India: Pharmacy of the World

How India became a leading supplier of generic medicines and vaccines, the policies behind it, and the quality challenges it faces.

India is often called the pharmacy of the world. It is one of the largest producers of generic medicines, copies of drugs whose patents have expired, and a leading vaccine manufacturer.

The scale

India supplies a large share of the world’s generic medicines by volume, often estimated at around 20 percent. It is a major supplier of generics to the United States and to Africa. Indian companies also produce a large share of the world’s vaccines, with the Serum Institute of India being the world’s largest vaccine manufacturer by number of doses.

How it happened

The Patents Act of 1970: India allowed patents only on processes for making drugs, not on the drugs themselves. Indian companies could legally make cheaper versions of patented medicines using different processes. This built a strong domestic generic industry.
Skilled chemists and engineers at lower costs.
Scale: large production volumes lowered costs.

When India joined the World Trade Organization, it had to introduce product patents for medicines from 2005 under the TRIPS agreement. But it kept safeguards, such as rules against minor changes to extend patents, which India’s Supreme Court upheld in the 2013 Novartis case involving the cancer drug Glivec.

Global impact

Indian generic drug makers, such as Cipla, dramatically lowered the price of HIV/AIDS medicines in the early 2000s, offering combination therapy for around a dollar a day, far below the prices of patented versions. This helped expand treatment to millions of people in Africa and elsewhere.

Challenges

Quality: some Indian factories have received warnings from regulators like the U.S. Food and Drug Administration, and contaminated cough syrups linked to child deaths in several countries damaged the industry’s reputation.
Dependence on China for active pharmaceutical ingredients, the key chemical inputs. India has introduced incentives to produce more of these domestically.
Research: Indian companies have focused more on generics than on discovering new drugs.

The price of HIV treatment

In 2000, patented HIV combination therapy cost over 10,000 dollars per patient per year. In 2001, Cipla offered a generic version for a fraction of that price, around 350 dollars a year for aid organisations. Prices kept falling, making treatment affordable for millions of patients in poorer countries.

Thinking generic medicines are inferior

Generic medicines contain the same active ingredients as branded drugs and must meet quality standards. When properly manufactured and regulated, they work the same way at far lower cost.

Key takeaways

India supplies a large share of the world's generic medicines and vaccines.
The 1970 Patents Act allowed only process patents, building the generic industry.
Product patents began in 2005, with safeguards upheld in the 2013 Novartis case.
Indian generics cut HIV drug prices, but quality lapses and dependence on Chinese ingredients are challenges.