EY Parthenon – OPPI identifies three key focus areas crucial for Indian pharma and healthcare sector, sets 2047 milestone

The report for a resilient innovation ecosystem to foster collaborative engagement between stakeholders

EY Parthenon (EY-P), the leading strategy consulting firm, in partnership with the Organisation of Pharmaceutical Producers of India (OPPI), launched a report titled ‘Reimagining pharma and healthcare for India@100′ to navigate the industry’s journey towards excellence over the next two decades. It explores the sector’s growth potential on the back of three pivotal imperatives –transformative innovation, fortification of manufacturing and quality standards, and pursuit of sustainable and equitable healthcare.

Between September and October 2023, EY-P and OPPI undertook primary research consulting top CXOs from leading Indian and global multinational pharmaceutical companies, to gain insights into the strategic priorities that will pave the way forward for the industry.  

Basis that, the report identifies three key focus areas crucial for the Indian pharma and healthcare sector to reach the ambitious 2047 milestone. These include unleashing the potential for value-driven research and innovation in the pharma industry, integrating into the global pharma supply chain of the future, and ensuring sustainable and equitable healthcare access for all. 

Suresh Subramanian, Partner & National Life Sciences Leader, EY Parthenon India said, “Over the past few decades, the Indian pharmaceutical sector has witnessed substantial growth. Expanded PMJAY insurance coverage, cost-effective healthcare through Ayushman Bharat Digital Mission, and overall macroeconomic growth have enhanced accessibility. Driven by this, the industry has the potential and bold ambition to reach $130 billion by 2030 and $450 billion by 2047. Our report examines the industry’s potential to be an innovation powerhouse, play a crucial role in the global pharma supply chain, and ensure sustainable access to healthcare, with digitalisation as a force multiplier. In navigating the challenges of a rapidly evolving landscape, the insights function as a strategic guide for industry leaders, policymakers, and stakeholders.”

Suresh Pattathil, President, OPPI said, “At the threshold of significant change, the Indian pharmaceutical and healthcare sector is positioned to be a key player in shaping the nation’s future. The report, a joint initiative by OPPI and EY-P, outlines an ambitious path for the industry, aligning with the visionary objectives articulated during India’s 75th Independence Day celebrations under the concept of ‘Amrit Kaal’. It explores the pace of reforms and the interplay of factors such as digital technologies, manufacturing, supply chain, operational efficiency, and more, shaping the industry’s progress over the next two decades.”  

Key imperatives to achieving the pharmaceutical and healthcare ambition for India@100: 

1. Unleashing pharma’s value-driven research and innovation potential

With the evolving global innovation landscape and the country’s ambition for 2047, all leaders unanimously agreed that the next frontier for India is to focus on disruptive innovation. Establishing a resilient innovation ecosystem to foster collaborative engagement of various stakeholders, such as major pharmaceutical/biopharmaceutical entities, startups, biotechs, academia, and clinical researchers, is key to this shift towards value-driven innovation. This ecosystem’s vitality is further contingent on facilitative elements like financing, infrastructure, and supportive policies and regulations.

In the CXO interactions, leaders acknowledged the need for substantial investments over an extended gestation period, coupled with a high risk of failure, which emerged as the foremost barriers impeding the industry’s advancement in the realm of innovation. Additionally, Global Capability Centers (GCCs) are also making substantial contributions to the country’s innovation ecosystem by fostering talent and skill development throughout the value chain, especially in intricate and strategic domains.

2. Becoming an integral part of the futuristic global pharma supply chain 

Manufacturing and end-to-end supply chain management emerged as pivotal components within the pharmaceutical industry. In today’s competitive landscape, success hinges on the meticulous management of manufacturing operations and supply chain costs to optimise cost-to-serve ratios and minimise inventory levels, all while upholding the highest service standards.

During the research, industry leaders highlighted the following three areas of focus for the Indian industry to be able to leverage these opportunities and become an integral part of the global pharma supply chain i.e., advancement of manufacturing technologies with a specific focus on automation and digitalisation, building credibility in the global market with a commitment to quality, embracing sustainable practices. 

Most recognised that digital technology, data analytics, and artificial intelligence (AI)/machine learning (ML) hold the potential to transform the entire R&D value chain, from the intricate stages of drug discovery to the complexities of clinical development. Leveraging its robust IT capabilities, India has the potential to spearhead advancements in this field globally, and also propel the innovation trajectory of the country’s pharmaceutical industry.

The report highlights that theContract Research Development and Manufacturing Outsourcing (CRDMO) industry is also expected to grow substantially. This is driven by the strategic shift of global large biopharma companies and smaller biotechs towards prioritising core services and progressively embracing asset-light models to effectively manage their product life cycles.  

3. Achieving sustainable and equitable healthcare access for all

Lastly, the report emphasises on achieving equitable and sustainable healthcare access as a must for a country to achieve economic growth. Being the world’s second most populous country, India faces unique opportunities and challenges in the healthcare space. 

In addition to the potential offered by various government initiatives, primary research underscored the necessity for comprehensive programs aimed at controlling and managing India’s most prevalent non-communicable diseases (NCDs). Such programs promise a twofold advantage of enhancing healthcare quality and reducing overall healthcare expenditure. 

Another critical finding was the necessity for programs aimed at empowering patients and healthcare providers throughout their healthcare and disease journey. Pharma companies, in collaboration with the government and other associations, are playing a very active role in the patient journey.  

Other key findings:  

• Pharmaceutical industry leaders highlighted culture, capability development, business alignment, and robust governance as critical success factors for maximizing the Return on Investment (RoI) derived from the integration of advanced technologies.
• Indian pharmaceutical companies are proactively adopting a blend of strategies to ensure regulatory compliance and attain high-quality standards
• CXOs suggested that to build credibility and quality, there is a need for a shift in mindset, capability building, technology adoption and policy intervention