India’s G20 Presidency offers a pivotal chance to elevate its pharmaceutical sector. The pandemic-driven surge in FDI and global recognition of India’s role in healthcare underscore its potential. The nation’s leadership aims to enhance healthcare responses, bolster pharma cooperation, and advance digital health innovations. Leveraging IT capabilities, India can bridge healthcare gaps and promote global best practices. Challenges remain, but the G20 platform positions India to drive sectoral growth, medical tourism, and digital healthcare evolution.
The G20 presidency that India currently holds presents a unique opportunity to propel its burgeoning pharmaceutical industry to new heights, bolstering its position as the global pharmacy hub. The unexpected boon of the COVID-19 pandemic has significantly bolstered India’s drugs and pharmaceuticals sector, with foreign direct investment (FDI) surging by a remarkable 188% to $1.5 billion in 2020-21, compared to $517 million in 2019-20.
This FDI surge was largely driven by India’s prowess in vaccine manufacturing, with investments pouring into this vital area. While FDI dipped by 5% the following year, it then experienced a remarkable 46% surge in 2022-23. This trend bodes well for India’s G20 presidency, which experts agree has positioned India at the forefront of global healthcare and pharmaceuticals.
Yet, this trend is not limited to vaccines alone. In the last half-decade, major multinational corporations have steadily injected FDI into India’s pharmaceutical sector. Notably, India’s pharmaceutical industry holds the distinction of being the world’s largest supplier of generic drugs, accounting for a remarkable 20% of global exports by volume, according to the India Brand Equity Foundation (IBEF).
This momentous global role beckons India’s corporations to seize substantial positions within the worldwide pharmaceutical landscape. Satish Reddy, Chairman of Dr. Reddy’s Laboratories Ltd, one of India’s largest pharmaceutical companies, emphasizes the pivotal role that India’s G20 presidency plays in establishing the nation’s identity as a global pharmaceutical hub.
The G20, an assembly of leading advanced economies and emerging nations, currently comprising 23 members and contributing to 85% of the global GDP, meets annually to address pressing global issues. Notably, numerous Indian companies that export generic pharmaceuticals have successfully met the stringent quality standards set by the US Food & Drug Administration, gaining entry to the world’s largest markets for generic drugs.
This trend also aligns with India’s efforts to enhance its medical education sector, which is currently experiencing substantial demand. The nation has already achieved the World Health Organization’s recommended ratio of one doctor per thousand people, although this figure includes 565,000 AYUSH doctors practicing traditional medicine and homeopathy.
For Prime Minister Narendra Modi, the year-long G20 presidency, slated to conclude on November 30, 2023, offers a platform to focus on three healthcare priorities: fortifying responses to health crises, intensifying cooperation in pharmaceuticals—a domain where India has cultivated a remarkable production foundation—and driving digital health innovations to achieve universal coverage.
Satish Reddy affirms that the G20 summit serves as a crucial platform that unites like-minded stakeholders to explore collaborative avenues for a robust global healthcare ecosystem. Over the period from April 2000 to March 2023, India’s healthcare sector attracted over $33 billion in FDI, with drugs and pharmaceuticals claiming the lion’s share.
Glenn Saldanha, Chairman and Managing Director of Glenmark Pharmaceuticals, a significant player in the industry, underscores India’s potential, spotlighting its exceptional talent pool, pioneering research, and strong manufacturing capabilities. Saldanha advocates for equitable regulatory frameworks that enable patients worldwide to access affordable, high-quality medicines.
In line with India’s aspirations, the nation’s domestic pharmaceutical market is anticipated to burgeon to $130 billion by 2030, as highlighted by the Indian government’s Economic Survey for 2022-23. Throughout the COVID-19 pandemic, India extended its support by supplying vaccines, essential medications, and protective equipment to multiple nations, participating in initiatives like COVAX, and leveraging vaccine diplomacy.
Reddy underscores that the pandemic underscored the urgency of nurturing critical technologies and products in diagnostics, vaccines, and therapeutics. To accomplish this, he calls for collaboration among academic institutions, international research bodies, and industry players.
India’s priorities also encompass reducing access barriers and enhancing affordability for essential medications. This entails efforts to streamline intellectual property rights and ensure fair pricing. The country must also showcase its robust regulatory environment, transparency, and growth potential to attract substantial international investment into its healthcare and pharmaceutical sectors.
Notably, the influx of FDI persists, with FDI inflows into the pharmaceutical industry reaching $2 billion in 2022-23, boasting a compounded annual growth rate of 67% since 2018-19. This inflow is notably highlighted by the government’s approval of 21 FDI proposals, amounting to Rs 4,681 crore ($590 million) in the initial 11 months of 2022, predominantly for ongoing projects.
Under India’s G20 presidency, the country’s medical tourism sector is also poised to flourish. In 2020, India’s medical tourism market was valued at $2.89 billion, and projections indicate it could soar to $13.42 billion by 2026. Siddhartha Bhattacharya, Secretary General of NatHealth, India’s healthcare federation, highlights how medical tourism not only brings in foreign exchange but also elevates the reputation of Indian hospitals.
The year 2023, marked by India’s G20 presidency, has the potential to be a watershed moment for healthcare, akin to the Y2K milestone in the IT sector in 2000, Bhattacharya contends. The Indian government’s investments in healthcare are evident in the upswing of public healthcare spending, reaching 2.1% of GDP in 2021-22, up from 1.8% in 2020-21 and 1.3% in 2019-20.
Lav Agarwal, Additional Secretary in the Union health ministry, emphasizes India’s commitment to proposed priorities, aiming for a global consensus on a flexible and coordinated global health architecture. He underlines the importance of integrating global initiatives to manage future health crises, fostering effective responses and enhanced preparedness.
Agarwal, who also serves as the G20 Health Track Focal Point, underscores the hosting of co-branded events and side events for each Health Working Group meeting. These events delve into emerging aspects such as medical value travel, climate change’s health impact, and the relevance of traditional medicine. Establishing a global platform for medical countermeasures coordination also features on the agenda. Agarwal praises India’s initiatives like Co-WIN and Vaccine Maitri for addressing global healthcare needs.
The digital frontier presents a promising avenue for growth, exemplified by the Aarogya Setu app and the Co-WIN platform for vaccine tracking. These digital tools showcased the potential for technological innovation in healthcare, with the Aarogya Setu app evolving from a contact-tracing tool to a digital vaccination certificate. With over a billion downloads, the government is now leveraging it for broader healthcare roles.
Leveraging India’s prowess in information technology, the country stands poised to drive innovation through artificial intelligence, telemedicine, and electronic health records, catalyzing opportunities for tech firms and start-ups. The government’s Digital India initiative has seen the establishment of 638 e-Hospitals, leading to improved healthcare services across the nation. The eSanjeevani telemedicine service, in particular, has been a success, facilitating over 30 million teleconsultations by 2022.
Pavan Choudary, Chairman of the Medical Technology Association of India (MTaI), underscores the potential of fostering strategic partnerships under the G20 banner to collectively address global healthcare challenges and advance medical technology solutions.
While challenges in India’s healthcare and pharmaceuticals sector remain, such as quality disparities between urban and rural areas, the lack of a proper three-tier healthcare system, and high costs in the private sector, Mansukh Mandaviya, Union Minister of Health and Family Welfare, is optimistic. Mandaviya believes that the G20 role will empower India to surmount these hurdles, with a focus on digital health and innovation to bridge global digital divides and foster the use of technology in healthcare service delivery. India’s IT expertise will prove invaluable in extending quality healthcare to remote areas, maintaining records, and sharing best practices worldwide.