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Sift to large molecules and AI-led transformation to accelerate, CRDMOs to grow in 2026: EY Parthenon India
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Our Bureau, New Delhi
January 15 , 2026
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The shift from small molecules to large molecules in Indian pharma will be accelerated during the year 2026 by investments flowing into CRDMOs (contract research, development, and manufacturing organizations) and large pharma players entering the CDMO space, according to EY Parthenon's outlook for the new year.
The firm said that AI-led transformation is expected to accelerate across operations (quality, R&D, supply chain, commercial, and manufacturing), enabling next-level differentiation in service offerings through GenAI infusion.
"As we look ahead, the next phase of lifesciences transformation ill hinge on how quickly organisations embed GenAI across R&D, manufacturing and quality, supply chain and commercial operations," said Suresh Subramanian, partner, National Life Sciences Lieader, EY-Parthenon India.
The sector is shifting from proof of concept to development at enterprise scale. The winners will be those who interpret technology, operations and talent into one cohesive transformation agenda, he added.
CRDMOs are expected to emerge as a key growth driver for Indian pharma.
"The shift from small molecules to large molecules in Indian pharma will be accelerated by investments flowing into CRDMOs and large pharma players entering the CDMO space," said the firm.
Production linked incentive and Promotion of Research and Innovation in Pharma MedTech Sector (PRIP) initiatives will enable import substitution and further strengthen India’s dominance in the global supply chain.
The emergence of platform-led and connected healthcare will enable greater consumerization of healthcare services and products.
The Rx-to-OTC shift is likely to unlock value and drive growth across major brands in the Indian Pharma Market (IPM).
Enhanced private equity activity is likely to propel CDMOs, CRDMOs, and medical devices into the next phase of growth.
Pharma companies are expected to set up new Global Capability Centers in India and deepen integration with global principals across core functions such as R&D, analytics, and supply chain.
A growing number of initiatives are aimed at driving digitization and AI-led operations across the life sciences value chain. This include measures such as around 50% of pharmaceutical firms are already investing in or exploring AI-driven solutions.
AI/GenAI adoption across life-sciences value chains (R&D, manufacturing, supply chain, commercial operations) could deliver 30%–40% productivity gains by 2030. Globalization of Indian pharma and MedTech is being strengthened by acquisitions, AI-powered diagnostics, and enhanced R&D capabilities.
Commenting on the developments in the sector so far, it said that pharma firms are increasingly looking to transform their operations by integrating AI into core processes. Increasing regulatory pressure has brought higher focus on quality and compliance.
Volatility in API prices is pushing companies to pivot to large molecules and biotech. Emergence of CRDMO is driven by a surge in MNCs outsourcing, end-to-end discovery and development activities.
Rising number of S/4HANA migrations and SAP-led digital transformations, signal a strong opportunity to digitize on the back of these ERP related changes. AI-first, sensing supply chain and predictive capability across operations are becoming new possibilities specifically with increasing data availability.
Quoting its MedTech report in 2024, it added that the MedTech market is likely to grow at a CAGR of 22% over the next five years and will be an area attracting further investments. Over 70% of innovations by Indian MedTech startups are now driven by digital integration (AI, IoT, cloud, software + hardware) rather than just hardware.
According to the Central government, the overall pharma industry in India is $55 billion and projected to grow to $130 billion by 2030 (15% CAGR), with 50% contribution from exports. India is ranked third by volume globally, accounting for 60% of the global vaccine supply and catering to 40% of the generic medicine demand in the US market.
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