How India has managed to keep the costs of generics medicine low?

How India has managed to keep the costs of generics medicine low?

The Indian pharmaceutical industry has seen a spectacular rise and has come a long way from being unknown after independence to making its presence felt at a global level.


India is known as ‘the pharmacy of the third world’ and is one of the largest producers of generic medicines globally.


It is a controversial issue, with big MNCs rallying for stringent patent laws, which as a result would lead to greater profits. But instead of all this, Indians, with their reverse engineering skills are able to manufacture drugs at an extremely low cost.


  • There is huge demand of medicines in India and even after selling the drugs at low costs, companies make a good profit.
  • The overall cost of production in India is about 38%-42% of that in the US. This is because the manufacturing and installation cost in India is lower than what it is in the US.
  • India follows the process of compulsory licensing that allows production of affordable low-cost generics that can be exported to other countries.
  • The Indian government regulates the price of about 700 key medicines, hence reducing their overall cost.
  • By exporting drugs in bulk and some APIs (active pharmaceutical ingredients) Indian companies make decent revenue. These drugs are also estimated to grow at an average rate of 12-15% by 2018-2019.

Tags: Pharmaceutical Industry | Generic Medicine