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The Next Wave of Inflection for Indian Pharmaceutical Leaders, Health News, ET HealthWorld

by Rich Rieger and Kaustav Ganguly

Owing to the dynamic shift in both global and domestic markets, it has become imperative for pharmaceutical companies to consider new avenues for growing their core pharmaceutical portfolio, as well as diversifying into healthcare adjacencies via new business models. According to industry reports, the Indian pharmaceutical market had a turnover of USD 42 bn in 2021 and is estimated to grow to USD 120 bn by 2030. Some of the levers that have resulted in growth are government initiatives for universal healthcare, reimbursement coverage for a larger range of generics, rising prevalence of chronic diseases, higher demand from tier-II and -III towns, and portfolio expansion across therapeutic areas. However, the US generics business has experienced significant growth challenges owing to downward pricing pressures. With these contrasting scenarios in their domestic and US business, Indian pharmaceutical businesses may consider the six areas outlined below as part of their transformation trajectory:

Driving innovation through specialty pharmaceuticals: Specialty pharmaceuticals presents a significant opportunity given the increasing prevalence of oncology and rare disease indications. Although there are more than 7,000 rare diseases known, less than 10 percent have treatments identified, indicating a large, underserved patient population. Antibody Drug Conjugates (ADCs) for oncological indications and cell and gene therapy are both gaining momentum globally. Indian pharmaceutical companies, with a portfolio across the oncology and/or rare diseases segments, could consider a range of investments in specialty pharma to develop an innovative drug pipeline for the future.

Technology interventions to optimize R&D spend: Innovation in pharma has traditionally been associated with large R&D investments with long payback periods. However, technological advancements such as translational medicine and AI-enabled drug discovery are allowing for optimization in R&D spend and a quicker time to market. Through bench-to-bedside R&D, translational medicine enables higher productivity to optimize both upstream and downstream R&D. Pharma companies are establishing internal frameworks by leveraging this methodology to identify the right drug candidates and partnering with global academic institutes to advance translational research. Pharma companies are also leveraging AI to enable drug discovery and clinical development to minimize time and cost.

Expand into CRO-CDMO services and API manufacturing, to capitalize on the shifting supply chain dynamics: Many pharma players are recognizing India’s strength in terms of generic molecules and are investing in broader specialty areas as well as pulling through proprietary products to combine with their generic portfolios. In the coming decade, if Indian companies take control of independently manufacturing APIs, India has the potential to not only cater to domestic demand but also become an export hub, given the shifting supply chains. India is also well positioned to further expand its CRO-CDMO market presence. Indian CROs or contract research organizations can step up their focus on clinical trials as pharma companies look to recruit patients to conduct clinical trials for rare disease and oncological indications.

digital adoption: Global pharma companies are leveraging digital interventions for drug discovery and to transform their GTM or go-to-market strategies and operations. GSK is using ‘Digital Twins’ a technology to simulate and monitor processes, anticipate failures and optimize quality to accelerate vaccine development. In India, Dr. Reddy’s Laboratories is using a ‘Smart Rep’ platform to improve the efficiency of its salesforce with automated call scheduling, nudges, and personalized interactions with clinicians to inform a wider audience of doctors about the presence, efficacy and safety of their drugs.

Portfolio rationalization and M&A: Pharma companies should rationalize their overall portfolio and home in on areas of core focus for future investment. For instance, GSK and J&J have spun off their consumer health business and Sanofi and Bayer are contemplating similar strategies. Such moves enable companies to operate the core pharma and the consumer health business more effectively from investment and demand generation perspectives.

Exploring healthcare adjacencies: Indian pharma companies are also exploring healthcare adjacencies for their next phase of growth. India pharma majors, Lupine and Torrent Pharmahave recently announced their foray into diagnostics and Zydus is diversifying into core healthcare delivery through setup and acquisition of multi-specialty hospitals. Companies could also play a pivotal role by providing enabling services such as omics testing and bioinformatics, which have fueled the growth of precision medicine. In addition, with increasing demand from the largely underserved tier-II and -III markets in India, companies could explore other adjacent spaces such as medical distribution or medical technology.

With rapidly evolving industry dynamics, it is essential that Indian pharma companies understand the themes underlying the shift taking place in the industry and develop a growth strategy for the future, while continuing to strengthen their core offerings.

Rich Rieger, Managing Director, Healthcare Industry Group at Alvarez & Marsal and Kaustav Ganguli, Managing Director at Alvarez & Marsal India

(DISCLAIMER: The views expressed are solely of the author and ETHealthworld does not necessarily subscribe to it. shall not be responsible for any damage caused to any person / organization directly or indirectly.)

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