December 9, 2023

Healthcare Global

Splash Healthcare Global All Over

Here’s how India’s G20 presidency can help the country’s huge pharma sector – BusinessToday

The covid-19 pandemic in 2020 was an unexpected boon for India’s drugs and pharmaceuticals industry: foreign direct investment (FDI) shot up by 188 per cent to $1.5 billion in 2020-21 from $517 million in 2019-20.

The FDI came into India’s manufacturing prowess in vaccines. The next year, FDI slipped by 5 per cent but surged by 46 per cent in 2022-23.

All this is good news for India’s presidency of the G20 bloc. The G20 presidency, say industry experts, has given centre stage to India, reaffirming its position as a leading player in healthcare and pharmaceuticals.

And it is not just vaccines: over the past five years, top multinationals have been injecting FDI into India’s drugs and pharmaceuticals sector. The Indian pharma sector is the world’s largest provider of generic drugs, with 20 per cent of global exports in terms of volume, according to India Brand Equity Foundation (IBEF), the branding and communications body for trade and exports under the commerce and industry ministry.

Now it’s up to India’s corporates to grab big roles in the world pharma play.

Satish Reddy, Chairman of Dr. Reddy’s Laboratories Ltd, India’s second-largest pharma major by gross sales, says, “India’s G20 presidency plays a crucial role in strengthening the nation’s identity as the world’s pharma hub.”

The G20, a forum of the world’s advanced economies—including the European Union—and developing countries, currently has 23 members, which account for 85 per cent of the world’s GDP. It meets annually to discuss global issues.

Many Indian companies exporting generic products have cleared the US Food & Drug Administration’s quality standards, allowing them entry into the world’s biggest markets for generic drugs.

India is also scaling up its medical education sector, which has no shortage of students trying to get a berth (this year, 1.68 million will be jostling for 104,333 seats in 681 MBBS colleges at the qualifying NEET exam).

It has already met the World Health Organization’s ideal ratio of one doctor for a thousand people with its current ratio at 1:834. But, India’s ratio counts 565,000 AYUSH doctors, or those practising traditional medicine and homoeopathy.

For Prime Minister Narendra Modi, the one-year G20 presidency, which ends on November 30, 2023, allows India to focus on three priorities in healthcare: preventing and responding to health emergencies, strengthening co-operation in the pharmaceuticals sector—in which India has built an enviable production base—and digitalising health innovations aimed at universal coverage.

“The G20 summit acts as a platform that brings like-minded people and stakeholders together to discuss potential opportunities for international collaborations for an effective global healthcare ecosystem,” says Reddy.

According to data analysis website Statista, the healthcare sector in India got over $33 billion as FDI from April 2000 to March 2023. In this sector, drugs and pharmaceuticals grabbed the biggest share.

Glenn Saldanha, Chairman and Managing Director of Glenmark Pharmaceuticals, No. 9 by sales, says, “With an ecosystem of world-class talent, cutting-edge research, and robust manufacturing capabilities, we are poised to play a pivotal role in shaping the future of healthcare.” Saldanha says the industry needs to work towards fair and transparent regulatory frameworks so that patients worldwide can get affordable, high-quality medicines.

According to the Indian government’s Economic Survey for 2022-23, the domestic pharmaceuticals market is expected to grow to $130 billion by 2030.

Through the Covid-19 pandemic, India provided vaccines, essential medicines and supplies such as personal protective equipment (PPE) to several nations, supporting the COVAX initiative and using vaccine supplies as a diplomatic tool.

Reddy says the pandemic highlighted the need to promote R&D of crucial technologies and products in diagnostics, vaccines and therapeutics. To do this, academic institutions, international research organisations, and industry must collaborate, says Reddy.

India has to focus on reducing barriers to access and work on easing intellectual property rights and equitable pricing to make essential medicines more affordable and accessible. India must also project its robust regulatory environment, transparency and growth potential to invite substantial international investment into its healthcare and pharmaceuticals sector.

The FDI rush continues: in 2022-23, the FDI inflows into the pharma industry reached $2 billion, representing a CAGR growth of 67 per cent since 2018-19. In the first 11 months of calendar year 2022, the government had cleared 21 FDI proposals adding up to Rs 4,681 crore ($590 million), mostly for existing projects.

“India’s leadership in generic drugs and vaccine production necessitates concerted efforts to maintain its position and ensure high drug quality standards,” says Manoj Saxena, Managing Director of Bayer Zydus Pharma. “We are committed to addressing the priorities of the G20 Health Working Group, which includes prevention, preparedness and response to health emergencies,” says Saxena, also Country Division Head, South Asia for the Pharmaceuticals division of Bayer.

Clear decks for medical tourism

The G20 presidency is also expected to help India’s medical tourism sector. The Indian medical tourism market was valued at $2.89 billion in 2020 and is projected to reach $13.42 billion by 2026. According to the India Tourism Statistics at a Glance 2020 report, approximately 697,300 foreign citizens came to India for medical treatment during FY19 to get better care or avoid high costs or long waiting lines in their countries. India ranked 10th out of 46 destinations in the Medical Tourism Index (MTI) for 2020-21, as recognised by the Medical Tourism Association.

Siddhartha Bhattacharya, Secretary General of NatHealth, the healthcare federation of India, says medical tourism not only fetches foreign exchange but also improves the reputation of the destination hospitals. “The year 2023, under the G20 presidency, has the potential to be a landmark moment for healthcare, akin to India’s Y2K milestone in the IT sector back in 2000,” says Bhattacharya.

The Indian government has been investing heavily to improve the healthcare landscape. The Economic Survey 2021-22 says India’s public expenditure on healthcare was 2.1 per cent of gross domestic product (GDP) in 2021-22, compared with 1.8 per cent in 2020-21 and 1.3 per cent in 2019-20.

Lav Agarwal, Additional Secretary in the Union health ministry, says India is committed to the proposed priorities and pursuing a global consensus on flexible and coordinated global health architecture. “Integrating global initiatives for managing future health emergencies is essential for a more effective response and greater preparedness in the face of challenges,” says Agarwal.

Agarwal, also the G20 Health Track Focal Point, says co-branded events and side events are being hosted for each Health Working Group meeting, looking at emerging aspects such as medical value travel, the impact of climate change on health, and the application and relevance of traditional medicine. He says that creating a global medical countermeasures coordination platform is also on the agenda. Agarwal says that India’s initiatives, such as Co-WIN and Vaccine Maitri, have played a significant role in meeting global healthcare needs.

InfoTech has the code for growth

The Aarogya Setu app and the associated Co-WIN platform for tracking the coronavirus vaccination showed how digitalisation could revolutionise the healthcare setup. The Aarogya Setu app, introduced as a contact-tracing tool, became an online vaccination certificate for the Covid-19 vaccine. The app has been downloaded by over a billion people, and the government is now repurposing it for a broader healthcare role.

As the world’s leading IT hub, India can promote innovation in using artificial intelligence (AI), apart from telemedicine and electronic health records, opening up new prospects for Indian tech firms and start-ups, claim healthcare industry experts. Similarly, by promoting digital technologies, telemedicine, electronic health records and health data interoperability, India is expected to drive advancements in healthcare delivery, patient care and disease management. This can open up opportunities for healthtech start-ups and businesses in India, say industry experts.

Sidharth Srinivasan, CEO of Lupin Digital Health, a subsidiary of pharma major Lupin Ltd, says the G20 presidency is a golden opportunity to make digital health a reality for all. “With its world-class healthcare professionals and thriving consumer tech ecosystem, India is uniquely positioned to become the cradle of global healthtech innovation,” says Srinivasan.

As part of the “Digital India” project, the country has set up 638 e-Hospitals, effectively improving healthcare services nationwide.

The government says its eSanjeevani telemedicine service has been highly successful, hosting over 30 million teleconsultations by 2022 and breaking records with more than 170,000 consultations in one day.

Pavan Choudary, Chairman of the Medical Technology Association of India (MTaI), an organisation that represents the medical technology (medtech) industry in India, says that, by fostering an environment of strategic partnership and cooperation, “G20 countries can collectively address global healthcare challenges and drive advancements in medical technology solutions.”

how the G20 can provide a fix

The healthcare and pharmaceuticals sector has several hurdles to cross, such as disparities in quality and availability between urban and rural areas, the lack of a proper three-tier system, which sends patients rushing to research hospitals at the apex for simple surgeries, and prohibitive costs in the private sector.

In drugs and pharmaceuticals, maintaining quality standards is a challenge. Inadequate research and development investment limits innovation, while counterfeit drugs impact the industry. Integrating digital health solutions, raising public health awareness and addressing supply chain disruptions are additional hurdles.

But Mansukh Mandaviya, the Union Minister of Health and Family Welfare, is upbeat because he feels the G20 role will help India tackle many hurdles. “As part of India’s proposals, the agenda focusses on digital health and innovation to advance the use of technology in healthcare service delivery. The aim is to bridge the digital divide globally and promote digital public goods,” says Mandaviya.

India is now banking on its prowess in IT to help overcome some issues such as reaching quality healthcare to remote corners (with telemedicine), keeping records (like the Aarogya Setu app) and sharing best practices globally.