Problems of India Emerging as a Force in The Global Biogenerics Space

Dr. M.D. Nair

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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