Overview
Indian pharmaceutical industry has seen remarkable growth in the last decade, 3rd in volume and 10th in value. Domestic pharmaceutical network comprises of 3500+ drug companies, 10000+ manufacturing units, 60000+ distributors and 600000+ retail pharmacies. McKinsey reports that, Indian pharmaceutical industry is expected to reach USD 42Billion by 2021 and grow to USD 64Billion by 2024 as per Indian Economic Survey 2021.
Driving factors in such a exponential growth have been,
- Population growth is at 1.3% every year which leads to chronic disease prevalence which in turn will increase the patient pool by 20%.
- In the last decade, as per McKinsey report, with the steady GDP growth of 8%, around 73 million people will move to middle- or upper-income segments, around 650 million will be covered with health insurance which leads to growth in medical infrastructure and affordability of drugs.
- Growth in intellectual property and industry leaders focusing in expansion of markets in the existing white spaces.
Current Status
Extraordinary circumstances due to COVID 19 have impacted and brought changes in the consumer requirements leading to structural changes in the value chain. Pharmaceutical industry has responded with utmost agility during these difficult times, from sequencing the corona virus to vaccinating nearly half of the population with an efficacy of 90%. A report jointly published by Ernst and Young and Ficci has reported that, Indian pharmaceutical industry has seen CAGR (Compounded growth rate) nearly 11% in domestic market and 16% in the global market. Thanks to extraordinary efforts across the globe, collaborations, effective use of resources and data accumulations and sharing in real-time basis. Innovations across the pharmaceutical industry have been fast tracked leading to collaborations of resources and data.
India aims to be the pharmacy of the world and grow to US$130 billion by 2030. This humongous task can be achieved by bringing together all the stakeholders- companies, distributors, retailers, physicians, academicians, IT providers, logistics services and the consumers. Technology adoption at all levels of the pharmaceutical industry and data sharing across the stake holders will enable consensus in research and development, manufacturing, supply chain and market access leading to groundbreaking innovations to better reach of products to the last mile of the supply chain.
Since the COVID19 outbreak there has been tremendous amount of pressure on the pharmaceutical industries to equip their workforce with digital tools for better productivity. Availability of data is the need of the hour for management leaders to make informed decisions thereby data becoming the non-negotiable component in the pharmaceutical supply chain leading the giant leap of digital transformation.
The Problem
Speaking of digital transformation in the pharmaceutical industry, there hasn’t been much of pharma tech startup rush in the recent times unlike other domains such as e-commerce, edtech, fintech etc. Few of the notable reasons have been
- Digitally fragmented supply chain solutions, making it nearly impossible to break the conventional technology setups.
- Larger gestation period from identifying prospective customer to successfully deploying the products and realizing the revenue, which leads startups to financial vulnerability.
- Lack of interest shown by investor community which has led the current millennials to other B2C markets.
Way Forward
The important objective of digitization is to have data at our disposal to make informed decisions. Its time for the pharmaceutical companies, distributors, retail pharmacies to gear up to this new transformatory eco system and maximize the adaptation of digital solutions to conduct their operations.
Most crucial aspect is to build solutions which can aggregate data at all levels of the supply chain and provide business intelligence through data analytics capabilities which helps in bridging the gap between demand and supply.
Current lot of millennials must start focusing towards building their startup carrier in pharma tech domain. Harnessing the advanced technologies such as, machine learning, cloud computing etc will enable building a connected supply chain technology which helps companies, distributors, and retailers to plan promotions and reallocate capital based on real time analytics across supply chain.
