Revolutionary Effect of Generics in Healthcare Industry

Generics Revolutionizing the Indian Healthcare Industry:

The Indian pharma industry traces back its origin to 1903 when Bengal Chemical and Pharmaceutical Works was initiated in Calcutta by Professor P.C. Roy Pre?independent India largely remained dependent on other countries for medicines. The major suppliers were UK, France, and Germany. The new government post-independence focused on self-dependence and emphasized on industrialization that also included pharmaceuticals. As a result Hindustan Antibiotics Ltd. (HAL) came into existence in 1954, and following it was Indian Drugs and Pharmaceuticals Ltd. (IDPL) in 1961.

The IDPL program proved India to be capable of producing drugs at very reasonable prices and also helped in developing human and physical capital, and in establishing a network of research institutes. In spite of these facts, till 1970s the pharma industry in India was dominated by multinational companies (MNCs), which continued minimum physical operations in India.

In 1970s, the Indian Patents Act led to the revolutionary growth of the Indian pharma industry. The patent act recognized patent on process but not on the products, which enabled the local firms to reverse-engineer the drugs produced elsewhere and make cheaper versions of the drugs. Over the next thirty years, the industry grew from a handful MNCs to 16,000 licensed pharmaceutical companies.

Majority of the pharma companies in India are in the production of generics. Irrespective of their size these firms are able to produce all essential drugs at very affordable prices, which act as a saving grace for the price sensitive Indian consumers, who prefer generics over the highly prized brands.

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