2024-10-17

Indian pharmaceutical industry occupies world’s third largest seat in accordance to the volume of production and plays a significant role globally. Being a global leader in the supply of DPT, BCG, and Measles vaccines, India is one of the largest suppliers of low-cost vaccines in the world.

Indian manufacturers account for 60 percent of the vaccine supplies to UNICEF, which alone contributes to 40 to 70 percent of the WHO demand for Diphtheria, Tetanus and Pertussis (DPT) and Bacillus Calmette-Guérin (BCG) vaccines, and 90 percent of the WHO demand the measles vaccine.

Apart from this, India has the highest number of United States Food and Drug Administration (USFDA) compliant pharma plants outside of the USA. There are 500 API manufacturers contributing about 8 percent to the global API Industry.

The country is also the largest supplier of generic medicines, with a 20 percent share in the global supply by manufacturing 60,000 different generic brands across 60 therapeutic categories.

Access to affordable HIV treatment from India is one of the greatest success stories known in the medical field worldwide. Due to the low price and high quality, Indian medicines are preferred worldwide, rightfully making the country the ‘pharmacy’ of the world.

Known as one of the most regulated health markets across the globe, the European market offers vast opportunities to India’s growing Pharmaceuticals industry.

Talking on the same, the report evaluates how accessible the European market is for Indian Pharmaceutical companies, taking a reference from the Annual Report 2023-24 by the Ministry of Chemicals & Fertilizers (Department of Pharmaceuticals).

Market Insights and Exports Data: Pharma & MedTech Industry

a) Pharmaceutical Sector

In the last few years, Indian pharmaceutical exports to Europe have grown significantly over the years due to Europe's need for cost-effective treatments. Given the graph above, the following data includes Bulk Drugs, Drug Intermediates, Drug Formulations, and Biologicals.

Key Statistical Data:

In 2023-24, India’s total pharma exports touched INR 219,438.60 crore globally, with Europe becoming a major importer of its generic drugs. Over the years, India’s domestic pharma turnover has also seen a significant rise, increasing from INR 289,998 crore in 2019-2020 to INR 417,345 crore in 2023-2024, hence reflecting a consistent annual growth rate of 10-13 percent.

Key Insights:

The expiration of drug patents in Europe is another factor that offers opportunities for Indian companies to supply generic medicines. With Europe’s focus on reducing healthcare costs, Indian generics supply play a crucial role in achieving this. In the vaccine sector, India’s capacity to ensure a stable supply is essential, particularly given Europe’s aging population and the need for ongoing public health measures.

b) Medical Device (MedTech) Sector

Not only is India making quick progress in the pharmaceutical sector, but its MedTech industry is also growing its wings rapidly, with exports in several categories including consumables, disposables, and diagnostic equipment. However, entering the European market requires compliance with stringent regulatory standards, particularly the EU Medical Device Regulation (MDR).

Key Statistical Data:

In 2023-24, the total MedTech exports globally were recorded at USD 3,785 million, with significant contributions across various categories. Consumables and disposables exports were highest at USD 1,752 million, followed by electronics equipment at USD 1,472 million, implants at USD 266 million, and IVD reagents (In-Vitro Diagnostics) at USD 216 million. Surgical instruments added another USD 79 million to the total. On the other hand, India imported MedTech devices worth USD 8,188 million, showing a heavy reliance on high-tech imports, particularly electronics equipment, which alone accounted for USD 5,408 million.

Key Insights:

There’s been a significant rise in demand for diagnostic equipment, especially in the post-pandemic world. Indian manufacturers of IVD reagents are well-positioned to expand their presence in Europe. Additionally, the growth of Indian exports in implants and surgical instruments reflects the country’s increasing capability to produce sophisticated medical equipment. If regulatory compliance is achieved, India could see a rise in market share in these categories in Europe.

Challenges in Entering the European Market

While the opportunities are considerable, Indian pharmaceutical and MedTech companies face several challenges in entering and expanding within the European market.

a) Regulatory Compliance

• EMA Standards: The European Medicines Agency (EMA) enforces stringent quality, safety, and efficacy standards for all pharmaceutical products. Indian companies must ensure compliance with these regulations, which may require additional investments in quality control, clinical trials, and facility audits.
• EU Medical Device Regulation (MDR): This new regulation, which came into force in May 2021, poses significant compliance challenges for medical device manufacturers. Indian companies must align their processes with MDR requirements, including stricter post-market surveillance and higher safety standards for devices.

b) Market Competition

Europe is home to some of the largest pharmaceutical and MedTech companies globally. Indian companies must compete not only with local European firms but also with US and Chinese manufacturers, particularly in the high-tech medical device segment.

Foreign Direct Investment (FDI) inflows into India’s MedTech sector increased from INR 2,196 crore in 2019 to INR 3,978 crore in 2023-24. This influx of investment is helping Indian companies build the infrastructure necessary to meet global demand, but they still face stiff competition from established players in the European market.

Strategic Path for Indian Companies to Succeed in Europe

One of the key pointers, every Indian company has to consider when entering EU market includes,

a) Partnerships and Collaborations

To ease the entry into the European market, Indian companies can form strategic partnerships with European firms that already have market access and regulatory approvals. This collaboration can help reduce the costs and time associated with gaining approvals from the EMA or conforming to MDR.

b) Investing in R&D and Compliance

Indian companies must invest in research and development (R&D) to stay competitive, particularly for more advanced, high-value pharmaceuticals and medical devices.

Every Indian drug manufacturer or MedTech solution provider seeking to enter the European market must undergo voluntary GMP inspections by European regulatory bodies. The GMP certificate issued by any European authority is valid across all EU member states, making it an essential certification for entry.

c) Leveraging Cost Advantages

One of India’s greatest advantages is its ability to produce high-quality products at lower costs. Indian manufacturers can utilize this advantage to undercut more expensive products in the European market, specifically in generic drugs and low- to mid-tech medical devices.

Process Required to Enter European Pharma Market

To enter this market, manufacturers must first obtain a voluntary GMP certification from a European regulatory agency, allowing them to offer CMO services to European companies. The process involves a pre-audit of the manufacturing plant, followed by a full audit and the submission of necessary documentation to European authorities, including the Site Master File.

Inspection fees range from EUR 15,000 to EUR 20,000, with additional costs for inspectors' travel and accommodation. After the inspection, a Corrective and Preventive Action (CAPA) plan must be submitted to address any deficiencies, and the timeline for obtaining the GMP certification varies based on the results of the audit.

Once certified, manufacturers must secure contracts for production transfer, which involves supply and technical agreements, audits, validation batch production, and stability studies. All batches produced outside the EU must be tested and released by an authorized European laboratory before they can be marketed.

Entering the European market offers significant business opportunities for manufacturers that can meet regulatory requirements while providing competitive pricing, making it essential to work with experienced consultants to navigate the certification process.

Referenced with https://pharmaceuticals.gov.in/annual-report

Compiled and Edited by Aishwarya Saxena, Pharma Industrial India