Budget 2024: Pharma industry hopes to get better incentives for R&D

To achieve the goal of expanding India's pharmaceutical industry to $120-$130 billion by 2030 and increasing its global market share to 7%, the industry has requested additional government incentives to boost R&D investment. The aim is to enhance both export growth and self-reliance in the long term.

Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, emphasized the need for a supportive ecosystem and favorable policies. He said, “The focus needs to be on creating an ecosystem and a set of policies that are conducive for the industry to invest more in R&D and innovation, enhance quality standards to increase its market accessibility in export markets and become self-reliant in the years to come.”

He further added, “This approach will help solidify India's status as the top producer by volume and among the top three by market value by 2047.”

Currently, the knowledge-driven Indian pharmaceutical industry is valued at $50 billion, holding a 3.6% share of the global market by value. Statista's data projects that domestic pharmaceutical revenue will reach $13.16 billion in 2024, with an expected growth to $16.56 billion by 2029 at a compound annual growth rate (CAGR) of 4.70%.

A massive opportunity for India to turn the tide

India is the largest producer of generic drugs globally, supplying 20% of the total global generics volume to over 200 countries. It also supplies around 60% of the total global vaccine requirement, contributing 40% to 70% of the World Health Organisation's (WHO) demand.

The industry further contributes about 2% to India’s gross domestic product (GDP), while creating employment for around 3.5 million people in the country.

Industry body Organisation of Pharmaceutical Producers of India (OPPI), which represents various global research-based pharma firms in India, is optimistic about continued reforms in policies aimed at bolstering innovation in the industry and streamlining its regulatory processes.

Additionally, Matai also pitched for establishing an effective intellectual property (IP) rights regime, which is critical for driving growth and encouraging research-based pharma companies, both global and Indian, to introduce innovative therapies in India towards addressing unmet medical needs.

OPPI had made representations to the finance ministry during consultations for the Budget 2024.

With only a few weeks away, the pharma industry will be anticipating what benefits they get in the Union Budget 2024. Let’s see what happens.