Why Are Generics Available in India and not the U.S.?

WHY ARE SO MANY BRAND ONLY PRODUCTS AVAILABLE IN INDIA AS GENERICS?

The story goes back to the late 1960's. Many of you may not know but India earned its independence from the British in 1947. In the 50's India was a very young country and the goal of the government at that time was to ensure citizens got the basic requirements of food, water, shelter and a lawful existence. In the 50's big pharmaceutical companies at that time started importing and selling products in India. By the 60's they were doing very good business but they kept increasing prices. This became a hot political issue. Also big pharmaceutical companies refused to make anything in India preferring to import everything.

In 1973, the government of India decided to take action on ever increasing pharmaceutical prices. It took 2 actions. One, was the implementation of an act called the Drug Price Control Order (DPCO). Under this act 450 odd molecules came under the order as per which the government had to approve the final sale price of any pharmaceutical product that was sold in India. This automatically brought prices down in India.

The second action was even more interesting. The government went on to derecognize product patent but keep process patent protection in place. So a pharmaceutical company could no longer claim that as it was under patent in the US the same product can't be sold in India. An Indian pharmaceutical company was free to manufacture and sell all patented products in India without requiring approval from the global patent holder.

This created an explosion in the pharmaceutical industry. Suddenly products that were affordable only to the rich were now afforded by almost everyone in the country. Product volume sky rocketed. At the same time big pharmaceutical companies left India in a huff as a show of their protest. This was a decision all of them came to rue by the 2000's.

Within 25 years, by 1998, Indian pharmaceutical industry became the most vibrant with the most affordable product anywhere on earth. Any new product that was launched in the US was available to the Indian consumer within 6 months as a generic version selling at 1/10th the price. Also as these products had no patent, many India pharmaceutical companies could sell the same product thereby dropping prices even further.

Another important reason for the government to favor low prices was that more than 80% of Indians don't have any form of health insurance. The government does not provide healthcare except for people below poverty line and as a result everyone has to pay for their own healthcare and medications. This was a great incentive for the government to keep medication prices low by law and by ensuring greater product competition. This is why almost any brand only product in the world is available as a generic in India at very low prices.

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