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Business Insight

India's pharmaceutical prescription is unhealthy

Generic drug companies must confront multiple challenges to survive

India's pharmaceutical companies are facing a series of regulatory and other hurdles, exacerbated by self-inflicted errors and badly conceived government policies that will hobble the $30 billion generic drug sector. Some companies have started to work together to raise quality and iron out regulatory compliance problems, but others have yet to make serious efforts to help themselves. That needs to change quickly.

The pharma industry faces a host of challenges. The government is trying to cut healthcare costs by forcing doctors to prescribe cheaper unbranded generic medicines and extending the range of drugs that are subject to price controls. It is also discouraging high-margin combination drugs and phasing out loan licensing (a form of contract manufacturing that increases pharmaceutical industry capacity) for safety reasons.

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