VALUE CHAIN

ANALYSIS
THE PHARMACEUTICAL INDUSTRY
 Indian pharmaceutical industry is expected to reach  Highest exports – US$ 24.44 billion in FY21.
~US$ 130 billion by 2030.
 CAGR – 22.4% in the near future
 India ranks 3rd worldwide for pharmaceutical
 Supported by the robust growth of the biotech and
production by volume and 14th by value.
health care sectors.
 The country has an established domestic
pharmaceutical industry, with a strong network of
3,000 drug companies and ~10,500 manufacturing
units.
 India is the largest producer of vaccines worldwide,
accounting for ~60% of the total vaccines, as of 2021.
STRUCTURE OF PHARMACEUTICALS SECTOR IN INDIA
EVOLUTION OF THE SECTOR
VALUE CHAIN
OF THE
PHARMA
INDUSTRY
MAJOR COMPONENTS OF THE PHARMACEUTICAL VALUE CHAIN
In advancing the understanding of the pharmaceutical
value chain, it is useful to look at three major
components:
 Manufacturing of the medicine.
 Distribution of the dispensing point.
 Dispensing to the end user.
Manufacturing of the medicine –
 In order to produce a medicine, several steps are
involved, from the initial research and development
phase.
 To gaining regulatory approval which allows a medicine
to be sold in a market.
 To the final commercialization phase.
 The specific steps and requirements will differ between
types of medicine, manufacturers and countries.
MAJOR COMPONENTS OF THE PHARMACEUTICAL VALUE CHAIN

In advancing the understanding of the pharmaceutical Distribution of the dispensing point –

value chain, it is useful to look at three major
 This step includes the transportation and handling of
components:
the medicine from the manufacturer to the end user,
 Manufacturing of the medicine. whether this is a retail pharmacy (retailer), hospital or
dispensing doctor.
 Distribution of the dispensing point.
 The complexity of this journey will differ depending on
 Dispensing to the end user.
manufacturer location, the need for importation of the
medicine, the nature of special handling requirements,
and the geographic location of the end user which will
vary between large urban centers and remote rural
villages.
MAJOR COMPONENTS OF THE PHARMACEUTICAL VALUE CHAIN
In advancing the understanding of the pharmaceutical
value chain, it is useful to look at three major
components:
 Manufacturing of the medicine.
 Distribution of the dispensing point.
 Dispensing to the end user.
Dispensing to the end user–
 Providing the correct medicine dosage and form, to the
right patient, in a convenient and timely manner is the
final step in the value chain.
 This step can also involve several additional activities,
including checking for potential interactions, providing
advice, and processing reimbursement claims, each of
which is intended to ensure the patient receives the
full benefit and value from the medicines they receive.
MAJOR COMPONENTS OF THE PHARMACEUTICAL VALUE CHAIN

In each of these components of the value chain, a range of costs are incurred, and value added, as summarized in
following figure.
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