When real-time economics and business shifts shake the ground, forecasts do little to keep things standing. Even if the forecaster is a blue-blooded consulting firm such as McKinsey & Company. Out with its 2030 projection for the Indian pharmaceutical industry in late June, McKinsey says the industry could grow to $120-130 billion by 2030. Once again, an aspirational, feel-good number is hurled into the public sphere. Time, therefore, to ask how McKinsey’s 2020 forecast has held up.
McKinsey, pharma and the (inexact) art of forecasting: 2020, 2030
McKinsey’s 10-year-old 2020 forecast for Indian pharma is off by nearly 25%. Has it factored that into its latest 2030 forecast which again looks off given the slowdown among leading companies and seismic shifts in the market? Perhaps not
By 2020, McKinsey’s base case estimate said Indian pharma would grow to $55 billion. It’ll most likely be 25% smaller
By 2030, says McKinsey, the industry would grow to $120-130 billion. It doesn’t talk about its model, or how it arrived at this number
What good is such a forecast then? In this case, it’s more like a PR exercise with the Indian Pharmaceutical Association
Indian stock analysts appear to have been reading pharma tea leaves more accurately. Amateurs tend to get forecasts better than the pundits