New Delhi : A recent report by the Foundation for Advancing Science and Technology (FAST India) in collaboration with IIFL Securities highlights the growing gap between Indian pharmaceutical companies and their global counterparts in key areas such as research and development (R&D) intensity, innovation, and talent acquisition. The report reveals that Indian firms are underperforming in terms of patents, publications, and the proportion of PhD-level employees compared to international peers.
Global Pharma Firms Outshine Indian Companies
The report shows that global pharmaceutical giants produce 8.4 times more research publications and 5.6 times more patents per billion USD revenue than Indian firms. In terms of R&D investment, global companies spend three times more, highlighting a stark contrast in innovation focus.
Despite India’s position as a leader in drug manufacturing, the lack of high-level research output points to challenges in moving up the pharmaceutical value chain.
Some Indian Firms Show Promise
While Indian pharmaceutical companies lag in research publications, some are making significant strides in patent generation. Sun Pharmaceuticals ranked first among Indian firms for patents per billion USD revenue, producing 636 patents—placing it third globally. Meanwhile, Dr. Reddy’s Laboratories topped the list for R&D spending among Indian companies, allocating 10.3% of its revenue to research and employing the highest share of PhD-level employees (0.97%).
Biocon, a Bengaluru-based biotech firm, led among Indian companies for publications per billion USD revenue and secured third place overall.
Policy Reforms Fuel India’s Pharma Growth
India’s pharmaceutical sector, comprising more than 3,000 companies and over 10,500 industrial units, contributes 1.72% to the national GDP. Policy changes during the economic liberalization era, such as amendments to the Patents Act, the introduction of Production Linked Incentives (PLIs), and the promotion of foreign direct investment (FDI), have cemented India’s position as a global leader in drug production.
India is currently the third-largest drug manufacturer by volume and supplies 20% of the global generic drug market. In the 2022 financial year, Indian pharmaceutical exports—including bulk drugs, intermediates, formulations, and biologicals—amounted to USD 23.5 billion.
Innovation Gap: A Key Challenge
The report stresses that while Indian firms excel in cost-effective drug production, they must prioritize R&D investment and talent development to compete globally. The disparity between patents and publications indicates that Indian companies need to focus more on basic research and academic collaboration to boost innovation.
With the right policies and strategic investments, India’s pharmaceutical industry could strengthen its global footprint, moving beyond generics to become a hub for high-value innovation.
