May 10, 2014 5:14 am JST

Low costs, lax patent system fueled Indian generic-drug makers

TOKYO -- The world's No. 3 country in terms of pharmaceutical production, India is said to be responsible for producing 10% of the world's drugs, most of them generics.

     The Indian market stood at about $17 billion in 2012 and is expected to double by 2016, according to a local research company. Exports are recording double-digit growth, exceeding $10 billion for the first time in 2013. Destinations are broadening beyond industrialized nations to include Africa and other emerging economies.

     The strength of Indian generic drugs is their low price. Production costs are said to be nearly 40% less than in the U.S.

     India's generic-drug industry was spurred by a special patent system. Seeking to spread low-priced pharmaceuticals, the government enacted a law in the 1970s permitting companies to produce drugs with the same ingredients as new ones so long as they use different manufacturing processes. Companies churned out drugs without worrying about patents until this law was revised in 2005 in light of international standards.

(Nikkei)