Strategic Advantages for Investors in the Generic Market of India?

General
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India, as the “Pharmacy of the World,” offers global generic markets strategic advantages for investors, especially those seeking exposure to high-growth and cost-efficient returns.

Here are a few reasons why investors should pay attention:

  1. Global demand and cost leadership - The ability of the Indian Pharma giants to produce high-quality and low-cost medicines keeps up with the consistent global demand. India supplies about 20% of the global generics (40% in the US and 20% in the UK) and 50 % of the global vaccine demand.
  2. Export-driven Revenue - About 60 to 80 % of the revenue earned by these Pharma Firms is through exports, especially through the regulated markets like the US, EU and Africa.
  3. Regulatory Strength - Apart from the manufacturing plants of the US, Indian companies hold the highest number of US FDA-approved plants, which ensures access to the premium markets is available.
  4. The Innovation Pipeline - Companies like Sun Pharma, Cipla, Biocon, and Dr Reddy’s are focusing on areas such as complex generics, biosimilars, and novel drug delivery systems. This gives them an area for long-term growth and margin expansion.

With so many advantages, what do you think are the reasons for under-investment by Indian investors in Pharma firms?

MBH/AB

1 Like
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Even though India is a global powerhouse in generics and vaccines, many domestic investors still hesitate due to concerns like regulatory hurdles, pricing pressures, or patent disputes. The good news is that initiatives like the Government’s PLI scheme for APIs and the PRIP scheme for complex generics and biosimilars are giving the industry a real boost.

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Most of the time, the problems lie in the regulations and rules. Let’s hope that in the future, more Indian investors will invest in pharmaceutical firms.