engineers with a potential to steer the industry ahead to greater heights. Presently,
over 80% of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency
Syndrome) are supplied by Indian pharmaceutical firms. India is rightfully known as the "pharmacy of
the world" due to the low cost and high quality of its medicines.

Indian pharmaceutical sector

Indian pharmaceutical industry is known for its generic medicines and low-cost vaccines globally.
Transformed over the years as a vibrant sector, presently Indian Pharma ranks third in
pharmaceutical production by volume. The Pharmaceutical industry in India is the third largest in the
world in terms of volume and 14th largest in terms of value. The Pharma sector currently contributes
to around 1.72% of the country’s GDP.

According to a recent EY FICCI report, there has been a growing consensus over providing new
innovative therapies to patients. Indian pharmaceutical market is estimated to touch US$ 130 billion
in value by the end of 2030. Meanwhile, the global market size of pharmaceutical products was
estimated to cross over the US$ 1 trillion mark in 2023.

ADVANTAGES
COST EFFICENCY
India has emrged as the medial tourism hub of the world providing cost-effective treatments with
the latest technology enabled by several pathbreaking reforms and provision.
Access to affordable HIV treatment from India is one of the greatest success stories in medicine. India
is one of the biggest suppliers of low-cost vaccines in the world.

Because of the low price and high quality, Indian medicines are preferred worldwide, thereby rightly
making the country the ‘Pharmacy of the World’.

India has been traditionally quite strong in the pharma sector, with a low cost of manufacturing
(30%–35% lower than in the US and Europe), cost-efficient R&D (about 87% less than in developed
markets), and cheap skilled labour

ECONOMIC DRIVERS
On December 21, 2020, MoU was signed between Tata Memorial Centre of India and Vietnam
National Cancer Hospital to promote exchanges in the areas of training and scientific research, health
care services, collaboration in diagnosis and treatment for cancer patients.

The total market size of the Indian Pharma Industry is expected to reach US$ 130 billion by 2030 and
US$ 450 billion market by 2047.

The domestic pharmaceutical industry would likely reach US$ 57 billion by FY25 and see an increase
in operating margins of 100-150 basis points (bps).

India has the largest number of USFDA-compliant pharmaceutical plants outside the US and over
2,000 WHO-GMP approved facilities, serving demand from 150+ countries worldwide, with 10,500+
manufacturing facilities.

POLICY SUPPORT
The Ministry's scheme “Strengthening of Pharmaceutical Industry (SPI)" with a total financial outlay
of Rs. 500 crore (US$ 60.9 million) extends support required to existing pharma clusters and MSMEs
across the country to improve their productivity, quality and sustainability.

The Government has set a target to increase the number of Pradhan Mantri Bhartiya Jan Aushadhi
Kendras to 10,500 by March 2025. The product basket of PMBJP comprises 1,451 drugs and 240
surgical instruments.

The Union Cabinet, on April 26, 2023, approved the National Medical Devices Policy, 2023, which is
expected to facilitate the growth of the medical device sector to meet the public health objectives of
access, affordability, quality, and innovation.

The PLI scheme for pharmaceuticals is being implemented with a total outlay of the Rs. 15,000 crore
(US$ 2.04 billion) spanning from 2020-21 to 2028-29, to boost India's manufacturing capacity,
elevate investment, and diversify product offerings in the sector.

INCREASING INVESTMENT
Up to 100%, FDI has been allowed through automatic route for Greenfield pharmaceuticals projects.
For Brownfield pharmaceuticals projects, FDI allowed is up to 74% through automatic route and
beyond that through government approval.

The cumulative FDI equity inflow in the Drugs and Pharmaceuticals industry is US$ 22.38 billion
during the period April 2000-December 2023. This constitutes almost 3.4% of the total FDI inflow
received across sectors.
Indian pharma companies have a substantial share in the prescription market in the US and EU. The
largest number of FDA-approved plants outside the US is in India.

In the Interim Budget 2024-25, the government earmarked Rs. 1,000 crore (US$ 120 million) for the
promotion of bulk drug parks for FY25, a significant increase from the previous year.

MARKET SIZE

Market size of India pharmaceuticals industry is expected to reach US$ 65 billion by 2024, ~US$ 130
billion by 2030 and US$ 450 billion market by 2047. According to the government data, the Indian
pharmaceutical industry is worth approximately US$ 50 billion with over US$ 25 billion of the value
coming from exports. About 20% of the global exports in generic drugs are met by India.

India is among the top 12 destinations for biotechnology worldwide and 3rd largest destination for
biotechnology in Asia Pacific. The country holds 3-5% of the global biotechnology industry pie. In
2022, India’s bioeconomy was valued at US$ 137 billion, and aims to achieve US$ 300 billion mark by
2030.

During FY18 to FY23, the Indian pharmaceutical industry logged a compound annual growth rate
(CAGR) of 6-8%, primarily driven by an 8% increase in exports and a 6% rise in the domestic market.

INDIAN PHARMACEUTICAL MARKET

The Indian pharmaceutical industry has seen a massive expansion over the last few years and is
expected to reach about 13% of the size of the global pharma market while enhancing its quality,
affordability, and innovation.

The biosimilars market in India is estimated to grow at a compounded annual growth rate (CAGR) of
22% to become US$ 12 billion by 2025. This would represent almost 20% of the total pharmaceutical
market in India.

India is the 3rd largest producer of API accounting for an 8% share of the Global API Industry. About
500+ different APIs are manufactured in India, and it contributes 57% of APIs to prequalified list of
the WHO.
The current market size of the medical devices sector in India is estimated to be US$ 11 billion and its
share in the global medical device market is estimated to be 1.5%. The government has set ambitious
target to boost the medical devices industry in India, aiming to elevate it from its current US$ 11
billion valuation to US$ 50 billion by 2030.

The domestic pharmaceutical sector expects sales to grow 8-10% in the financial year 2023-24,
indicated an analysis done by CRISIL, a global analytical research and rating agency.

Indian pharma companies have a substantial share in the prescription market in the US and EU. The
largest number of FDA-approved plants outside the US is in India.

According to the Indian Economic Survey 2021, the domestic market is expected to grow 3x in the
next decade. India’s domestic pharmaceutical market stood at US$ 42 billion in 2021 and is likely to
reach US$ 65 billion by 2024 and further expand to reach US$ 120-130 billion by 2030. India's
biotechnology industry comprises biopharmaceuticals, bio-services, bio-agriculture, bio-industry, and
bioinformatics. The Indian biotechnology industry was valued at US$ 70.2 billion in 2020 and is
expected to reach US$ 150 billion by 2025. India’s medical devices market stood at US$ 10.36 billion
in FY20. The market is expected to increase at a CAGR of 37% from 2020 to 2025 to reach US$ 50
billion. The Indian pharmaceuticals industry is expected to grow 9-11% in the financial year 2024, as
per ICRA.

In the global pharmaceuticals sector, India is a significant and rising player. India is the world's largest
supplier of generic medications, accounting for 20% of the worldwide supply by volume and
supplying about 60% of the global vaccination demand. The Indian pharmaceutical sector is worth
US$ 42 billion worldwide. In FY23, the Indian pharma market saw a year-on-year growth of nearly
5%, reaching US$ 49.78 billion. During FY18 to FY23, the Indian pharmaceutical industry logged a
compound annual growth rate (CAGR) of 6-8%, primarily driven by an 8% increase in exports and a
6% rise in the domestic market.

EXPORTS
Pharmaceutical is one of the top ten attractive sectors for foreign investment in India. The
pharmaceutical exports from India reach more than 200 nations around the world, including highly
regulated markets of the USA, West Europe, Japan, and Australia. India supplied around 45 tonnes
and 400 million tablets of hydroxychloroquine to around 114 countries globally

India’s drugs and pharmaceuticals exports stood at US$ 22.51 billion in FY24 (April-January)
recording a strong year-on-year growth of 8.12% during the period.

Exports of Drugs & Pharmaceuticals were estimated to be at US$ 2.13 billion in January 2024,
accounting for 5.8% of the total exports in the month.

India is the 12th largest exporter of medical goods in the world. Indian drugs are exported to more
than 200 countries in the world, with US being the key market. Generic drugs account for 20% of the
global export in terms of volume, making the country the largest provider of generic medicines
globally. Indian drug & pharmaceutical exports stood at US$ 25.36 billion in FY23, US$ 24.60 billion in
FY22 and US$ 24.44 billion in FY21.
COMPANY SELECTED FROM PHARMACUETICAL:
SUN PHARMA

Managing Director: Dilip Shanghvi

Net Sales (Cr.): 20,812.14

Sun Pharmaceutical Industries Limited is the largest pharmaceutical company in India and the sixth-
largest generic pharmaceutical manufacturer in the world. It produces and sells pharmaceutical
formulations and active pharmaceutical ingredients to over 100 countries worldwide. Recently, Sun
Pharmaceutical acquired 100 percent of Libra Merger Ltd, an Israeli.

TRADEVIEW OF SUNPHARMA
The current price of SUNPHARMA is 1459.80 INR — it has increased by 0.05% in the past 24 hours.
Watch SUN PHARMACEUTICAL stock price performance more closely on the chart.

A pivot is an important price level, where traders expect price to either continue in the current
direction or reverse course.

NEWS
Sun Pharmaceutical shares were trading in red on May 30 after reports suggested that the US Food &
Drug Administration (US FDA) issued four observations to one of the pharma major's manufacturing
facilities.

According to CNBC-TV18, the US FDA inspected Sun Pharma's Dahej facility between May 10 - May
17, following which it issued four observations along with the Form 483.

At 1.30 pm, Sun Pharma shares were quoting at Rs 1,459.4 apiece, lower by 1.3 percent on the NSE
as compared to the previous session's closing price.