India's pharma innovation pipeline expands 1.5x to 1,095 programmes; PE/VC funding jumps 2.1x to $731 million: BCG–HealthKois

India's pharmaceutical industry is steadily transitioning from its traditional strength in generics manufacturing to innovation-led drug discovery, backed by a sharp rise in venture investments, patent filings and novel drug development, according to a joint report by Boston Consulting Group (BCG) and HealthKois.

The report, Built on Scale, Turning to Science: India's Pharma and Life Sciences Innovation Opportunity, said 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, while the country's drug discovery pipeline expanded 1.5 times to over 1,095 programmes across 195 companies, signalling an accelerating shift towards research-driven growth.

Patent surge signals innovation push

India has developed more than 10 novel drug assets over the past decade, while biotech startups increased from nearly 1,500 to 2,400. Pharmaceutical patent families originating from India climbed more than four-fold from around 716 in 2015 to 2,995 in 2024, increasing India's share of global pharmaceutical patents from 3-4 per cent to nearly 10 per cent, the report said.

The report attributed the 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, stronger academia-industry collaboration and shared research infrastructure such as Genome Valley and C-CAMP.

It also 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.

Global deals, AI attract investor interest

According to the report, small-molecule therapeutics account for nearly 49 per cent of PE/VC investments and 58 per cent of active patents, while AI and digital therapeutics attract around 17 per cent of private capital. It cited Glenmark's $700-million upfront licensing agreement with AbbVie, collaborations involving Almirall, Astria Therapeutics and ImmunoACT, besides Peptris' licensing of India's first AI-discovered drug candidate, as evidence of rising global confidence in India-origin science.

Priyanka Aggarwal, Managing Director and Senior Partner at BCG India, said India is witnessing a structural shift "from replication to origination" but sustaining the momentum would require specialist biotech capital, stronger academia-industry partnerships, faster regulatory pathways and a deeper R&D talent pool. BCG Partner Abhinav Anand said Indian companies are pursuing multiple routes to global relevance through indigenous innovation and strategic out-licensing of novel assets.

Clinical trial, R&D gaps remain

Despite the progress, the report cautioned that India still conducts only around 4 per cent of global clinical trials despite accounting for nearly 15 per cent 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, while only 10-15 per cent of Indian venture capital firms possess specialised pharmaceutical and biotechnology expertise compared with roughly 60 per cent in the US. The report said bridging these structural gaps over the next five years will determine whether India emerges as a global life sciences innovation powerhouse.