Explore the dynamics of India’s API Pharma focusing on production, market trends, challenges, and government initiatives to enhance domestic manufacturing.
The global pharmaceutical sector is extensive, encompassing two primary segments: Active Pharmaceutical Ingredients (API) and finished products. APIs serve as the cornerstone of medications, facilitating their desired therapeutic effects.
China stands as a major player in the API market, supplying a significant portion of the world’s API demand. However, when the COVID-19 pandemic emerged, disruptions in the global supply chain led to shortages of raw materials, impacting the pharmaceutical industry adversely.
APIs, commonly referred to as Active Pharmaceutical Ingredients, represent substances incorporated into medications to confer specific therapeutic effects. They constitute one of the essential components of pharmaceutical formulations, alongside excipients, which aid in delivering the API’s effects.
India boasts the world’s third-largest pharmaceutical industry. Approximately 70% of India’s API requirements are fulfilled by China, which includes crucial ingredients necessary for producing finished drugs. Chinese APIs are notably cheaper, costing nearly one-third less than their Indian counterparts, primarily due to subsidized pricing.
The competitive pricing of Chinese APIs compelled many domestic API manufacturers in India to cease operations, leading to a gradual withdrawal from API production. Despite significant investments, Indian firms struggled to achieve profitable returns, attributing the high costs of API production in India to factors such as infrastructure requirements and expensive manufacturing technologies.
The Indian API market is witnessing notable trends, including rapid growth in the biopharmaceutical sector and advancements in API manufacturing technologies. API manufacturing in India is broadly categorized into branded (innovative) and unbranded (generic) segments.
The impending global patent cliff is anticipated to drive revenue growth in India’s API market. With its reputation for producing high-quality APIs, India has garnered widespread recognition internationally. Projections indicate a promising growth trajectory for the Indian API market, with an estimated 10% increase over the next two years.
To bolster domestic API manufacturing, the Indian government has proposed a INR 10,000 crore scheme aimed at incentivizing local production. This initiative aims to stimulate exports of raw materials to pharmaceutical manufacturers worldwide, consequently boosting revenue for Indian API manufacturers. Additionally, the establishment of three API parks by the Union Cabinet aims to mitigate dependence on China for critical APIs, further strengthening India’s position in the global pharmaceutical landscape.
API Pharma
API Pharma
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