'Eye on $500 bn by 2047, pharma steps into 2026 with focus on innovation'

India's pharmaceutical industry is stepping into 2026, marking the beginning of a critical five-year period to build the required ecosystem to establish itself as an innovation hub in its bid to become a $500 billion sector by 2047, amid near-term challenges of tariff fluctuations and global trade realignments.

The predominantly generic medicines-driven domestic drug industry, which has grown from $3 billion to $60 billion in size over the past 25 years, is shifting towards innovation in next-generation drugs.

At the same time, it will also seek to capitalise on the opportunity to capture drugs worth over $300 billion that are set to lose exclusivity over the next seven years.

"Today, Indian pharma stands at a defining moment and the next 25 years will be shaped by innovation, quality, and access," Indian Pharmaceutical Alliance Secretary General Sudarshan Jain said.

The innovation agenda has gained notable momentum among the domestic players, he noted.

"From 2026 onwards, the coming five years will be critical in terms of execution translating policy momentum into measurable gains for India's ambition to become a $450500 billion industry by 2047 and establish itself as a global life sciences innovation hub," Jain asserted.

Welcoming supportive policies, he said the rollout of PRIP (Promotion of Research and Innovation in Pharma MedTech sector) received a strong response from the industry, marking a significant beginning.

"The newly announced Research Development Incentive Scheme, with biomanufacturing as a key focus area, is particularly timely, especially as drugs worth over $300 billion are set to lose exclusivity over the next seven years, Jain said.

Encouraging signals of India's shift towards innovation can be seen with leading Indian pharma companies acquiring higher-value products, closing licensing deals, and securing regulatory approvals for next-generation drugs, he stated.

The Indian Pharmaceutical Alliance (IPA) represents 23 leading drug firms, including Sun Pharma, Cipla, Aurobindo Pharma and Dr Reddy's Laboratories.

Another industry body, Organisation of Pharmaceutical Producers of India (OPPI) also agreed that the Indian pharma industry currently stands at a pivotal juncture.

"While external headwinds such as tariff fluctuations and global trade realignments present near-term challenges, they also reinforce the strategic importance of building resilient, high-quality manufacturing ecosystems, OPPI Director General Anil Matai said.

The government's renewed focus on elevating manufacturing standards, strengthening protection of intellectual property as a key enabler for sustained investment in research and innovation, and aligning with global quality benchmarks is not just timely, but it is transformational, he said.

OPPI represents research-based global pharmaceutical companies such as Pfizer, GlaxoSmithKline, and Boehringer Ingelheim.

This dual emphasis on quality, innovation, and a predictable IP environment is catalyzing a shift from traditional volume-led growth to value-driven differentiation, Matai said.

Indian innovators are increasingly investing in complex generics, biosimilars, and next-generation therapies that address unmet patient needs both domestically and in regulated markets, he added.

Matai noted that India is positioning itself to harness its deep scientific talent and robust production capabilities by strengthening regulatory harmonisation, fostering industryacademia linkages, incentivising R&D, and reinforcing trust in the intellectual property ecosystem.

"We remain confident that, with collective action and forward-looking policies, the industry will not only navigate current headwinds but also unlock new avenues of sustainable growth-advancing equitable access to high-quality, innovative medicines worldwide," he added.

As for the healthcare industry, NATHEALTH President Ameera Shah said the sector is also entering its most pivotal decade starting 2026.

With key therapies going off patent, new care models emerging, and the government advancing discussions on multiple FTAs, India has an opportunity to expand both access and global leadership, she stated.

Stating that the challenge and opportunity for the coming year is clear, Shah said it would be to convert technological possibilities into measurable health impact, and to ensure that innovation strengthens not just efficiency, but also equity and patient outcomes.

"If 2025 was the year of intent, 2026 must be the year of implementation," she added.

In the MedTech sector, policy reforms like the GST changes have energised the sector and signalled India's ambition to become a global Medtech innovation hub, said Philips Indian Subcontinent MD Bharath Sesha.

"Looking ahead to 2026, our focus must be on long-term investment in research, development, and advanced technologies. The pace at which India is strengthening its Medtech ecosystem underscores the market's strong long-term potential, he added.

AI will remain an important enabler, not just by strengthening diagnostics and improving clinical efficiency, but by helping India make far better use of its existing healthcare infrastructure, he stated.

Poly Medicure MD Himanshu Baid reiterated the importance of maintaining the positive policy intent, saying it would enable the sector to accelerate its shift from being primarily a manufacturer to a genuine innovator of advanced MedTech solutions.

"Strengthening India's market share, both domestically and globally, will depend on deeper localisation of critical components, greater investment in high-value R&D and faster clinical validation to drive adoption, he added.