Special Feature On Pharmaceutical & Healthcare Industry

The corona virus pandemic drew everyone’s attention to the need for basic medical facilities across the country, elevating the pharmaceutical and healthcare industries and compelling the government to pay greater attention to them. Mandar Wagh describes how being a major participant in terms of both volume and value globally, the government’s emphasis and initiatives all contribute to the success of the industry

The pharmaceutical and healthcare sectors have unquestionably remained resilient despite the unreliable market, and their stocks have continued to outperform. The enormous potential created by the need for vaccinations and medical services on a global scale as a result of the corona virus pandemic accelerated the industry’s growth while continuous government focus and initiatives added to the industry’s optimism. The Indian pharmaceutical and healthcare industry offers significant economic contribution to the country. Hospitals, medical devices, telemedicine, medical tourism, health insurance, clinical trials and outsourcing are all part of the Indian healthcare industry. [EasyDNNnews:PaidContentStart]

The hospital industry in India, which accounts for 80 per cent of the country’s overall healthcare market, is experiencing tremendous investor demand from both domestic and foreign investors. The largest health insurance scheme in the world, Ayushman Bharat, is backed by the Indian government. In India, there are more than 1.5 lakh Ayushman Bharat centres in operation, with the goal of bringing primary healthcare services to communities closer to their homes. The Indian pharmaceutical industry offers more than 60,000 generic brands. Generic medications, over-the-counter medications, API and bulk drugs, vaccines, contract research and manufacturing, biosimilars and biologics are some of the major segments of the industry 

India has earned the reputation of being the ‘pharmacy of the world’ by manufacturing generic medications and vaccines of the highest quality at affordable prices. Major economies recognised India’s vital contribution to the supply of corona virus vaccines and the country’s prominence as regards the global healthcare industry. Because of its industry standards’ compliance, enormous production capacities and considerable number of skilled domestic workers, Indian exports meet the standards and needs of the highly regulated markets of the United States, the United Kingdom, the European Union and Canada.

Market Size
 

The Indian pharmaceutical industry contributes significantly to the global market, ranking third in terms of production volume and 14th in terms of value. With the United States being the primary market, Indian pharmaceuticals are distributed throughout the world. It supplies more than half of all the vaccines manufactured globally, making it the world’s largest vaccine supplier in terms of volume. India is the world’s largest volume provider of generic pharmaceuticals, accounting for 20 per cent of all pharmaceutical exports worldwide. The country is the world’s 12th largest exporter of medical goods. 

In the coming 10 years, the domestic market is anticipated to expand by three times, as per the Indian Economic Survey 2021. The domestic pharmaceutical market, which was valued at USD 42 billion in 2021, is projected to grow to USD 65 billion by 2024 and then USD 120-130 billion by 2030. India is home to more than 3,000 healthcare companies, a robust network of over 10,000 manufacturing facilities and a pool of highly qualified resources. Over the next 10 years, the National Digital Health Blueprint has the potential to unlock more than USD 200 billion in economic value for India’s healthcare industry.

Pharmaceutical and Healthcare Stocks
 

During the first wave of the pandemic, pharmaceutical and healthcare stocks skyrocketed due to the enormous potential created by the demand for vaccines and medical services on a global scale. The sectoral index BSE Healthcare outperformed the markets, soaring more than 55 per cent over the period of a year from March 2020 to February 2021, while the benchmark indicators BSE Sensex and Nifty 50 gained nearly 30 per cent. The equity markets disappointed in 2023, and investor optimism has been shattered with key benchmark indices gaining only 2-3 per cent year-to-date. However, despite market uncertainties and economic challenges, the pharmaceutical and healthcare industries have remained strong. 

When the performance of leading pharmaceutical and healthcare companies by market capitalisation was considered, shares of Max Healthcare Institute outperformed others, soaring 62.16 per cent in just one year! Shares of Zydus Lifesciences, Apollo Hospitals Enterprise and Torrent Pharmaceuticals also posted significant gains whereas Divi’s Laboratories was the only stock among the top 10 leading pharmaceutical companies that failed to reward investors with gains over the last year. Bacil Pharma, a micro-cap stock, emerged as the best-performing pharmaceutical stock in the past month, attracting investors with a strong uptrend of around 60 per cent in such a short period. 

The majority of micro-cap and Small-Cap healthcare stocks encouraged investors to take a closer look at them by exhibiting the potential for rapid growth. Despite the challenging environment in the equity markets, certain stocks delighted the investors. We discovered such multibagger stocks which have more than doubled the wealth of investors on a yearly basis. The top gainer on the list was Shree Pacetronix, which recorded enormous gains of 896 per cent. Shares of Shukra Pharmaceuticals skyrocketed more than 840 per cent after hitting back-to-back upper circuits over a longer period of time.

Outlook
 

The pandemic drew everyone’s attention to the necessity for basic medical facilities across the country. It boosted the prominence of the pharmaceutical and healthcare industry and compelled the government to pay it more attention. Given the industry’s immense potential and its need for the country, the Indian government is making a concerted effort to strengthen it. The Union Budget 2023-24 includes ₹89,155 crore and ₹29,085 crore for the Ministry of Health and Family Welfare and the National Health Mission, respectively. Additionally, in March 2022, it was announced that a total of ₹500 crore would be spent between FY22 and FY26 to boost the industry. 

The Union Cabinet has approved a change to the current foreign direct investment (FDI) policy in the healthcare industry that will permit FDI up to 100 per cent through the automatic route for greenfield pharmaceutical projects. The Indian healthcare industry as a result received FDI worth around USD 20 billion and produced a USD 15.81 billion trade surplus in FY22. The Department of Pharmaceuticals established an umbrella scheme called Scheme for Development of the Pharmaceutical Industry which includes various sub-schemes with special assistance aimed at the bulk drug and medical device industries.
 

The Department of Pharmaceuticals launched a PLI scheme to boost domestic production by establishing greenfield plants in order to attain self-reliance and reduce import dependency in the country’s vital bulk drugs. The Indian government has also extended the e-medical visa facility to citizens of 156 other countries in an effort to encourage medical tourism in the country. The National Digital Health Blueprint (NDHB) offers a strategy for establishing the fundamental IT building blocks necessary for the health ecosystem to streamline information flows among ecosystem participants while maintaining the privacy and security of data for citizens.
 

Over the next 10 years, India’s healthcare industry might gain an additional USD 200 billion in economic value thanks to the National Digital Health Blueprint. The growth of the Indian healthcare industry should be facilitated by the ageing society, surge in diseases, the emergence of pharmacies selling low-cost generic drugs and government programmes like the National Health Protection Scheme, which strives to provide universal healthcare. Additionally, the focus on preventive vaccinations, life-saving medications and rural health initiatives bodes well for the pharmaceutical industry.
 

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