The Covid disruption has handicapped the global market extensively resulting to numerous challenges in supply chain in Changed Indian Pharma of essentials, but an upsurge in the healthcare sector significantly to the Pharma Industry. According to the IQVIA’s 2019 Global Use of Medicine 2019 report, the amount of money spent on buying medicines across the world will exceed $1.4 trillion by the end of 2021. India`s nutraceutical industry is predicted to grow to $18 billion by 2025 from $4 billion in 2017 and furthermore, expected to hold at least 3.5% of global market share by 2023. There has been a historical use of nutraceuticals in India since many consumers believe in holistic treatment. On the global level, the nutraceuticals market is expected to grow by a CAGR of almost 9% during 2020-2024. Increasing awareness about health and preventive strategies has made people conscious about their immunity and general well-being, thus increasing the demand for immunity boosters across the globe. Dietary supplements alone constitute almost 65% of the nutraceutical market and is growing at a fast rate of 17% attributable to the focus on preventive health in the current pandemic.
Price erosion to supply security
In the crucial market of the US, which accounts for 30% to 40% of total revenues of most leading Indian pharma companies – the likes of Sun Pharma, Dr Reddy’s, Lupin, Zydus Cadila among others, severe price erosion has been a problem for a few years now. This is now stabilizing.
As compared to price erosion running into the mid-teens two years back, it is now down around 3 to 5%. Also, demand for medicines today is guided more by concerns around supply security than on incremental price discounts. Both these, augur well for companies seeking growth at a time when the Indian market (as the table shows) is seeing lower growth rate after emerging out of one of the most severe lockdowns.
Ringfencing supply chain
But irrespective of what the government does, Indian companies hitherto dependent on China completely for drug ingredients are busy ringfencing their supply chain. Krishna Prasad Chigurupati, chairman and managing director of Hyderabad-based Granules India, which is a leading player in some of the drugs that form the first line of treatment for fever, pain and for diabetes, said, “As a company for several years now we have been investing in innovative technologies to make KSMs and these make for 80% of all our imports. Ideally, we would have liked to make these ourselves but because of COVID we have hastened the process and are giving the technology to other companies within India and entering into long-term supply arrangements.”
Sailing through tough days
The Changed Indian Pharma hit all equally but not all could sustain the effect in the same manner. The Pharma Industry although wounded, managed the crisis astoundingly well with great crisis responses. Digital Marketing was a weak spot for the Pharma fraternity, but with the robust online presence in these crucial times, partnering with the right providers helped the crisis management processes run smoother dealing with rapidly evolving practices. Companies around the world are suffering from event cancellations preventing pharma companies to introduce new products and services. Digitalization in the Pharma world incorporated learning into future crisis plans and processes.
According to the All India Organization of Chemists and Druggists (AIOCD) – AWACS report, Indians bought almost Rs 15,000-crore worth of vitamin supplements and other immunity boosters in Jan 2020-May 2021, more than the preceding year, as demand of drugs related to Covid-19 treatment increased, directly and indirectly.
