AI-driven drug discovery, precision medicine, and sustainable manufacturing can redefine the pharma industry

What are the top 3 trends that defined pharma manufacturing in India and globally in 2024?

In 2024, the pharmaceutical manufacturing landscape underwent transformative changes, driven by technological innovations, regulatory adaptations, and evolving global demands. The following trends not only shaped the sector then but also set the stage for the future of pharma manufacturing, both in India and globally.

One of the most prominent trends was the increased adoption of digital and AI-driven manufacturing. In India, pharmaceutical manufacturers accelerated their digitalisation efforts, focusing on real-time monitoring, predictive analytics, and AI-driven quality control. These advancements helped ensure compliance, reduce production costs, and optimise operations. For instance, AI was used to predict equipment maintenance needs, minimising downtime and making production cycles more reliable. On the global stage, AI and Machine Learning (ML) drove drug discovery and process optimisation, especially as large-scale pharma companies adopted AI for precision medicine. Smart factories, utilising data analytics, IoT devices, and automated reporting, became the norm, meeting regulatory standards, reducing errors, and improving efficiency across the industry.

Another defining trend in 2024 was the shift toward sustainable and eco-friendly manufacturing practices. In India, pharmaceutical companies responded to global environmental concerns and government mandates by adopting greener manufacturing techniques. Efforts included reducing waste, improving effluent management, and optimising energy consumption, with a notable shift toward continuous manufacturing processes and renewable energy sources like solar power. Globally, the emphasis on circular economy principles grew, with companies striving to minimise waste, recycle solvents, and reduce the carbon footprint of supply chains. Regulatory bodies in the U.S. and Europe held manufacturers accountable for their environmental impact, leading to an increase in partnerships with tech companies focused on sustainable packaging and production solutions.

Finally, reshoring and localised production emerged as key strategies for improving supply chain resilience. In India, the government’s Production Linked Incentive (PLI) scheme encouraged the local production of active pharmaceutical ingredients (APIs), reducing the country’s dependence on imports and boosting domestic pharmaceutical capabilities. This move was particularly crucial for ensuring the availability of essential and life-saving drugs. Globally, the pharmaceutical industry also focused on reshoring and nearshoring production to mitigate risks associated with global supply chains. In the U.S. and Europe, investments in local API and drug manufacturing intensified, with new production facilities being established to build more secure, redundant supply chains.

These trends reflected the pharmaceutical industry’s growing reliance on advanced technologies, its commitment to sustainability, and the strategic shift toward secure, localised production. As 2024 shaped the sector, these developments positioned India and global pharma manufacturing for a more resilient, environmentally conscious, and technologically advanced future.

While India leads in US Drug Master Filings and competes credibly in API manufacturing, profit margins are slimming. What are the investments that India’s pharma companies must make if they want to transition to more innovative, complex and higher value development and manufacturing? Do you see that happening? If yes, can you cite examples? If not, what are the challenges and how can they be overcome?

India’s pharmaceutical industry has firmly established itself as a global leader in generics and API (Active Pharmaceutical Ingredient) manufacturing, holding a dominant position in U.S. Drug Master Filings. However, with profit margins in traditional generics shrinking due to intense competition and price erosion, Indian pharma companies must shift focus toward more complex, innovative, and higher-value areas to maintain and grow profitability. This transition will require substantial investments in several key areas.

First, advanced research and development (R&D) and biologics will be critical. To move from generics to novel drug development, Indian companies must invest heavily in R&D for innovative therapies like biosimilars, cell and gene therapies, and specialty drugs. Building sophisticated laboratories, recruiting scientific talent, and collaborating with global research institutions are essential steps in this process. Companies such as Biocon have made significant progress in the biosimilars market, partnering with global leaders like Mylan and Viatris to enter regulated markets in the U.S. and Europe. Similarly, Dr. Reddy’s and Cipla are exploring the biosimilar and complex generics space, focusing on areas like respiratory and oncology drugs. However, high costs, lengthy timelines, and stringent regulatory requirements pose significant challenges. Additionally, the technical complexity and capital intensity of biologics manufacturing make it a substantial barrier for many firms.

Another important area for investment is digital transformation and smart manufacturing. To improve efficiency and meet higher quality standards, Indian pharma companies must adopt Industry 4.0 technologies, including IoT for equipment monitoring, AI for predictive analytics, and automation for more efficient, consistent manufacturing. Large players such as Sun Pharma and Aurobindo Pharma have already begun investing in these digital initiatives. Lupin has implemented data-driven manufacturing practices to ensure compliance with global standards and reduce costs. However, the high initial investment and the need for skilled talent remain hurdles, particularly for mid-sized players who may struggle to afford the capital required for digitalisation. Partnerships with technology providers or public-private initiatives could help overcome these barriers.

A third critical investment area is regulatory and quality compliance infrastructure. Moving into the innovative drug space requires meeting the stringent regulatory standards of agencies like the FDA and EMA. Indian companies will need to enhance their quality control mechanisms, data management systems, and documentation practices to comply with these demanding standards. Companies like Zydus Cadila and Torrent Pharmaceuticals have consistently worked to maintain high compliance standards, while Sun Pharma has invested heavily in quality systems to avoid regulatory scrutiny and build trust in regulated markets. However, repeated quality control issues have affected India’s reputation, particularly with U.S. FDA inspections. Overcoming these challenges will require a cultural shift within organisations and consistent investment in quality improvement systems, possibly supported by government-backed incentives.

Collaborative R&D models and partnerships also present an opportunity for Indian pharma companies to mitigate the risks and costs of innovation. By forming strategic partnerships with global pharma companies and academic institutions, Indian companies can access new markets, share expertise, and accelerate product development. Glenmark Pharmaceuticals has taken an innovative approach by partnering with U.S.-based research firms for drug discovery, while Cipla has teamed up with biotech firms to explore new therapeutic areas. However, securing such partnerships requires a commitment to innovation and regulatory compliance, which some companies have yet to establish. The industry could benefit from government support for public-private partnerships to encourage R&D and innovation.

The transition towards more innovative, complex, and higher-value manufacturing is indeed happening, but it is gradual and faces several challenges. High investment requirements, regulatory hurdles, and the need for advanced skills are significant obstacles. Larger players are leading the shift, but smaller firms may struggle to match the scale of investment needed to stay competitive.

To overcome these challenges, Indian pharma companies could benefit from government incentives, such as tax benefits, subsidies for R&D, and reduced costs for digital transformation. Additionally, skill development programs aimed at building expertise in biologics, quality compliance, and digital transformation will help bridge the talent gap. Increased global collaborations will also accelerate knowledge transfer and innovation, ensuring the industry remains competitive in the global market.

While the potential for India’s pharmaceutical sector to transition to innovative, high-value manufacturing is clear, this shift requires a coordinated effort across the industry, government, and educational institutions to make it sustainable and impactful.

According to the Derwent World Patents Index from Clarivate, the number of pharma patents filed and granted by Indian companies has risen from 1,590 in 2013 to 8,793 in 2023, representing an increase from 0.5 per cent of global patents to almost 2 per cent. What has been the impact of this rise in terms of healthcare affordability and access to these patented assets in India and the LMIC regions? 

 

The rise in pharmaceutical patents filed and granted by Indian companies, as reported by the Derwent World Patents Index from Clarivate, underscores India’s increasing role in global pharmaceutical innovation. The number of patents has surged from 1,590 in 2013 to 8,793 in 2023, reflecting not only enhanced capabilities in drug discovery and development but also highlighting important impacts on healthcare affordability and access, particularly in India and Low- and Middle-Income Countries (LMICs). The growing patent activity has had a significant influence in several key areas:

One of the most notable impacts is the boosted availability of affordable generic and biosimilar drugs. Many of these patents are linked to incremental innovations, improved formulations, and biosimilars, aimed at making drugs more accessible and affordable. Indian pharmaceutical companies have specialised in reverse-engineering complex medicines and producing biosimilars as alternatives to costly biologics. This has enabled the availability of many essential treatments at a fraction of their original cost, significantly enhancing access to medicines in India and LMICs. For example, companies like Biocon and Cipla have introduced affordable biosimilars and cost-effective versions of critical treatments for conditions such as diabetes and cancer. Biocon’s insulin and monoclonal antibody biosimilars, in particular, have provided affordable treatment options in LMICs, improving the management of chronic conditions for millions.

Additionally, the rise in patent activity has bolstered innovation in areas crucial to LMICs, such as infectious diseases, tuberculosis, and HIV/AIDS. Indian pharmaceutical companies are increasingly focusing on developing generics and new formulations targeting diseases prevalent in these regions. This innovation supports global health efforts and addresses major health burdens in LMICs. Companies like Lupin and Dr. Reddy’s have patented numerous tuberculosis and HIV treatment formulations that are distributed both locally and internationally. These products are often aligned with global health organisations, ensuring that affordable pricing is maintained, thus supporting public health initiatives in these regions.

Another key impact of this patent rise is the promotion of domestic R&D and self-reliance in healthcare. The growth in patent filings reflects a stronger R&D base in India, leading to greater domestic innovation and a reduction in reliance on imported medications. This fosters more controllable local costs, which in turn enables better pricing for Indian patients and those in LMICs where India supplies medicines. The Production Linked Incentive (PLI) scheme has played a role in supporting Indian companies in manufacturing active pharmaceutical ingredients (APIs) domestically, allowing for more affordable production of critical drugs. Companies like Sun Pharma and Aurobindo Pharma have been able to keep prices relatively low for essential medications while maintaining large-scale production for LMICs.

However, challenges remain in balancing the rise of patents with accessibility. Some Indian patents are for high-value specialty drugs, such as oncology treatments, which can be prohibitively expensive and inaccessible to lower-income populations. While India has made significant strides in increasing access to generic drugs, the high costs associated with certain patented medicines can still limit access within India and LMICs. To address this, Indian pharmaceutical companies have historically negotiated voluntary licensing agreements and supported government-led compulsory licensing to enable the generic production of essential drugs in LMICs after the initial exclusivity period of patents expires.

Finally, collaborations have played a crucial role in enhancing global access to patented drugs. Indian companies have partnered with organisations like Gavi, UNICEF, and The Global Fund to make patented drugs more affordable, facilitating access to essential treatments in LMICs. For instance, Cipla and Mylan have collaborated with The Global Fund to provide affordable HIV treatments across Africa and Asia, supporting long-term health initiatives in these regions.

In summary, the rise in pharmaceutical patents by Indian companies has had a positive impact on healthcare affordability and access in India and LMICs. Indian pharmaceutical firms have leveraged patents to produce innovative treatments that are more affordable and locally relevant. However, challenges remain, particularly with highly specialised and expensive patented drugs. Moving forward, continued government support, international collaboration, and a balanced approach to intellectual property rights will be essential to ensuring that these innovations reach those who need them most. A dual strategy that fosters innovation while addressing accessibility will help maximise the positive impacts of India’s growing patent portfolio on healthcare in both India and other LMICs.

What are the key challenges, from an India context, of integrating patient-centric innovation in today’s evolving market? 

Integrating patient-centric innovation in India’s evolving pharmaceutical and healthcare market presents a unique set of challenges. As the industry transitions towards models that emphasise personalised care and patient-centred solutions, several obstacles arise due to market dynamics, regulatory frameworks, and patient demographics. These challenges can hinder the seamless integration of patient-centric innovation in India’s healthcare system.

One of the primary challenges is the high cost of developing personalised medicine. Treatments such as gene therapies, biologics, and personalised medicine require substantial investment in research and development (R&D), clinical trials, and specialised manufacturing. In India, where affordability is crucial for access, the high development costs pose a significant barrier. Companies often struggle to justify the return on investment for personalised medicines when mass-market generics offer more predictable revenue streams, making it difficult to bring these innovations to market at prices that are accessible to the majority of the population.

Another significant challenge is the fragmented and inconsistent healthcare infrastructure across India. A patient-centric approach demands robust healthcare infrastructure, including widespread diagnostic capabilities, integrated data systems, and consistent follow-up mechanisms. However, healthcare infrastructure varies widely between urban and rural areas. Rural areas, in particular, often lack basic facilities, diagnostic tools, and continuity of care, which complicates the implementation of patient-centric innovations that rely on coordinated, ongoing care.

Additionally, data privacy and cybersecurity concerns are crucial obstacles. Patient-centric innovations, especially digital health tools, rely heavily on patient data to personalise treatments. However, India’s regulatory framework for data privacy and cybersecurity is still in its nascent stages, with legislation such as the Digital Personal Data Protection Act still being implemented. Without mature data protection standards, patients may be hesitant to share personal health information, and healthcare providers may be cautious about adopting data-driven innovations due to potential compliance risks and security vulnerabilities.

India’s regulatory environment also presents hurdles for the timely approval of innovative treatments. The country’s regulatory framework is evolving, but it can still be cumbersome, particularly for patient-centric treatments like cell and gene therapies, digital therapeutics, and companion diagnostics. The lengthy approval timelines and lack of regulatory clarity delay patient access to new treatments, limiting the market’s ability to respond swiftly to patient needs and reducing incentives for companies to pursue such innovations.

Limited patient awareness and health literacy also pose a challenge. For patient-centric innovations to succeed, patients must be informed about their options and the benefits of personalised treatments. However, health literacy in India, especially in rural and underserved areas, is relatively low, with many patients unfamiliar with or distrustful of advanced treatments and digital health tools. This lack of health literacy can result in lower adoption rates for patient-centric services, such as telemedicine and digital health apps, which rely on active patient participation.

Economic inequality further complicates the accessibility of patient-centric innovations. A significant portion of healthcare expenses in India is borne out-of-pocket, and many of the innovative, patient-centric therapies remain financially inaccessible to lower-income populations. While health insurance coverage is increasing, it is still limited, and many plans do not cover the latest therapies or preventive care services. As a result, treatments requiring continuous engagement, such as personalised medicine or ongoing remote monitoring, remain out of reach for most patients.

Finally, there is a limited focus on preventive care and chronic disease management in India’s healthcare system. Patient-centric innovation often emphasises early diagnosis, preventive care, and the management of chronic diseases. However, India’s healthcare system currently prioritises acute and immediate care, leaving a significant burden of chronic diseases like diabetes and cardiovascular conditions unaddressed. Integrating preventive care and long-term management into the healthcare system requires a shift in healthcare policy and incentives for both providers and patients.

To overcome these challenges, Indian pharmaceutical companies, healthcare providers, and policymakers are beginning to take steps toward more effective integration of patient-centric innovation. Public-private partnerships (PPPs) could help improve healthcare infrastructure, increase funding for personalised medicine, and expand access to diagnostic tools. Investment in health technology, such as telemedicine, mobile health apps, and wearable devices, can bridge the gap in rural areas and provide remote consultations. Increasing health literacy through public awareness campaigns and educational programs can encourage greater patient engagement. Finally, implementing clear data governance frameworks will help build patient trust, making them more comfortable with sharing the data needed for personalised care.

While India’s healthcare landscape holds potential for integrating patient-centric innovation, it will require sustained effort, strategic investment, and policy support to fully realise its impact across diverse patient demographics.

What are the top 3 trends to watch out for in 2025, which could have a disproportionate impact on the global and Indian life sciences landscape? 

In 2025, the life sciences landscape is expected to undergo transformative changes that will significantly impact both global and Indian markets. Three key trends are poised to reshape healthcare delivery, pharmaceutical innovation, and patient access.

The first trend is the expansion of AI and machine learning in drug discovery and development. AI and ML are accelerating the identification of promising drug candidates, optimising clinical trial designs, and predicting patient responses. These AI-driven platforms are expected to reduce the time and cost associated with R&D, enabling companies to move from lab discovery to market faster and with fewer failures. In India, pharmaceutical companies are increasingly adopting AI to streamline operations, optimise supply chains, and improve quality control. Many Indian firms are investing in AI partnerships and in-house capabilities to enhance drug discovery and repurposing, particularly for diseases common in low- and middle-income countries (LMICs). Indian companies are exploring AI for quicker development of generics and biosimilars, positioning themselves as leaders in AI-driven pharma manufacturing for global markets. Companies such as Sun Pharma and Biocon are implementing AI for targeted drug discovery and clinical trial management, while AI-powered diagnostic tools are expanding access to preventive care, particularly for rural and underserved populations in India.

The second trend is the rise of precision medicine and genomic-based therapies. Precision medicine, which tailors treatment based on an individual’s genetic, environmental, and lifestyle factors, is becoming more mainstream. Advances in genomics and CRISPR-based therapies are driving personalised treatments, especially for oncology, rare diseases, and chronic conditions. In India, precision medicine could be transformative, particularly for treating diseases with genetic predispositions prevalent in the population. However, the high cost of genomic sequencing and personalised therapies presents a barrier. Government initiatives and academic partnerships will be crucial to making precision medicine more accessible. Companies like Strand Life Sciences and MapmyGenome are leading the way with genomics-based solutions, offering genetic testing and personalised health insights. The integration of genomics with traditional medicine is on the rise, and research into pharmacogenomics is focusing on India’s diverse genetic profile, aiming for treatments tailored to specific genetic subgroups.

The third trend is an increased focus on sustainable and green manufacturing practices. With rising awareness of environmental sustainability, life sciences companies worldwide are adopting greener manufacturing practices. This includes waste reduction, water conservation, and a shift to renewable energy sources in production. This trend aligns with the global push toward net-zero carbon emissions, and pharmaceutical companies are increasingly being held accountable for their environmental footprint. In India, as a major supplier of APIs and generic drugs, adopting sustainable practices could give Indian companies a competitive edge in the global market. Government incentives and international collaborations will support the shift to eco-friendly production processes. Sustainable practices are critical for mitigating supply chain risks and reducing dependence on imported raw materials. Indian pharmaceutical giants like Dr. Reddy’s and Aurobindo Pharma have already made strides by investing in solar power and green chemistry. Many mid-sized companies are adopting eco-friendly solvents, optimising energy use, and improving waste management to align with global sustainability standards.

In conclusion, AI-driven drug discovery, precision medicine, and sustainable manufacturing will likely redefine the pharmaceutical and life sciences industries globally and locally. For India, these trends offer opportunities to lead in affordable healthcare solutions while meeting global standards for sustainability and innovation. The challenge will be for Indian companies and regulators to adapt quickly and make strategic investments to support these shifts, while prioritising accessibility for the Indian population and LMICs.