The API Industry
The backbone of India pharma industry is the bulk drug industry
India has highest no. of US FDA approved plants (665) outside of the US
India has 44% of global abbreviated new drug applications (ANDA)
India needs to proactively boost the API Industry

The Indian pharma industry is the world's 3rd largest in terms of vol
India's API industry is ranked the 3rd largest in the world
India fulfils 20% of global demand for generic medicines in terms of Vol & supplies over 60% of global demand of various vaccines & ARV drugs

Indian bulk drug industry has grown at CAGR of 8.6% over 2016-2020. It is further expeacted to grow at similar CAGR during 2020-2024
The import of APIs has risen at a CAGR of 8.3% from 2012-2019
Bulk drug import reached a value of INR ~249 billion in 2019

@Harrshit1

Imports from China have been on a steady rise over the yrs (Frm 62% in FY12 to 68% in FY19)
India imported 169 Bn worth of APIs from China in FY19
High import dependancy is largely attributed to lack of cost-effective options in domestic API mfging as compared to imports

Contribution to Economy
Provides Employment to 2.7 Mn Ppl
Generates $11Bn trade surplus every yr
Amongst the top 5 sectors contributing to the reduction of trade deficit
2 Bn FDI inflows over the last 3 yrs
Dominated by MSMEs which are primary employment generators

The Indian generics industry can benefit substiantially from the patent cliff as patents for branded molecules with cumulative global sales of over $251 billion are expected to expire b/w 2018 & 2024, opening new opportunities for the industry
#Bulkdrug
@unseenvalue
#API

India is expected to export bulk drugs worth 303 Bn in FY20
India accounts for 17.5% of the world's population & bears 20% of the global diseases burden
1 in every 3 pills consumed in the US is produced by an Indian generics manufacturer

@unseenvalue
#Pharmaceutical

The bulk drug industry is highly fragmented with around 1500 plants that manufacture APIs.
In FY18, top 14-16 players (including large formulation companies) comprised just 16-17 percent of total market share.
Current market is largely dependent on China for many APIs

High Imports
Low cost Imports have a gradual erosion of india's mfging capacity of many APIs
Dependancy on imports can be reduced if India is able to manufacture the APIs in a cost efficient manner
China is a single supplier for many of the critical intermediates & APIs

Challanges face by Indian API Industry
Limited government support in the past
Inadequate infrastructure
Environemental clearnace issues
Price control regime (NLEM/DPCO/NPPA)
Price volatility due to high import dependancy
Increased Scrutiny of quality compliance

India and China
China enjoys cost advantage of around 20%-30% over India
Chinese API market has now over 2000 APIs molecules
China has more than 7000 APIs manufacturers with annual production capacity exceeding 2 Mn tonnes
Indin has around 1500 APIs mfging plants

China's dominant position in the mkt is a result of infrastructure investment, large-scale mfging capacities, cost effieciency, technical capabilities and supportive govt policies
China implemented a greater no of reforms to improve its business climate in FY19 than India

Cost Comparison India v China
RM costs in China are 25%-30% lower than India
Power cost in China is 20% cheaper than India
Logistics costs in China are lesser than India
Borrowing cost in China is lesser than India

@npal20 @_N_U_P_K_Y @DIALWEALTH_IN

Manpower cost in India is 1.8 times lower than China
Capacity Utilization rate in China 30%-40% higher than India
Set-up & production costs in China are 15%-20% lower than in India
Cost of Chinese bulk drug is 20%-30% lower than in India
#Pharmaceuticals
#API
#China

Boosting API Industry
Recently GOI approved Bulk drug park & Production linked Incentive Scheme for promotion of domestic mfging of 53 critical APIs
Ease of doing business
Incentives and subsidies
Infrastructure development
Innovation and technical capabilities