The production of generic medicines was key in providing affordable medication to large sections of the population in India during the peak of the COVID-19 pandemic. The generic medicines industry has become an important driver of the Indian pharmaceutical industry’s current growth, and has brought domestic pharma companies to the forefront. The pandemic was an unprecedented global health crisis which underlined the importance of access to healthcare. The increase in production of COVID-related generic medicines proved to be helpful for large sections of the population, owing to the relatively lower prices and the ease of access. Moreover, the production of generic medicines in India has also got a fillip from the increased demand in exports from a significant number of entities in developed countries. India has become a key player in the global pharmaceutical industry, with the advantages stemming from low-cost R&D, cheap manufacturing and a skilled workforce to produce a large quantity of drugs for its massive domestic market as well as the global one. The production of these generic medicines is aided by various factors, which include low-cost utilities, affordable equipment and cheap labour. The pharmaceutical industry in India is also fragmented, comprising over 10,000 companies. In India, generic drug companies have a diversified market and are only growing in terms of market share because of the expiration of patents of drug production. According to the Indian Drug Manufacturing Association, the last few years have seen a growth of the market as well as a rise in international importance largely due to generics and their affordability. The industry currently ranks 13th globally in terms of the value of medications and third globally in terms of volume of generic medications it produces. The domestic pharma market as a whole has grown annually at a compounded rate of 4.5%, increasing from $18 billion in 2017 to $21 billion in 2021. In the fiscal year of 2021, with the increase in the demand of generic COVID medication and COVID-related drugs, the exports grew by more than 18%. As one of the largest providers of generic medicines in the world, the country exported to many countries (including Japan, the UK and US) – contributing to nearly 40% of the US’ demand for generics. As recently in 2022, during the rise in infections due to the Omicron-variant, India became the largest hub for COVID-related anti-viral general drug production. This was announced by Union Health Minister Mansukh Mandaviya after the Drugs Controller General of India (DCGI) granted emergency use authorisation to numerous pharmaceutical companies in India for the manufacture of generic versions of the molnupiravir drug. The projection for the growth of the domestic pharmaceutical industry stands at 11% over the next two years, driven by the opportunities the generic drugs sector holds.
10 May 2022
Hannah Sarasu John
