India's pharmaceutical industry is undergoing a fundamental transformation from its traditional generics manufacturing base to innovation-led drug discovery, with the country's drug discovery pipeline expanding 1.5 times to over 1,095 programmes across 195 companies, according to a joint report by Boston Consulting Group (BCG) and HealthKois. As reported in the report titled Built on Scale, Turning to Science: India's Pharma and Life Sciences Innovation Opportunity, India has developed more than 10 novel drug assets over the past decade, while biotech startups increased from nearly 1,500 to 2,400 during the same period. The innovation pipeline represents a significant shift from replication to origination, with the country's pharmaceutical patent families originating from India climbing more than four-fold from around 716 in 2015 to 2,995 in 2024, lifting India's share of global pharma patents from 3-4% to nearly 10%. According to the report, this shift is qualitative, not just quantitative, with Indian companies increasingly moving beyond generics and biosimilars to originate novel medicines, license intellectual property globally and compete on scientific innovation rather than manufacturing efficiency alone.
Private equity and venture capital investments into India's pharmaceutical sector more than doubled 2.1 times over the past five years to $731 million in FY26, according to the latest BCG-HealthKois report. Small-molecule therapeutics account for nearly 49% of PE/VC investments and 58% of active patents, while AI and digital therapeutics attract around 17% of private capital. The report highlighted breakthroughs including BIRSA 101, India's first indigenous CRISPR-based therapeutic, and NexCAR19, an indigenous CAR-T therapy priced at nearly one-tenth of comparable overseas treatments. Notable global collaborations include Glenmark's $700-million upfront licensing agreement with AbbVie, which included milestone payments worth up to $1.2 billion and is described as one of the largest licensing transactions involving an India-origin molecule, collaborations involving Almirall, Astria Therapeutics and ImmunoACT, and Peptris's licensing of India's first AI-discovered drug candidate, demonstrating rising global confidence in India-origin science.
According to co-founder and general partner Ajay Mahipal at HealthKois, the firm is evaluating investment opportunities for its $300-million third fund, planning to invest between $7 million and $25 million per company in early growth-stage businesses across healthtech, life sciences, medtech, healthcare delivery and climate health. The Delhi-based healthcare-focused VC firm, established in 2025 as a successor fund to HealthQuad, is looking at biosimilar companies, vaccine companies, bioprocessing platforms, generative medicine, and precision oncology as spaces where credible businesses can be built. However, access to private capital remains a major constraint, with Charles Janssen, co-founder and managing partner at HealthKois, noting that while 60% of VCs in the US have a certain depth of understanding in life sciences and biotech, only 10 to 15% of venture capitalists in India do, leading to smaller Series A rounds. The report attributes momentum to nearly $5 billion in government funding for early-stage and translational research, faster regulatory approvals that have reduced drug development timelines to 60-120 days from 180-270 days, and stronger academia-industry collaboration through initiatives such as the National Biopharma Mission, BIRAC programmes, Genome Valley, C-CAMP and BIRSA 101.
Despite significant progress, the report cautioned that India still conducts only around 4% of global clinical trials despite accounting for nearly 15% of the global disease burden. Annual pharmaceutical R&D spending remains at $2-3 billion, significantly below the $70-75 billion invested annually in the United States. BCG Partner Abhinav Anand noted that Indian companies are pursuing multiple routes to global relevance through indigenous innovation and strategic out-licensing of novel assets, while Priyanka Aggarwal from BCG India emphasized that sustaining momentum would require specialist biotech capital, stronger academia-industry partnerships, faster regulatory pathways and a deeper R&D talent pool. The report concluded that bridging these structural gaps over the next five years will determine whether India emerges as a global life sciences innovation powerhouse, with the next five to ten years being critical to build on current momentum. As per the report, India has reached an important turning point with the ingredients needed to build a globally competitive innovation ecosystem beginning to fall into place, supported by increasing private investment, policy initiatives and a stronger research ecosystem.
