NEW DELHI: Foreign direct investment in India’s pharmaceutical sector saw a ‘sudden surge’ in 2020-21, mostly driven by investments to meet COVID-19-related therapeutics and vaccine demands, Study finds economic.
During April-September 2021, FDI inflows continued to be buoyant at Rs 4,413 crore, increasing at the rate of 53% from the same period in 2020-21, according to the survey filed. in Parliament by Finance Minister Nirmala Sitharaman on Monday.
Although price competitiveness and good quality have enabled local drug producers to be dominant players in the global market, thus making the country the “pharmacy of the world”, the survey highlighted that India is highly dependent the importation of drugs in bulk which are used in the formulation of drugs.
“The extraordinary growth of foreign investment in the pharmaceutical sector is mainly due to investments to meet COVID-19-related demands for therapies and vaccines,” he said.
Stating that India’s pharmaceutical industry ranks third in the world in terms of volume production, the survey indicates that in 2020-21, total pharmaceutical exports stood at $24.4 billion against total pharmaceutical imports. of $7.0 billion, thus generating a trade surplus. of $17.5 billion.
“India is the largest supplier of generic drugs with a 20% share of global supply,” the survey for 2021-22 says.
Elaborating on the reasons for the sector’s success, the survey said, “Competitive pricing and good quality have enabled Indian drug producers to be dominant players in the global market, thus making the country the ‘pharmacy of the world’. world “.
The document which details the state of the economy ahead of the government’s budget for the fiscal year beginning April 1, 2022, however, drew attention to India’s reliance on bulk drug imports.
“Although it is a leading player in formulations, the country is significantly dependent on the import of bulk drugs which are used in the formulation of the drug. In some cases, the import dependency varies between 80 and 100%,” he said.
This issue of import dependence of critical bulk drugs has been considered by a high-level committee, and a composite set of actions to encourage the production of bulk drugs has been launched and the government has taken initiatives to meet the requirements of the pharmaceutical and medical device industries.
The measures include a program to promote bulk drug parks which envisages the creation of world-class common infrastructures; Production Linked Incentive Scheme (PLI) of Rs 6,940 crore for bulk drugs and Rs 15,000 crore PLI for pharmaceuticals.
In addition, the government has also announced a PLI for medical devices with a total financial outlay of Rs 3,420 crore.
Outlining the measures taken by the government to make medicines accessible, especially during the pandemic, the survey said that based on the recommendations of a Standing Committee on Affordable Medicines and Health Products (SCAMHP), NITI Aayog , National Pharmaceutical Pricing Authority (NPPA), the government has capped the mark-up for oxygen concentrators at 70% on the price to distributor (PTD).
The trading margins of pulse oximeter, glucometer, blood pressure monitor, nebulizer and digital thermometer were also capped, he added.
“As a result, most brands of these devices have lowered their prices by up to 89%,” he said, adding that most drugs used for the management of COVID-19 are scheduled drugs for which a ceiling price was set by the NPPA.
“Even in the case of a few unscheduled drugs like Remdesivir, which are part of the COVID-19 protocol, upon government intervention, the MRPs of various brands of Remdesivir have been voluntarily reduced by major manufacturers/marketers,” he said. -he declares.