India stands as a prominent player in the global pharmaceutical landscape, boasting the status of being the largest producer of vaccines and the foremost manufacturer and exporter of generic drugs by volume. Recent data from Asian Lite reveals that India’s contribution to the global pharmaceutical market accounts for a significant 13%. However, the limelight has been recently seized by a clash between the Indian Medical Association (IMA) and the central government, fueling debates around generic drug prescription.
Generic Drug Prescription
Earlier this year, the National Medical Commission (NMC), an arm of the central government, articulated regulations mandating that all physicians prescribe generic drugs. Non-compliance with this directive could result in penalties and even suspension of medical licenses. This proclamation was met with opposition from the IMA, who questioned the rationale behind endorsing generic drugs while simultaneously issuing licenses for branded medications.
What are Generic Drugs?
Generic drugs are pharmaceutical counterparts designed to match existing brand-name drugs in terms of dosage form, safety, strength, administration route, quality, performance attributes, and intended use. Functionally, generic drugs offer the same clinical efficacy as their brand-name counterparts, presenting a viable substitute for patients. India, notably, stands as the world’s largest manufacturer and exporter of generic drugs.
Pharma Industry’s Evolution Post-Independence
At the dawn of India’s independence in 1947, the country’s pharmaceutical industry was dominated by foreign corporations, primarily hailing from the US and Europe, controlling around 90% of the market share. In the early 1960s, the Indian government initiated policies to foster the growth of domestic pharmaceutical companies. The pivotal transformation, however, materialized in 1970.
Patent Act of 1970
In a watershed moment, the government, under Indira Gandhi’s leadership, enacted the Patent Act of 1970, a move that prohibited the patenting of medical products but allowed patenting of processes. This paradigm shift paved the way for Indian companies to manufacture drugs using alternative processes without infringing on existing patents. Reverse engineering played a key role, allowing companies to replicate drugs using different processes and ingredients, thus sidestepping patent constraints.
1995 TRIPS Agreement
India’s trajectory took another significant turn with its accession to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement in 1995. This pact aimed to foster innovation. Under TRIPS, India was mandated to recognize product patents and extend exclusive marketing rights for select new products. This move sparked increased investments in research and development, moving Indian pharmaceutical companies beyond mere generic replication to drug discovery and innovation.
Government Initiatives
The Indian government offered steadfast support by amending the Patent Act and promoting research initiatives. A crucial step was the establishment of the Rs 15,000 crore Production-linked Incentive (PLI) Scheme for Pharmaceuticals in 2021, aimed at boosting domestic manufacturing, reducing import reliance, and stimulating innovation. Noteworthy players like Sun Pharma, Serum Institute of India, Divi’s Labs, Dr. Reddy’s, and Cipla dominate the contemporary pharmaceutical landscape.
IMA vs. Centre: Quality and Prescriptions
The IMA contends that the NMC regulations should be postponed, citing concerns about generic drug quality. The IMA emphasizes that less than 0.1% of drugs manufactured in India undergo quality testing. Additionally, the IMA questions the logic of licensing branded drugs if physicians are restricted from prescribing them. The association calls for a “one drug, one quality, one price” system, advocating for uniform pricing and high-quality assurance for generic medicines.
UPSC Mains Questions
- How has India’s approach to generic drugs contributed to its standing as a global pharmaceutical powerhouse?
- What were the key provisions of the 1970 Patent Act that enabled Indian pharmaceutical companies to develop generic drugs while respecting patent constraints?
- How did India’s participation in the TRIPS Agreement reshape its pharmaceutical industry, driving companies toward drug discovery and innovation?
- Considering the IMA’s concerns about generic drug quality, what strategies can be implemented to ensure consistent high-quality standards across the pharmaceutical sector while promoting affordability?
