New policy in India will give free medicine to millions

Hannah Blake

pharmaphorum

A policy has been put in place in India to provide hundreds of millions with free medicine. While this decision could change the lives of many, part of the policy includes a ban on branded drugs, which will dramatically impact the pharmaceutical industry.

The new policy, to be implemented by the end of 2012, means that India’s public doctors will soon be able to prescribe free generic drugs to all patients, facing punishment if they prescribe branded medicines. Global drug companies, such as GlaxoSmithKline, Merck and Pfizer, will ultimately suffer, as they spend billions of dollars a year researching new treatments and target growth for branded medicine in emerging markets, such as India.

“Without a doubt it is a considerable blow to an already beleaguered industry, recently the subject of several disadvantageous decisions in India. Pharmaceutical firms will likely rethink their emerging markets strategies carefully to take account of this development, and any similar copycat moves across other geographies.”

KPMG partner Chris Stirling, European head of Chemicals and Pharmaceuticals.

However, this policy marks the beginning of a major change in India’s healthcare, as around 40% of India’s population live below the poverty line and, up until last year, the country’s public spend on health was only US $4.50 per person.

“I think this will hasten overall growth of the pharmaceutical industry, as poor patients who could not afford will now have access to essential medicines.”

Tapan Ray, director general of the Organisation of Pharmaceutical Producers of India (OPPI).