India as a Net Exporter of Medical Consumables | 09 May 2024

Source: ET

Why in News?

• India has achieved a significant milestone in the medical goods business, becoming a net exporter of medical consumables and disposables for the first time in the fiscal year 2022-23.
• This marks a reversal of an old trend where imports of such products outweighed exports.

What is the Status of India's Pharmaceutical Industry?

• About:
  • India has historically been dependent on imports for medical consumables and disposables. India has now reversed this trend, indicating a shift towards self-sufficiency in this sector.
  • India is the largest manufacturer of generic medicines globally. Its pharmaceutical industry plays a crucial role in global healthcare, providing affordable generic medicines.
  • It is currently valued at USD 50 billion as a major pharmaceutical exporter, with over 200+ countries served by Indian pharma exports.
  • It is expected to reach USD 65 Billion by 2024 and to USD 130 Billion by 2030.
  • Export and Import Statistics:
    • Exports: India exported medical consumables and disposables worth USD 1.6 billion, showing a 16% surge over the previous fiscal year (2021-22).
    • Imports: Imports amounted to approximately USD 1.1 billion, indicating a 33% decline.
• Major Challenges with India’s Pharma Sector:
  • Lagging Research and Development (R&D): India's R&D spending in pharma is lower compared to developed nations. This hinders the creation of new drugs.
  • Limited Innovation Ecosystem: Collaboration between academia, research institutions, and pharmaceutical companies is weak, slowing down development of high qualtity drugs and medical devices.
  • Price Controls and Profit Margins: Government price controls on some drugs can limit profits, making it less attractive for companies to invest heavily in R&D for new drugs.
  • Complex Regulatory Framework: Navigating the approval process for new drugs can be lengthy and complex which leads to red tapism.
  • Skilled Workforce Shortage: There's a lack of highly qualified scientists and researchers in the pharma sector, which leads to overburdened staff affecting efficiency.
  • Intellectual Property (IP) Concerns: Uncertainties around IP protection, due to provisions like compulsory licensing (Indian Patents Act 1970), can discourage large pharma investment in India.
  • Import Dependency: Despite progress, India remains largely dependent on imports for medical devices, with around 70% sourced from other nations.
    • India's heavy dependence on Active Pharmaceutical Ingredients (APIs) imports, particularly from countries like China.
  • Substandard Drugs: One significant issue in the Indian pharmaceutical sector is the occurrence of deaths linked to the consumption of substandard or counterfeit drugs.
    • Indian-origin medicines leads to multiple deaths of children in Africa and Central Asia.

What Further Steps Can be Taken to Reform India’s Pharma Sector?

• Legislative Changes and Centralised Database:
  • Drugs and Cosmetics Act (1940) needs to be amended and the establishment of a centralised drugs database can enhance surveillance and ensure effective regulation across all manufacturers.
  • Also, implementing common quality standards across all states is necessary to ensure consistent product quality.
• Encouraging Certification:
  • Encouraging more pharmaceutical manufacturing units to obtain World Health Organization (WHO) Good Manufacturing Practice certification can elevate industry-wide quality standards.
• Transparency, Credibility, and Accountability:
  • The regulator and the industry must collaborate to enhance India's drug regulatory regime, making it transparent, credible, and aligned with global standards.
• Focus on Sustainable Manufacturing Practices:
  • Emphasising sustainable manufacturing practices, including green chemistry, waste reduction, and energy efficiency, can enhance the sector's environmental sustainability while reducing costs.
• Moving Beyond Generics: India excels in producing affordable generic medicines but faces challenges in developing novel drugs.
  • Government support through initiatives like PLI and facilitating clinical trial funding can accelerate research and development efforts.
• Boosting R&D and Innovation: India's lower expenditure on research and development compared to global leaders can be improved.
  • Focus should be to foster public-private partnerships and provide tax incentives for innovation.