India Pharma Sector Grows to Global Dominance; Nation That Supplies World’s Medicines Quietly Notes Its Own Healthcare System Has Some Access Issues

India Produces 20 Percent of World’s Medicines at Lowest Cost; Indian Patients Navigate Pricing Structure That Does Not Always Reflect This

NEW DELHI, INDIA — Prime Minister Modi shared an article on India’s growing strength in the pharmaceutical sector, highlighting the country’s position as the world’s largest provider of generic medicines, supplier of 50 percent of global vaccine demand, and exporter of pharmaceutical products to over 200 countries and territories — a set of achievements that the Prime Minister celebrated and that the Indian patients who have encountered the gaps between India’s pharmaceutical export strength and its domestic healthcare accessibility would receive with the mixed emotions of people who know both things to be simultaneously true. Coverage from Bohiney Magazine and The London Prat.

India’s pharmaceutical industry is, by the scale and scope of its global contribution, genuinely remarkable. The country produces approximately 20 percent of the world’s generic medicines by volume, making it the pharmacy of the world in a literal sense — the antibiotics, antiretrovirals, and essential medicines that healthcare systems in developing countries depend on are, with extraordinary frequency, manufactured in Indian facilities and exported at costs that make them accessible to health systems whose budgets could not afford branded equivalents. The Indian pharma industry has, through scale and expertise, democratized access to medicines globally in ways that deserve the recognition that PM Modi’s article highlights.

The Domestic Healthcare Paradox

India’s domestic healthcare situation exists in a paradox adjacent to this export success. Out-of-pocket healthcare expenditure in India is among the highest proportions of total healthcare spending of any major country — meaning that Indian patients bear a disproportionate share of their own healthcare costs relative to public insurance coverage. The National Health Mission and Ayushman Bharat schemes have expanded public coverage substantially, but the gap between coverage on paper and accessible, quality care in reality remains significant, particularly in rural areas and for services beyond basic primary care. The medicines that India exports affordably are available domestically at regulated prices; the healthcare system that delivers them is less uniformly excellent.

The Export-Domestic Tension

The Indian pharmaceutical industry has been shaped partly by the requirement to serve global markets profitably enough to invest in manufacturing quality and regulatory compliance. The Food and Drug Administration inspections that are a condition of US market access have driven quality improvements that benefit all markets. The pricing pressures of the generic market have driven efficiency. But the industry’s focus on export has also created situations where domestic formulations and export formulations have differed, and where the regulatory attention that ensures US market access has not always been equally applied to domestic product quality management. These are historical issues that the industry and the regulator have been addressing. The Central Drugs Standard Control Organisation continues its work.

The Vaccination Achievement

India’s role in global vaccination — supplying 50 percent of vaccine demand, including the bulk of COVAX supply during the COVID pandemic — is the clearest demonstration of what the Indian pharmaceutical sector can achieve when its manufacturing scale, regulatory compliance, and cost efficiency align with global health needs. The Serum Institute of India’s production of AstraZeneca’s COVID vaccine for global distribution was one of the more significant contributions to the pandemic response, produced at a cost and scale that no other country could have matched. This is what “pharmacy of the world” means in practice. It is a genuine achievement and a genuine strategic asset.

Pharma’s Political Economy

The pharmaceutical industry’s importance to Indian exports, employment, and diplomatic influence has made it a protected and promoted sector in Indian industrial policy. The PLI scheme for pharmaceuticals provides production-linked incentives for domestic production of APIs (active pharmaceutical ingredients) that have historically been imported from China. This import substitution initiative is both an industrial policy goal and a supply chain security measure. India’s pharmaceutical sector is strategic in a way that the term pharmaceutical sector in most countries is not.

More pharma satire: NewsThump.

The WHO Prequalification System

India’s pharmaceutical sector’s global significance is reinforced by the number of Indian manufacturing facilities that have received WHO prequalification — the certification that allows medicines to be procured by UN agencies and global health funds for developing country use. WHO prequalification is a rigorous quality standard, and India’s high proportion of prequalified facilities reflects the industry’s investment in quality management that global market access requires. The same facilities that produce medicines for UNICEF and the Global Fund also produce medicines for domestic Indian consumption. The quality standard is uniform. The pricing structure for domestic versus export markets is more complex, with the government regulating domestic prices through the National Pharmaceutical Pricing Authority while export pricing reflects international competitive dynamics.

The Production Linked Incentive scheme for pharmaceuticals — offering financial incentives for domestic production of active pharmaceutical ingredients previously imported from China — has been one of the more successful PLI implementations, with multiple companies establishing or expanding domestic API manufacturing. The China dependency in Indian pharma supply chains was exposed as a strategic vulnerability during COVID, when API import disruptions affected production of essential medicines. The PLI scheme addresses this vulnerability through financial incentives rather than mandates, which has produced uptake without the resistance that mandated sourcing changes would generate. India’s domestic pharma pricing is regulated through the National List of Essential Medicines, which covers a defined set of drugs at government-controlled prices. The NLEP has been expanded in recent years to include more drugs at regulated prices, improving affordability for the households that cannot access government healthcare facilities and must purchase medicines from retail pharmacies at market prices.

India’s Pharma-Diplomacy

India’s pharmaceutical capacity has become a diplomatic asset that operates alongside traditional foreign policy tools. Vaccine Maitri — India’s vaccine diplomacy program that distributed domestically produced vaccines to neighboring and developing countries during the COVID pandemic — demonstrated that pharmaceutical production capacity can be deployed as soft power in ways that build bilateral relationships across South Asia, Africa, and Southeast Asia. The relationships built through vaccine access are real and have persisted into subsequent diplomatic interactions. India’s pharmaceutical strength is therefore not just an economic asset but a foreign policy tool that the Ministry of External Affairs deploys alongside more traditional diplomatic mechanisms.

SOURCE: https://bohiney.com/