Comrades Editorial · 11 Sep 2026 (PDF)
In this edition
- Revitalising India’s Pharma Sector Health & Medicine
Health & Medicine
Revitalising India’s Pharma Sector
Source This editorial is based on “A dose of innovation” published in the Business Standard on 09/09/2026. The article highlights that India must transition from low-cost generics to biopharmaceutical R&D by securing API supply chains, enforcing strict quality standards, and balancing intellectual property incentives with equitable access to universal healthcare. India must bridge generic manufacturing with biopharmaceutical innovation by securing Active Pharmaceutical Ingredients (APIs) supply chains, tightening compliance, and aligning intellectual property (IP) with public health. Rejecting a false choice between innovation and affordability, India can build an ecosystem where IP incentives, patient capital, and predictable regulations drive novel drug discovery, while price controls and generic competition protect universal healthcare equity. What are the Key Developments Shaping India’s Pharma Sector?- Expansion to a Global Supply Hub:
- India’s large manufacturing base, cost-efficient production and scientific workforce have made it a major supplier of generic medicines, vaccines and affordable formulations.
- India is the world’s 3rd-largest pharmaceutical producer by volume (11th by value), supplying nearly 20% of global generic medicines and a substantial share of global vaccine demand.
- Pharmaceutical exports were valued at approximately ₹2.46 lakh crore in FY 2024–25, compared with imports of nearly ₹63,573 crore.
- Indian companies such as Sun Pharma, Dr. Reddy’s Laboratories, Cipla, Lupin and Aurobindo Pharma have established manufacturing and distribution networks across the US, Europe, Africa and emerging markets.
- Reducing Import Dependence for API and KSM:
- The PLI Scheme for Bulk Drugs incentivises domestic production of 41 critical bulk-drug products, including fermentation-based and chemically synthesised APIs.
- 3 Bulk Drug Parks are being developed in Gujarat, Himachal Pradesh and Andhra Pradesh with common facilities for testing, solvent recovery, effluent treatment and utilities.
- Domestic production of products such as penicillin-G, clavulanic acid, rifampicin and fermentation-based APIs is being revived to improve health-security preparedness.
- Transition from Volume-Based Generics to Value-Based Innovation:
- The Promotion of Research and Innovation in Pharma-MedTech Sector (PRIP) Scheme seeks to encourage industry-led research and collaboration between companies and academic institutions to develop new chemical entities, novel drug-delivery systems, peptides, long-acting injectables and complex inhalation products.
- Centres of Excellence in National Institutes of Pharmaceutical Education and Research are focusing on antiviral and antibacterial drug discovery, medical devices, bulk drugs and flow chemistry.
- E.g., Sun Pharma’s specialty-drug portfolio, including treatments in dermatology and ophthalmology, demonstrates the movement from high-volume generics to high-margin speciality products.
- Growth of Biologics, Biosimilars and Next-Generation Vaccines:
- The expiry of patents on several global biological medicines is creating opportunities for India in biosimilars, recombinant products, cell-based therapies and advanced vaccines.
- Biocon Biologics has developed a global portfolio of biosimilars covering insulin, monoclonal antibodies and treatments for cancer, diabetes and autoimmune diseases.
- Serum Institute of India, Bharat Biotech and Biological E demonstrate India’s capability in vaccines ranging from Covid-19 vaccines to Rotavac, Corbevax and low-cost HPV vaccines.
- The BioE3 Policy, 2024 (Biotechnology for Economy, Environment and Employment) promotes high-performance biomanufacturing, including precision biotherapeutics, smart proteins and cell and gene therapies.
- Strengthening Quality Regulation and Global Compliance:
- Product recalls, regulatory warnings and differences in enforcement across states have increased the emphasis on Good Manufacturing Practices, data integrity and pharmacovigilance.
- The revised Schedule M of the Drugs Rules, 1945 aligns Indian manufacturing requirements more closely with WHO-GMP standards, covering pharmaceutical quality systems, risk management, equipment validation and documentation.
- The Pharmacovigilance Programme of India monitors adverse drug reactions and strengthens post-market surveillance.
- Compliance with the USFDA, European Medicines Agency and other stringent regulatory authorities is increasingly becoming a competitive requirement rather than merely an export formality.
- Digitalisation, AI and Data-Driven Drug Development:
- Artificial intelligence, genomic databases and real-world health data are transforming drug discovery, clinical trials, manufacturing and personalised medicine.
- Indian companies and start-ups such as Innoplexus, Bugworks Research and Qure.ai demonstrate the growing use of AI and computational platforms across drug discovery and healthcare.
- The GenomeIndia Project has created a reference dataset based on whole-genome sequencing of over 10,000 individuals representing 83 population groups, supporting research into population-specific diseases and precision therapeutics.
- Digital twins, continuous manufacturing, robotic laboratories and Process Analytical Technology are also shifting pharma production from batch-based quality testing towards real-time quality assurance.
- Deepening Domestic Access through Affordable Generics and Public Procurement:
- India’s pharma sector is increasingly shaped by the need to balance export growth with universal, affordable and equitable access to medicines.
- More than 20,000 Pradhan Mantri Bharatiya Janaushadhi Kendras were operational till June 2026, with the network targeted to reach 25,000 by March 2027.
- They provide quality-assured generic medicines that are generally 50–80% cheaper than comparable branded products, lowering out-of-pocket expenditure.
- The expansion of Ayushman Bharat–PM-JAY, government hospital procurement and Jan Aushadhi is creating large-scale institutional demand for affordable medicines.
- Emergence of Contract Research, Green Manufacturing and Diversified Export Markets:
- India is evolving from a supplier of finished generics into an integrated destination for Contract Research, Development and Manufacturing Services (CRDMO).
- Firms such as Syngene International, Piramal Pharma Solutions and Divi’s Laboratories illustrate India’s expansion into high-value contract research and custom synthesis.
- Diversification towards Europe, Latin America, Africa and Asia is becoming important because dependence on the US exposes Indian exporters to price erosion, regulatory action, tariff uncertainty and concentrated-market risks.
- Shift to Indigenous Antibiotic and Biopharma Innovation:
- India is advancing from a volume-driven manufacturing towards discovery-led, intellectual-property-intensive pharmaceuticals.
- Nafithromycin (Miqnaf), developed by Wockhardt with BIRAC support, is India’s first indigenously developed macrolide antibiotic, designed to treat drug-resistant infections.
- Zaynich (cefepime–zidebactam) represents another major achievement against multidrug-resistant Gram-negative bacteria.
- The Biopharma SHAKTI Mission aims to develop domestic biologics and biosimilars, establish 3 new National Institutes of Pharmaceutical Education and Research (NIPERs), create over 1,000 accredited clinical-trial sites and strengthen the CDSCO’s scientific-review capacity.
- Persistent Dependence on Imported APIs and KSMs:
- India reportedly imports nearly 70% of its APIs and Key Starting Materials (KSMs) from China, creating a profound structural dependency beneath its strength in generic formulations.
- Dependence is particularly high for fermentation-based APIs and intermediates used in antibiotics and vitamins, including penicillin-G, cephalosporins, erythromycin and vitamin-C.
- This exposes India to export restrictions, geopolitical tensions, freight disruptions, currency volatility and sudden price escalation, potentially affecting the availability of essential medicines.
- Quality Failures and Reputational Risks:
- Cases involving substandard, contaminated or improperly manufactured medicines threaten patient safety and weaken confidence in India’s “Pharmacy of the World” credentials.
- Indian-made cough syrups were linked to child deaths in countries including Gambia and Uzbekistan, with WHO alerts identifying contamination by diethylene glycol and ethylene glycol.
- Fragmented and Uneven Regulatory Enforcement:
- India’s pharmaceutical regulation suffers from divided responsibilities between the Central Drugs Standard Control Organisation and State Drug Control Authorities, leading to variations in inspection quality and enforcement.
- States issue manufacturing licences, while the Centre regulates new drugs, imports and several specialised products, creating scope for regulatory arbitrage and inconsistent supervision.
- The absence of a fully harmonised national recall mechanism can delay the removal of defective medicines from multiple state markets.
- Low Research Intensity and the “Generic Trap”:
- India’s pharmaceutical industry excels in generic formulations and process chemistry but struggles to produce original drug discoveries due to scarce risk capital and lengthy timelines.
- Consequently, the nation lags behind in globally successful New Chemical Entities, patented biologics, and first-in-class therapies.
- Weak industry–academia linkages, fragmented research infrastructure and limited commercialisation of university patents create a “lab-to-market valley of death.”
- Export Concentration and External Market Vulnerability:
- India’s pharmaceutical exports are exposed to regulatory, commercial and geopolitical developments in a limited number of major markets.
- The United States accounts for nearly one-third of India’s pharmaceutical exports, creating vulnerability to USFDA observations, pricing pressure, procurement changes and tariff uncertainty.
- E.g., warning letters, import alerts or plant-level compliance failures can disrupt the exports of an entire manufacturing facility and damage confidence in other Indian suppliers.
- Pharmaceutical exports reached approximately USD 30.5 billion in FY 2024–25, but competition in ordinary generics has produced persistent price erosion and narrowing profit margins.
- Antimicrobial Resistance and Irrational Drug Use:
- The widespread availability and inappropriate consumption of antibiotics are contributing to Antimicrobial Resistance (AMR), reducing the effectiveness of medicines produced by the sector.
- The ICMR Antimicrobial Resistance Surveillance Network has reported high resistance among pathogens such as E. coli, Klebsiella pneumoniae and Acinetobacter against commonly used antibiotics.
- Weak enforcement of Schedule H, H1 and X prescription requirements, coupled with limited antibiotic stewardship in hospitals, turns pharmaceutical access into a public-health risk.
- A growing “pill-popping” culture, marked by self-medication, over-the-counter antibiotic purchases and incomplete treatment courses, further promotes irrational drug use and accelerates AMR.
- Affordability–Innovation–Access Trilemma:
- India must simultaneously keep essential medicines affordable, encourage pharmaceutical innovation and ensure commercial viability, objectives that can conflict with one another.
- According to the National Health Accounts 2021–22, out-of-pocket expenditure still constituted approximately 39.4% of total health expenditure, making medicine prices a major household concern.
- While the Drug Price Control Order, 2013 and National Pharmaceutical Pricing Authority regulate essential-medicine prices, high prices persist for many cancer drugs, biologics, orphan drugs and patented therapies.
- Aggressive price control may improve short-term access but can discourage investment in complex generics and novel therapies unless supported by public procurement, insurance coverage and innovation incentives.
- Adopt a Mission-Based API Sovereignty Model:
- India should replace broad production incentives with a molecule-specific security strategy for APIs and KSMs where import concentration creates critical health vulnerabilities.
- Government hospitals should offer long-term offtake guarantees for domestically produced penicillin-G, cephalosporins, erythromycin, vitamin intermediates and other critical fermentation products.
- India should develop shared bioreactors, solvent-recovery systems, effluent-treatment plants and uninterrupted utility infrastructure to make domestic API production cost-competitive.
- Create a Unified National Pharmaceutical Regulatory System:
- India should reduce fragmented enforcement by integrating central and state regulatory functions through a common digital regulatory architecture.
- Every factory, production line, laboratory and medicine batch should receive a Unique Pharmaceutical Identification Number, enabling end-to-end traceability from raw-material supplier to retailer.
- A national e-inspection platform should randomly allocate inspectors, record inspection findings digitally and trigger risk-based audits using past violations, recalls and adverse-event data.
- Establish a Sovereign Pharmaceutical Innovation Fund:
- India needs a patient-capital institution that shares the exceptional financial risk involved in developing new chemical entities, biologics and advanced therapies.
- Funding should follow a milestone-based model, with public support released after successful completion of target validation, pre-clinical studies and successive clinical-trial phases.
- A patent-box tax regime may offer lower taxation only on income derived from pharmaceutical intellectual property researched and substantially developed in India.
- Build an India Health-Data and Clinical-Trial Commons:
- India should use its genetic and epidemiological diversity to become a trusted centre for inclusive, ethical and data-driven clinical research.
- Trials should include adequate representation of women, elderly persons, tribal communities and patients with multiple diseases, improving the applicability of treatment outcomes.
- An anonymised, federated platform could integrate data from public hospitals, disease registries, Ayushman Bharat and research institutions without transferring identifiable patient information.
- Develop Shared Platforms for Biologics and Advanced Therapies:
- India should create common infrastructure that allows smaller firms and research institutions to enter capital-intensive segments such as biosimilars, mRNA vaccines and cell and gene therapies.
- Regional facilities should provide shared GMP-grade pilot manufacturing, cell-line development, bioassay, toxicology and cold-chain validation services.
- This would help India capture the opportunities emerging from the global patent expiry of high-value biologic medicines, rather than remaining concentrated in ordinary generics.
- Pursue Regulatory Diplomacy and Export Diversification:
- India should treat pharmaceutical standards as an instrument of trade policy and reduce excessive dependence on a few export destinations.
- India should negotiate mutual-recognition and reliance arrangements for inspections, pharmacopoeial standards and marketing approvals with the EU, UK, Japan, Africa, Latin America and ASEAN.
- Regulatory support cells within Indian missions should help MSMEs understand foreign approval systems, tenders and intellectual-property requirements.
- An early-warning platform should track foreign regulatory changes, patent expiries, medicine shortages and procurement opportunities.
- Institutionalise Value-Based Pricing and Equitable Access:
- A transparent Health Technology Assessment framework should compare a medicine’s clinical benefit, cost-effectiveness and impact on public health before determining procurement or reimbursement prices.
- For high-cost cancer, rare-disease and biological medicines, India can adopt outcome-based contracts, under which manufacturers receive full payment only when agreed treatment outcomes are achieved.
- Mandatory disclosure of the ex-factory price, distributor margin and retail margin would discourage excessive mark-ups in branded generics.
- Voluntary licensing, patent pools and government-supported domestic manufacturing should be used to expand access where patented medicines remain unaffordable.
- Introduce a Green and AMR-Sensitive Pharma Framework:
- Antibiotic-manufacturing units should be subjected to enforceable residue-discharge limits, continuous effluent monitoring and public disclosure of environmental performance.
- A Green Pharmaceutical Rating should assess water use, solvent recovery, carbon intensity, antibiotic discharge and waste management, with public procurement favouring higher-rated manufacturers.
- Linking industrial pollution data with the ICMR Antimicrobial Resistance Surveillance Network would help identify environmental hotspots where antibiotic residues are accelerating drug resistance.
- India must evolve from a volume-based generic producer into a global hub for biomedical innovation, biologics, and precision medicine. Rather than replacing generics, which remain a vital national capability, India should leverage them to fund higher-value research. By balancing intellectual property incentives with affordable access, stringent quality standards, and patient capital, India can secure API sovereignty. Ultimately, this integration will allow the nation to remain the pharmacy of the world while emerging as an innovation laboratory for humanity.