Key Announcements:
- Announcement 1: R&D Centers of Excellence
- “Facilities in select ICMR labs will be made available for research by public and private medical college faculty and private sector R&D teams for encouraging collaborative research and innovation.”
- “A new programme to promote research and innovation in the pharma sector will be taken up through centres of excellence.”
- “We shall also encourage industry to invest in research and development in specific priority areas.”
Impact & Growth Opportunities:
- Along with being a leading supplier of generics and vaccines globally, India is moving up the value chain in the Life Sciences sector. R&D-focused incentives will remain critical to promoting investments in innovation, and outcomes-based financing will drive public-private partnerships (PPPs).
- Leading domestic pharma companies like Glenmark Pharma are developing and out-licensing new chemical entities (NCEs) and new biological entities (NBEs). To further accelerate R&D investments for new drugs, the government should consider the provision of Research-linked Incentive Schemes.
- With changing trial dynamics and a focus on nutrition, Indian CROs like Vedic Lifesciences, offering customized services with a considerable cost advantage, will make the country highly profitable for outsourcing.
1. Agile Partnership Models for Drug Discovery and Pre-clinical Drug Testing Services – CROs such as Syngene International, Aragen Life Sciences, Veeda Clinical Research, Aurigene Pharmaceutical Services, etc., specialize in drug discovery and pre-clinical services, including chemistry and biology studies, BA/BE, immunogenicity, etc., establishing themselves as potential partners for sub-contracting.
2. Collaborations and R&D investment in advanced therapies – Bio-CDMOs like Piramal Pharma Limited can align themselves as co-development partners for antibody drug conjugates (ADCs), whereas emerging biotech like Regrow Biosciences continues to focus on the innovation and commercialization of cell therapies.
- Announcement 2: Digitization in Pharma
- “Leading industry players will partner in conducting interdisciplinary research, develop cutting-edge applications and scalable problem solutions in the areas of agriculture, health, and sustainable cities. This will galvanize an effective AI ecosystem and nurture quality human resources in the field.”
- “There will also be dedicated multidisciplinary courses for medical devices to be supported in existing institutions to ensure availability of skilled manpower for futuristic medical technologies, high-end manufacturing and research.”
Impact & Growth Opportunities:
- With the launch of the Centers of Excellence, artificial intelligence is emerging as the focal point of India’s primary vision of “Make AI in India” and “Make AI work for India.” The country is well-positioned to build a digital ecosystem, paving the way for demand-based skill development. Thirty Skill India International Centers will be established to build expertise in local youth, providing holistic support to the vision.
- As a part of the revamped Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0 initiatives, courses in artificial intelligence, drone technology, 5G-driven applications, IoT, and coding, among other areas, will allow the country to tap into the 5 million+ IT workforce in India.
1. Capability Expansion for Continuous Manufacturing – Cipla is among the first movers in India and Asia to be recognized for adopting advanced fourth industrial revolution technologies to digitally transform manufacturing operations. An ecosystem comprising equipment manufacturers, system integrators, pharma and CDMOs can work toward promoting continuous manufacturing setups in the country.
2. Digital Health Services in Pharma – Dr. Reddy’s is one of the leading Indian pharma companies pushing for digital transformation. The company aims to establish itself as a cloud-native organization and achieve over 70% workload transformation to the cloud by 2025. As a part of its digital transformation, it is working toward a collaborative model, essentially bringing together doctor consultations, pathology laboratories, diagnostic services, and pharmacies. Therefore, despite massive IT layoffs, patient-centric care will provide domestic job opportunities in digital health services.
Overall Impact: Positive
Overall Analysis: With an FDI of over $19 billion up to 2022, an outlay of $26.5 billion as a part of the PLI scheme (covering 13 sectors), and an expected $419.2 million investment in R&D in 2023, the Indian pharmaceutical industry is set to witness growth in 2023. Additionally, with investments in R&D, the budget is a precursor to the strategic imperatives driving the Prime Minister’s vision of Universal Healthcare, the “Atmanirbhar Bharat” vision for innovation in advanced therapies, and the G20 Presidency agenda of healing, harmony, and hope. Moreover, the announcements provide continuity to the “Pharma Vision 2020,” initiated by the Department of Pharmaceuticals, which aims to position the country as a global hub for end-to-end drug discovery.
While essential active pharmaceutical ingredients (API) have been overlooked in the recent announcement, Frost & Sullivan predicts that API unicorns will rise in India under PLI schemes, attracting an estimated $60 million+ investment in 2023. The scheme aims to enhance India’s manufacturing capabilities by boosting investment and production in the sector, contributing to product diversification of high-value goods, and maintaining self-sufficiency in API production. Further, with India’s green energy push, sustainability initiatives will support companies’ efforts in terms of alignment with their long-term net-zero emission goals. Overall, the budget announcements boost India’s image as a pharma innovation hub while providing immunity against geopolitical chaos.
Learn more from our upcoming analysis on the “Asia Pacific Pharmaceutical Outlook, 2023” and schedule a Growth Pipeline Dialog™ with our #Healthcare and #LifeSciences experts and coaches to dive into the growth priorities for your organization in 2023 and beyond.
