EY Parthenon – OPPI report claims India’s pharma sector set for rapid growth

Key Findings:

• 75 per cent pharma leaders emphasise the need for sustainable manufacturing practices
• Highlight digital integration as crucial for improving healthcare access

• 63 per cent CXOs cite the need for a single global product standard
• 50 per cent believe regulatory simplification and streamlining will drive growth

EY Parthenon (EY-P) in partnership with the Organisation of Pharmaceutical Producers of India (OPPI), released a report titled ‘Viksit Bharat@2047: Transforming India from pharmacy of the world to pharma powerhouse for the world’, to navigate the pharma industry’s journey towards global excellence. The report discusses how the industry, with support from the government and collaboration with startups and academia, is innovating and establishing capabilities to achieve a $450 billion market by 2047. 

Between September and October 2024, EY-P and OPPI undertook primary research* consulting top CXOs from leading Indian and global multinational pharmaceutical companies, to understand their perspective on the pivotal growth areas for the Indian pharma industry. A key takeaway was the need for a unified vision for innovation, with a focus on building a collaborative ecosystem and identifying quality and talent as crucial drivers of future growth.

In terms of key focus areas to strengthen innovation and R&D, 86 per cent of pharma leaders said it is important to foster ecosystem collaboration, and 79 per cent believed AI/ML can help improve efficiency and productivity in drug discovery and clinical development process. 50 per cent emphasised regulatory simplification as the key to growth. 

Suresh Subramanian, Partner & National Life Sciences Leader, EY Parthenon India said, “India’s pharmaceutical sector is poised for significant growth. Our report highlights advancements in critical areas such as Active Pharmaceutical Ingredients (APIs) and Key Starting Materials (KSMs) and the increasing role of digital technologies in driving innovation. Insights from our survey of leading CXOs underscore the importance of ecosystem collaboration and sustainable manufacturing practices as key drivers for this growth. Coordinated efforts across industry, government, and academia will be crucial in positioning India as a global pharma powerhouse over the coming decade.”

Adding to it, Anil Matai, Director General, OPPI said, “India has a comprehensive vision of transforming itself into a global pharma powerhouse, leveraging innovation, quality, and an integrated pharma supply chain. The report is both an ambitious roadmap and a call to action that aligns with India’s broader aspirations under the Amrit Kaal. It highlights critical themes that will build the future of the pharma sector: the potential of value-driven research and high-impact innovation, the creation of a seamless global pharma supply chain, and the pursuit of sustainable and equitable access to healthcare.”

Key findings from the CXO survey  

1.Focus areas for strengthening APIs and KSMs industry

The CXO survey revealed a consensus among experts: India has significantly advanced its journey toward self-reliance in APIs and KSMs over the past years. The focus now must be on developing methods that reduce costs, improve productivity and minimise environmental impact. 

75 per cent emphasised that the future of India’s API industry lies in embracing sustainable practices, considering that the industry is capital and resource-intensive. 63 per cent believe it is crucial to build infrastructure and efficiency, whereas 38 per cent said exploring new cost-effective materials and manufacturing processes can help move up the client value chain. Experts also underscored that ‘quality’ and a ‘skilled workforce’ are fundamental for the industry’s future.

2. R&D and innovation imperative

CXOs also emphasised the need to establish a robust innovation ecosystem but securing investments continues to be a significant hurdle. As a result, 48 per cent of leaders think it’s important to have increased financing, such as seed funding for start-ups/BioTechs and patient funding from private equity partners.

3. Towards Indian CRDMO market dominance: 

The future of India’s CRDMO industry hinges on several pivotal themes, as revealed in the CXO survey. 80 per cent eof xperts unanimously agreed that while enactment of the US BIOSECURE Act could open a new window of opportunity, the Indian industry must elevate its scale and efficiency to match global leaders. 

60 per cent of CXOs said specific focus is required to build scale and infrastructure in the biologics space to capture the large market that would open up with the upcoming patent expiry of some of the big blockbusters. 80 per cent think it is important to invest in advanced manufacturing tech, e.g., continuous manufacturing for cost-efficiencies and speed. 

4. Quality milestones transforming pharma for the future

The collective insights from industry experts outline the need for a robust quality culture, enhancing detection mechanisms, and striving for global quality standards. 

63 per cent of CXOs highlighted the need for a single global product standard, which would not only improve the quality of pharmaceuticals but also streamline manufacturing processes and elevate compliance levels. 50 per cent said that a culture of quality and compliance is critical to maintaining high standards, and this should be driven by the top. There should be transparency in all reporting. 

Experts also emphasised the importance of mandatory quality standards for all MSMEs and small pharmaceutical manufacturers, claiming this would help strengthen the industry’s foundation. Digitalisation and automation were called out as the way forward to ensure data integrity and compliance. 

5. Elevating healthcare: Key strategies for affordability and access

The CXO survey found that technology and digital integration are key to addressing healthcare affordability and accessibility challenges. 75 per cent emphasised the need for ‘new financing models and patient education’. ‘Innovative financing mechanisms and healthcare delivery models’ was called out by 38 per cent of leaders as the second most crucial element needed to close the gap between the current state and the desired state of healthcare. 38 per cent also feel it is important to put patients at the centre of all healthcare initiatives, by ensuring they are informed and engaged in all decision-making processes. 

6. Nurturing talent for pharma innovation and leadership

Highlighting the availability of a skilled talent pool as a critical concern, 67 per cent CXOs said there is limited talent with deep sector knowledge. 50 per cent highlighted that graduates, including those with bachelor’s and master’s degrees, frequently lack the hands-on experience that is critical for success in the pharmaceutical sector.

With fewer students entering scientific fields, there is an urgent need for initiatives that promote careers in science and pharmacy. Experts emphasised the necessity for a shift from producing generalists to cultivating specialists with deep therapeutic area expertise, capable of managing niche therapies and personalised medicines.

Digitally enabled healthcare: Bridging gaps, building connections and improving outcomes

The insights from industry experts on digital healthcare in India further underscored the critical role of digital in transforming healthcare delivery and enhancing patient outcomes. Some of the use cases shared by experts included the potential of digital health in revolutionizing last-mile delivery, making healthcare accessible even in the most remote areas. Experts also advocated for a sustained emphasis on the successful adoption of the Ayushman Bharat Digital Mission and the implementation of policies that mandate and enable digital adoption across both public and private healthcare sectors. 

*To identify the future direction of the industry and develop concrete action items, OPPI and EY conducted primary research with 25 CXOs of leading Indian and global multinational pharma companies, CRDMOs, academic institutions and other organizations.