The Impact of Generic and Branded Drugs on Indian Economy

With the recent decision of the government for the doctors to prescribe only salt names and the pharmacist to provide the cheapest available drug for that salt, the Indian medical wing will be witnessing a lot of changes. This will take the power from the doctor and put in the hands of the pharmacists, but how will this affect the economy of India?

To understand the effect, it is important to know the value of India in pharmaceuticals around the globe.

• The Indian pharmaceuticals market is the third-largest in terms of volume and thirteenth largest in terms of value, as per a report by Equitymaster.
• India is the largest provider of generic drugs globally with the Indian generics accounting for 20 percent of global exports in terms of volume.
• Of late, consolidation has become an important characteristic of the Indian pharmaceutical market as the industry is highly fragmented.
• The Indian pharma industry, which is expected to grow by 15 percent per annum between 2015 and 2020, will outperform the global pharma industry, which is set to grow at an annual rate of 5 percent between the same period!.
• The market is expected to grow to US$ 55 billion by 2020, thereby emerging as the sixth-largest pharmaceutical market globally by absolute size, as stated by Mr. Arun Singh, Indian Ambassador to the US.
• Branded generics dominate the pharmaceuticals market, constituting nearly 80 percent of the market share (in terms of revenues).

To add to the revenue stream and increase profits along with the health care expenses, the government has been taking several steps:

• The Indian government has taken many steps to reduce costs and bring down healthcare expenses.
• Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies.
• In addition, the thrust on rural health programs, lifesaving drugs, and preventive vaccines also augurs well for the pharmaceutical companies.

The question of the generic drugs actually reaching to people still remains the debatable issue.

Image Source