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Evolution of the Modern Indian Pharmaceutical Industry
The
Indian Patents Act 1970 which disallowed the grant of
product patents for pharmaceuticals enabled the Indian
industry to market drugs protected through product
patents in India, as long as they did not infringe any
of the valid process patents granted in India. The
remarkable growth of the industry during the last three
and half decades could be attributed to this single
piece of legislation. Thus new drugs innovated and
marketed by R&D based multinational pharmaceutical
companies were made available to the Indian patients
within 2 to 4 years after they were launched abroad.
Since the Indian companies did not incur the high costs
of R&D for the discovery and development of these drugs,
they could afford to sell these drugs at a fraction of
the prices levied in patent strong countries and still
make a profit. The patients benefitted, the Companies
prospered and the Industry grew at an unprecedented rate
over these years. Since the Indian companies in the
absence of a license from the patent holder had no
access to the knowhow required for manufacture of the
drugs, they were compelled to develop competitive
chemical technologies and formulations development
capabilities in order to make them available to the
public. On the flip side, as a consequence of this
bestowed benefit, this industrial segment saw during
this period the mushrooming of companies, proliferation
of multiple brands of the same drug, neglect of drug
discovery research efforts, some unethical marketing
practices to ensure market shares, price wars and
occasionally even sacrifice of quality. The wrath of the
R&D based companies were apparent from some of the
terminologies used by vested interest groups to describe
the Indian industry as copy cats or even as pirates. At
the same time in the absence of a globally standardized
and harmonized patent system across the nations, Indian
companies were perfectly justified and legally allowed
to copy drugs protected through the patent system
elsewhere, but not in India.
India thus became a major hub for the production of bulk
drugs and formulations reaching in volume of production
terms the fourth largest rank in the World. However its
global marketing presence was restricted to countries
where there were no valid patents on the drugs, which
excluded the highly lucrative territorial markets of
U.S.A., Western Europe and Japan. On the positive side,
the chemical technology skills for the production of
even complex chemical molecules, which India acquired
during this phase, came in very handy for the production
of off patent drugs, generally termed generic drugs.
Markets for generic drugs thus opened up; so too for
fine chemicals and intermediates needed by the global
pharmaceuticals industry. Considering the low overheads
of Indian manufacture, India became very competitive in
the production of generic drugs. Today India is one of
the top suppliers of generic drugs, files around 30% of
all ANDAs required for the introduction of generic
products with the U.S.FDA and has the largest number of
FDA approved bulk drug manufacturing plants in the World
outside the U.S.A. India is not only a net exporter of
drugs, but also production for exports match that for
domestic consumption.
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