Indian Pharmaceutical Market, by Therapeutic Area (Anti-Infectives, Cardiovascular, Gastro-Intestinal, Respiratory, Pain / Analgesics, Anti-Diabetes, Vitamins / Minerals, Dermatological, Neurological / CNS, Gynaecological, Others), By Drug Type (Generic, OTC, & Patented), & by Region (North India, South India, East India, West India, Central India), is expected to grow at a healthy CAGR for the period between 2020 and 2028.
The global Indian Pharmaceutical Market in 2020 is estimated for more than US$ 55.1 Bn and expected to reach a value of US$ 103.2 Bn by 2028 with a significant CAGR of 8.2%
As per the report, after years of rapid growth, the Indian pharmaceutical market is now ranked as the third-largest by volume, as expanding healthcare coverage allows a higher proportion of the population to access healthcare. Despite the high volume of medicine sold in India, the lack of spending on high-value treatments for conditions such as cancer and genetic conditions, coupled with the Indian pharmaceutical market having the lowest average drug prices anywhere in the world, leaves the Indian pharmaceutical market as only the 13th largest pharmaceutical market by sales revenue. As the middle class in India is set to expand significantly over the next decade, this will prompt a higher amount of spending on healthcare as the wealthier population demand a better level of healthcare.
Healthcare in India is currently mostly paid for out of pocket by patients, with estimates stating that less than 18% of India’s 1.3 billion-strong population are covered by some form of health insurance. It is likely that the growth of the Indian health insurance market will relate closely to the growth of the Indian pharmaceutical market.
The government is currently attempting to encourage the population to get health insurance. Incentives include an increase in allowable deductions under section 80D of the Income Tax Act from Rs.15,000 to Rs.25,000 on health insurance premiums and an increase from Rs.20,000 to Rs.30,000 for senior citizens.
This is coupled with the government initiative to extend healthcare beyond just low-income workers and their families under the RSBY scheme to all Indians under the National Health Assurance Mission. The National Health Assurance Mission aims to provide basic healthcare for free for all citizens. These measures are likely to increase the amount of money available to spend on healthcare greatly over the forecast period.
The government and NGOs are also looking to increase awareness of health issues, which if successful will mean that the number of patients seeking medical treatment will increase. Patients who were previously unaware of treatments for certain conditions will seek treatment. Those who could not afford treatment due to a lack of funds will be able to if the government implements the National Health Assurance Mission successfully. All this bodes well for the Indian pharmaceutical market, which is set to show strong growth over the forecast period.
Furthermore, Meridian Market Consultants (MMC) Study identifies that India is expected to show the highest GDP growth of any large economy over the forecast period, with GDP growth predicted to overtake Chinese GDP growth this year. If India fails to perform as well economically as it is expected to, this will impact the level of pharmaceutical spending in India, not only from government sources but also in the private sector.
As long as people are paying for healthcare out of their own pocket rather than being insured, a fall in income will mean that people will have a smaller amount of disposable income than they are predicted to and hence will spend less on healthcare. However, as the level of public and private healthcare insurance rises, this will lead to the level of pharmaceutical spending becoming less directly related to personal income than it is today. This means that the changes proposed by the Indian government will need to be acted upon for the pharmaceutical market to pass the $100bn thresholds by 2026.
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