I saw the future of global pharmaceutical production in India

Guest contributor Frederic Kahn discusses the state of India’s pharmaceutical industry.

India started calling itself the “world pharmacy.” The accolade came after India’s heroic contribution to the global fight against Covid-19, when it shipped 65 million vaccines to 100 other countries and provided medical equipment and medicines to 150 countries. The pandemic has highlighted India’s impressive capacity to manufacture vaccines, generic drugs, active pharmaceutical ingredients (APIs) and other essential products – but the maturation of this industry began much earlier.

The The FDA noted in 2019, of all factories registered to supply the United States with APIs, 18% were in India compared to 13% in China. India’s pharma industry picked up steam after China’s environmental crackdown in 2017. And it gained even more momentum during the pandemic when India proved more resilient to supply chain disruptions than India. ‘somewhere else.

All signs suggest that this upward trajectory will continue. The Indian government has recently committed $1.3 billion promote domestic drug production. Meanwhile, upheavals in the global pharmaceutical supply chain are making limiting production to China less attractive. It seems that India has everything it needs – supply and demand – to become a world leader in pharmaceutical manufacturing.

So I was looking forward to seeing the pharmacy of the world for myself.

I recently visited three cities in India and met 12 of our clients there. It was a whirlwind trip of meetings, tours, facility tours and amazing food. It was also an eye-opening experience for someone like me who has been following the rise of India’s pharmaceutical sector with great interest for many years. I learned a lot, was impressed and surprised by much of what I discovered, and came away with great impressions of what India means for the future of global pharmaceutical production. Here are a few that I think will evolve in interesting and important ways in the years to come.

  • Raising the bar for quality — India is not just an alternative to China, but a superior option in many ways, especially in terms of quality. The quality of the products themselves, the ingredients that go into them, and the supply chains around them are, in many cases, better than what China has to offer and comparable to anything in the United States and in Europe. My conversations in India confirm that quality is seen as both a priority and a competitive differentiator.
  • Added a new intermediate to the ecosystem — As India consumes more APIs than it produces for domestic drug production, it has boosted the production of N-1 and N-2 intermediates. Midstream industry was previously concentrated in China, creating a choke point in the supply chain. So, having a new middleman in the ecosystem should help streamline API production for everyone.
  • Take advantage of additional capacity — The Indian pharmaceutical sector has suffered boost growth over the past 20 years, with the fastest expansion occurring in the past five. It has added significant new capability to global API and raw material sourcing, making the global supply chain more resilient, reducing reliance on China, and supporting the growth of India’s national pharmaceutical companies. The global dynamics of pharmaceutical manufacturing need to be reconsidered in light of what India has become.
  • Changing priorities in China — I doubt China will fight to win back API production which has (and will) shift to India. It is more likely that Beijing, given its track record, will skip a generation of products and move from API production to something more advanced: biotech, continuous manufacturing, digitalization – anything and everything innovative. China could become a leading edge. But in doing so, they will cede many opportunities to India. This fact was not lost on many people I spoke with.
  • Global strategic realignment — As India continues to climb, it will become a more important strategic partner for companies in the United States and Europe. But the West is also in the midst of a broad push towards coastal production and reducing reliance on other countries for API requirements. It will take years and billions of investments for this strategic realignment to unfold, and the consequences will be complicated for all parties involved, but everyone must be prepared for a landscape that looks radically different than it did in the past.
  • An independent India — What I take away most from my time in India is the sense of ambition and excitement that pervades everything. Everyone I’ve met seems to share a sense of optimism about what the pharmaceutical industry in this country can become. More importantly, they have detailed long-term plans to achieve this, as well as broad government support. I think we will soon see India not just as a supplier to other countries, but as a pioneer in quality, R&D and overall value that rivals anywhere else in the world.

The future of pharmaceuticals came early, although some might say it was late. To get a glimpse of what that future looks like – and how to get ahead of it – I encourage everyone to take a closer look at what’s happening in India right now.

About the Author

Frédéric Kahn is sales manager for generic APIs at Seqens.