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International trends in generics: India

Generics/General | Posted 03/09/2010 0 Post your comment

South Africa, home to 5.7 million HIV-positive people – more than any other country in the world – gives AIDS patients free drugs, most of which are generics that come from India. This is just one country, but representative of many that are keen to buy low-priced generic medicines from India. So much so that India now produces a quarter of the world’s generic medicines.

Generic drug exports from India have seen a significant surge over the last few years. African countries have been added as new destinations for exports. In the future, exports are expected to pick up pace as healthcare reform and the economic recession in the US and other countries inflate demand for lower-priced drugs.

The penetration of Indian generics into Europe has not been as rapid as anticipated a few years ago. Talking in secret, the EU and India are squabbling about the trade in counterfeit drugs, while the Doha Round (of the World Trade Organization) has stalled for a number of reasons and may not be completed till late 2010.

However, India is pressing ahead in its relations with other important markets. It was agreed in May 2010 that any Indian generic drugs that have regulatory approval in Australia, Canada, the EU, UK, and US, can now access the Singapore market without going through the same process again.

Two of India’s top drug makers, Ranbaxy Laboratories and Lupin, are looking to reap the maximum benefits from a significant generics drug opportunity opening up in Japan, the world’s second largest single drug market. The direct link that these two firms have established in the Japanese market through cross-border equity deals will probably help them gain a significant market share in the emerging cheap drug segment in that country.

Currently, Indian drug makers’ revenues from the Japanese market are tiny compared with their sales in the US and Europe. The strict regulatory regime and a low level of trust in foreign generic drugs among patients and doctors have been key obstacles for Indian pharmaceutical firms in penetrating the Japanese market.

Finally, as the Indian market matures, other world companies are steadily moving to sell their own generic drugs into India. The generics market in India is projected to grow at an annual rate of around 16.3% during 2011–2013. And wherever India is leading, China is following!

References

AVERT. Reducing the price of HIV/AIDS treatment [monograph on internet] Last updated June 21, 2010. Available from: http://www.avert.org/generic.htm [Accessed 2010 August 03].

ReportLinker. Booming Generics Drug Market in India. RNCOS. 2010 May.