The year 2025 marked a pivotal turning point for the Indian pharmaceutical industry. Known globally for its mastery in producing affordable generic medicines, the sector witnessed its early and risky investments in original drug discovery and innovation begin to deliver substantial commercial rewards. This shift from pipeline potential to balance-sheet impact has redefined India's position in the global pharmaceutical landscape.
From Pipeline to Profit: Landmark Deals and Approvals
The momentum became unmistakably clear in July 2025, when Mumbai-based Glenmark Pharmaceuticals announced a landmark deal. Its US unit, Ichnos Glenmark Innovation, entered into an exclusive licensing agreement worth $700 million with American giant AbbVie Inc. for a cancer drug candidate targeting a rare blood cancer. This deal stands as one of the largest out-licensing agreements ever for an Indian drugmaker.
Glenn Saldanha, Glenmark's Managing Director and CEO, attributed this success to resilience. "We were always resilient in how we approached innovation. I think that's what finally rewarded us," he stated in an interview. This sentiment echoed across the industry, as other pioneers also reaped the benefits of their long-term commitments.
After over two decades of dedicated research, often facing investor skepticism, Wockhardt achieved critical milestones. Its antibiotic Miqnaf was launched in India, while another, Zaynich, made history. Zaynich became the first New Chemical Entity (NCE) from India to have its New Drug Application (NDA) accepted by the US Food and Drug Administration (US FDA), with a potential US launch expected in mid-2026.
"The year 2025 was a very, very important year for us because all the efforts of research that we have done over the last 27-28 years culminated," said Habil Khorakiwala, Chairman of Wockhardt. This antibiotic targets the critical global threat of antimicrobial resistance (AMR) and has already been used in over 70 compassionate use cases.
The Commercial Validation of a Strategic Shift
The success stories of 2025 were not isolated scientific achievements but clear commercial validations. For the first time, in the second quarter of the 2026 fiscal year, Sun Pharma reported that its sales from innovative drugs in the US surpassed those from its generics portfolio. This milestone underscores a fundamental shift in revenue streams for major Indian players.
Similarly, Biocon Biologics strengthened its position in the complex biosimilars market. A key achievement was securing the US FDA's coveted 'interchangeable' status for its insulin aspart product, a significant regulatory endorsement that facilitates easier pharmacy-level substitution for the original drug.
Pharma analyst Salil Kallianpur aptly summarized the year: "This was a year where innovation moved from pipeline slides to balance sheets." He emphasized that 2025 stood out not because India suddenly became a discovery powerhouse, but because innovation began to show tangible strategic and commercial validation.
Setting the Stage for 2026: Policy and Regulatory Frontiers
The foundation for future growth was also laid in 2025 through significant policy and regulatory developments. The Indian government's Research, Development, and Innovation (RDI) scheme, launched with an outlay of ₹1 trillion, aims to boost sectors like biotech. Alongside the continued Promotion of Research and Innovation in Pharma MedTech (PRIP) scheme, these initiatives signal strong intent to catalyze private-sector R&D.
On the global front, a potential game-changer emerged from the US FDA. Its draft guidance proposing the waiver of Phase III trials for certain biosimilars with robust analytical data could dramatically reduce development costs and time. "It fundamentally reshapes biosimilar development economics," noted Shreehas Tambe, CEO of Biocon Biologics.
However, the path ahead requires focus. Industry leaders point to China's dramatic rise in biotech innovation as both an inspiration and a benchmark. A Morgan Stanley report projects that drugs originating from China could account for 35% of US FDA approvals by 2040, up from just 5% currently—a trajectory India aspires to match.
To achieve this, experts unanimously call for regulatory reforms. "The next phase will require focus on regulatory predictability, more transparent clinical development pathways as well as better alignment with global standards," emphasized Glenmark's Saldanha. Wockhardt's Khorakiwala added that while funding is increasing, regulatory mechanisms need to catch up significantly to sustain the innovation momentum.
As 2026 unfolds, the Indian pharmaceutical industry is no longer just the 'pharmacy of the world' for generics. It is now a burgeoning hub for innovative, complex, and globally competitive medicines, with 2025 serving as the definitive proof of concept that patient capital and scientific ambition can indeed pay off.
