Indian Drug Market Drivers That Motivate Expansion

With its booming population and an increased per capita healthcare expenditure at a CAGR of 10.3% from $43.1 US dollars in 2008 to $57.9 US dollars in 2015, India is expected to rise by $88.7 US dollars by 2020 in terms of global healthcare expenditure, according to FICCI, 2018. The major drug market drivers that are expected to motivate expansion are mounting incomes, greater awareness of personal health and hygiene, and better access to high-quality healthcare facilities.

The major allergic diseases prevalent in India include asthma, anaphylaxis, food and insect allergy, rhinitis, drug, eczema and urticaria, and angioedema. Averagely, 20-30% of the total Indian population suffers from either of these diseases. The majority of the research on allergy drug development is associated with the R&D expenditure capabilities of the pharmaceutical companies, as well as the adoption of new-age technologies.

The Growth of the Indian Drug Market:

The growth of the Indian drug market is driven by motivating and challenging market drivers that help expand global opportunities specific to India. The exponential phase of the growing trend in the Indian pharmaceutical industry is characterized by the following drug market drivers:

  • Government policies                   
  • International policies
  • Public relation                             
  • Allergy prevalence
  • Economic and financial stability
  • Research and development expenditure
  • Availability of resources

1. Government Policy – The Primary Drug Market Driver:

The Government of India forms and implicates policies for the development and innovation of drugs in India. These policies are implemented to help the development of the drug market and also increase the export of drugs. According to an investigative report by the Indian Express, (2017), the main focus of the government while forming policies for regulating the drug market includes:

  • The standardized process made it easy for the manufacturers
  • Quality control to avoid duplication of the ingredients
  • Convergence of the regulatory practices

The collaboration of all these agencies makes the process of drug development faster and also helps in avoiding resource wastage by the repetition of the research in two places at the same time (WHO, 2017).

International policies also act as a market driver:

The policy formation by the international authorities largely impacts the allergy drug manufacturers of India. India is also one of the ten largest generic drug exporters according to a report in 2018. Therefore, the pharmaceutical companies in India need to strictly follow the rules and regulations set by international organizations like:

  • USFDA (US food and drug administration),
  • World Health Organization (WHO), and
  • EMA (European Medicine Agency).

Diligence to these guidelines of international organizations allows for achieving maximum export of allergic drugs concerning sales volume and finances (CII, 2012).

These policies mainly determine the safety and efficacy of exported drugs. However, the policies turn out a bit challenging for the Indian drug manufacturers while following the regulations, costs of manufacturing, costs of applications, packaging of the drugs, and quality control (Business Today, 2017).  Additionally, the advantageous point of international policies includes a larger scope of drug export, increased revenue, and larger geographic market coverage.

Research and development expenditure as a market driver:

Yet another important market driver in the context of the Indian pharmaceutical sector is R&D expenditure by the government and FDIs; increased government expenditures and FDI increases the overall capabilities of research and development. Reports indicated that in FY2011-12, 5.8% of total income was spent on R&D by Indian pharmaceutical industries, which increased to 9% in the year 2016-17. In addition, Banerji & Suri, (2017) also reported that 12.39% of the total patents granted comprise drugs for human necessities. R&D expenditures by the leading Indian pharmaceutical companies have gone up significantly by 28.8% in 2014-15 and expect to rise by 30-35% in 2020. This increase results in greater revenue generation and improves international exports (Liu et al., 2017). Thus, R&D expenditure acts as one of the most important market drivers for the Indian drug market.

Public relations as a market driver:

Public relations are an important aspect of the increase in the market size for drugs in India. The main causes of allergic reactions in India consist of the household environment, genetic factors, tobacco smoke, dust, exposure to polluting fuels, etc.

Therefore an awareness of the factors that lead to increasing allergic disease development is very necessary. Public relations are also important for educating people about the treatment options and preventive measures for various types of allergic reactions. Public relation by the pharmaceutical industry allows the general public to gain knowledge on the importance of drugs and medications for allergies.


Economic and financial stability is a significant market driver for the Indian drug market. More economic support provided to the pharmaceutical industries for drug production will lead to the efficient control of the allergy prevailing in the country. The healthcare sector in India will grow at a CAGR of 15% and touch US$ 158.2 billion in 2020 from US$ 78.6 billion in 2012 (IBEF, 2014).

The market drivers that act as major motivations for the drug market are disease prevalence and public relations. On the other hand, the research and development, economic stability, and government role mainly act as a challenge for the allergy drug market. In India, very little attention is given to the research and development of new drugs, therefore, resulting in a huge communication gap between the government and private institutes that control drug formation.

However, the challenges occur due to a lack of major funds for research and development as well as a lack of major allergy drug discovery in India. The least attention is given by pharmaceutical firms to the development of allergy drugs. However, these factors can be turned into motivation by giving more attention to R&D and innovation along with diligence for human necessities.