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According to a report by McKinsey & Company, India’s pharmaceutical sector has continued to grow at a strong pace, with an 8% compound annual growth rate (CAGR) and a 9% increase in exports in 2024.
The sector’s expansion is driven by rapid growth in production, particularly in active pharmaceutical ingredients (APIs) and biotechnology.
The 8% CAGR achieved by India’s pharma sector is double the global average, making it one of the fastest-growing industries in the world.
India is now the largest supplier of generic medicines globally, accounting for over 40% of the generic medicines supplied to the US and 25% to the UK.
The country also supplies more than 60% of the world’s vaccines and 70% of global antiretroviral drugs used for HIV treatment.
This growth in exports has contributed to India’s 9% increase in pharmaceutical exports, nearly twice the global rate.
India is also making strides in emerging drug modalities such as mRNA, cell and gene therapies, and antibodies, with these areas growing at a 13-14% CAGR, outpacing conventional drug production.
The report highlighted India’s growing network of high-quality pharmaceutical manufacturing sites, including:
- 752 US Food and Drug Administration (USFDA)-approved plants,
- 2,050 World Health Organization Good Manufacturing Practice (WHO GMP)-certified plants, and
- 286 European Directorate for the Quality of Medicines (EDQM)-approved facilities
Additionally, compliance within the industry has significantly improved.
The incidence of ‘official action indicated’ (OAI) following USFDA inspections has dropped by 50% over the last decade, from 2013-14 to 2023-24.
The report also noted a growing focus on sustainability, with 10 of India’s top 20 pharma companies committing to reduce their emissions by over 30% by 2030.
Challenges Facing By The Pharmaceutical Sector
However, despite this progress, the industry faces several challenges.
Disruptions like digital transformation, automation, and the rise of new treatment methods could dramatically reshape pharmaceutical operations.
Geopolitical shifts, nearshoring trends, and increasing sustainability requirements may also pose risks to the sector.
Vishnukaant Pitty, Partner at McKinsey & Company stated, “India’s pharmaceutical industry stands strong today because of what it has built over the last decade.”
“With disruptions on the horizon, it is crucial for the industry to embrace these strategic themes and fundamentally transform operating model to unlock a high-performance future,” he further added.
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