COVID-19 & The Indian Pharmaceutical Industry- A glimpse of hope for the economy

The Novel coronavirus or COVID-19 is now spreading its effects in India at a rapid rate, with mortality and morbidity at Crest across the globe. Some of the sectors like finance, real estate and professional services have shown the largest decline while unemployment rose up to 24% on May 17, 2020.

In this pandemic situation, when most of the industries are fighting just for their survival, as a result of steep fall in demand, the pharmaceutical companies are profiting splendidly. “Pharmaceutical companies view COVID- 19 as a once-in-a-lifetime opportunity”, said Gerald Posner, author of “ Pharma: Greed, lies, and the poisoning of America. In contrast to other industries, the pharmaceutical industry is expected to see a positive collision. The stock prices for many pharma companies have risen by 22-30% in April 2020. Some of the small companies who are facing losses can align themselves with larger players and gain while some confronting higher demands have started incentivising their labourers so as to intensify their plant operations.

However, there is another side to the coin too. Behind the scenes, the pharmaceutical companies are facing a multitude of problems such as their manufacturing units are not working at full utilisation because of less number of staff available, insufficient amount of raw materials and packaging, etc. Many issues are being faced in generating sales. Every country has framed its own policies and guidelines for preventing the spread of the virus, and working accordingly is a tough deal.

Bad policy can delay, even derail economic revival. Implementation with cyber security is also a major issue as most of the market has turned to e-platforms nowadays. The pharmaceutical industry in India has a strong base and that is why in this situation (which may turn into depression), it is standing strong. The Indian pharmaceutical industry is the world’s third-largest drug producer by volume. It manufactures 60% of vaccines globally.

India supplies low-cost generic drugs, that people can afford around the globe. Amidst rising panic conditions and large scale casualties, the industry has an opportunity to become the pharmacy of the world. But for this, the large scale dependency of this sector on intermediary imports from other nations such as China needs to be ended. Moreover, there is a need to rectify the barriers to proper logistics and transportation system in this industry.

Author:

Amrita Singh

Department of Economics Studies and Policy

Central University of South Bihar