The Indian pharmaceutical industry is the third largest in Asia. The South Asian country is the world’s largest manufacturer of medical imitation products (generics). Prospects are extremely good in the long term development. The market volume is expected to increase to about US$ 55 billion by 2020. In 2014, sales of generics industry were about US$ 21 billion. Industry insiders forecast an increase to US$ 28 billion until 2018. According to experts, the market will benefit from the expiring patents of foreign drugs in the next two years. Patents of foreign medicines expire in the period of 2014 till 2016, which are worth US$ 92 billion. In comparison to that, pharmaceuticals of approximately US$ 65 billion lost their patent protection in the period 2010-2012.
Although an Indian legislation prohibits the copying of protected foreign drugs with a patent protection of 20 years, however, there remains a certain margin for the authorities. Under the scheme, three years after the grant of a patent, under certain criteria, compulsory licenses are granted in order to copy a pharmaceutical product. For example, there is no patent protection for an only slightly different ingredient composition or for overprized drugs, reported the daily newspaper Reuters. Another problem is the guarantee of safety and quality of medicines. The U.S. FDA has forbidden the delivery to America for some manufacturers due to lack of quality standards. The Indian government responded promptly and initiated measures to counteract. In order to optimize the processes for the guarantee of safety and quality of medicines, investments of the equivalent of US$ 510 million were announced in 2014. Amongst other things, twice as many inspectors are employed at the Central Drugs Standard Control Organization (CDSCO).
According to Assocham, with key initiatives announced by the Indian Government to include price control policies and the revision of Jan Aushadhi campaign, the market is likely to show a notable incline in the penetration of unbranded drugs. Generally, the Indian pharmaceutical industry is estimated to grow at 20 % compound annual growth rate (CAGR) over the next five years. The drugs and pharmaceuticals sector attracted cumulative foreign direct investment (FDI) inflows worth US$ 13.34 billion between April 2000 and June 2015, as reported by the Department of Industrial Policy and Promotion (DIPP).
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