'PHARMACY OF THE WORLD' SUPPLY CHAIN WOES

India's pharmaceutical sector, has achieved remarkable growth, but faces significant supply chain hurdles, including high logistics costs and limited cold chain facilities. Addressing these challenges is essential to sustain its global impact and future expansion, reports

- R CHANDRAKANTH

The Indian pharmaceutical industry has been growing at a phenomenal pace and as of 2023 it was the third largest by volume and the 13th largest by value in the world pharma market. The turnover of the Indian pharmaceutical market was estimated to be $41 billion, with exports accounting for $25.3 billion in fiscal year 2022-23, as per a report by Pharmexcil. The projections are that the pharma sector will touch $130 billion by 2030.

Aptly the Prime Minister, Narendra Modi named the sector as the 'pharmacy of the world' which further got accentuated during the Covid-19 pandemic when India supplied vaccines, life-saving medicines and other much-needed medical supplies to scores of countries, and at the most affordable prices. Outside of the pandemic, the Indian pharma sector continues to be a critical component of the global supply chain having a share of 20 per cent in the export of generic drugs and a 60 per cent share in the supply of low-cost vaccines.

High Logistics and Warehousing Costs

This growth story of the pharma sector is not without its set of challenges, and topping the list is the logistics of the pharma trade itself, particularly when it comes to exports. A report by GS1, a global supply chain standards organisation, notes that the Indian pharma companies have an inventory of 98 days, while best-in-class pharma companies have 64 days, requiring the need to improve efficiencies. Compounding to that is the logistics and warehousing costs which is 15 per cent higher in India compared to other countries.