Why in News

• India’s pharmaceutical exports are under pressure due to

  • New tariffs (extra taxes on imports) imposed by the United States

  • Stricter intellectual property (IP) demands that may delay the entry of affordable Indian generic medicines

• This threatens the viability of Indian generics in their biggest market (the United States)

• Despite this, Indian generics remain crucial for global healthcare, saving billions in medical costs

Current Status of Indian Pharmaceuticals

• India supplies generic medicines to more than 200 countries

• Known as the “Pharmacy of the World”

• The United States is India’s largest market

  • It accounts for 31.35 percent of India’s pharma exports

  • About 47 percent of all generics consumed in the United States come from India

• In 2022, Indian generics saved the United States 219 billion dollars in healthcare expenditure

• The global generic medicines market is expected to reach 614 billion dollars by 2030

• Challenges for India

  • Tariffs by the United States

  • Dependence on China for APIs (Active Pharmaceutical Ingredients = raw materials used to make medicines)

  • Increasing competition from other countries

Significance of Indian Generics

• Affordable Medicines

  • Cost only 20–25 percent of branded medicines

  • Essential for diseases like diabetes, cancer, and HIV

• Global Public Health

  • Make up more than 90 percent of prescriptions in the United States

  • Vital for developing countries that cannot afford costly branded drugs

• Economic Contribution

  • Pharma exports add about 25 billion dollars annually to India’s economy

  • Provide millions of jobs

• Strategic Power

  • Used as a tool of soft power (influence through trust and goodwill)

  • Example: Vaccine Maitri initiative during COVID-19, where India supplied vaccines globally

• Innovation

  • India is growing in biosimilars (biological medicines similar to original ones), vaccines, and affordable research-based solutions

Need for Strategic Shift

• India should not depend only on temporary tariff relief

• Must aim for long-term trade strategy

  • Resist TRIPS-plus demands (extra intellectual property protections beyond the TRIPS agreement under the World Trade Organization that benefit big pharma companies by extending monopolies)

  • Expand markets to Africa, Latin America, ASEAN, and Central Asia

  • Negotiate for technology transfer (sharing of technology know-how) and joint research and development

  • Align pharma policy with Sustainable Development Goal 3 (Health for All)

Challenges Faced by Indian Pharma

• Trade Barriers

  • United States levies 26 percent tariff plus 25 percent penalty on imports

  • Pushes for zero tariffs but gives no reciprocal benefits

• Intellectual Property Rights (IPR) Pressures

  • Stronger patent rules beyond TRIPS

  • Data exclusivity (restricting generic companies from using trial data for a period)

  • Extended monopolies that delay generics entry

• Domestic Constraints

  • Over-reliance on China for APIs

  • Weak regulatory system and fragmented research ecosystem

• Global Competition

  • New hubs in China, Brazil, and Eastern Europe

• Public Health Risks

  • Restrictive IP rules could make medicines expensive, worsening inequality

Initiatives and Policy Measures

• TRIPS Flexibilities

  • India uses compulsory licensing (allowing generic production of patented medicines in emergencies)

• India–United States TRUST Initiative

  • Collaboration in biotech, pharma, and health technologies

• Make in India + Production Linked Incentive (PLI) Scheme

  • To reduce API dependence and strengthen domestic manufacturing

• South–South Cooperation

  • India setting up joint ventures in Africa, Latin America, and ASEAN

• Health-Tech Diplomacy

  • Sharing vaccine platforms and generics technology with developing countries

Way Forward

• Leverage Negotiating Capital

  • Demand review of TRIPS

  • Highlight generics’ role in global health security post-COVID

• Diversify Markets

  • Reduce over-dependence on the United States

  • Focus on Africa, Latin America, ASEAN, and Central Asia

• Promote Joint Ventures

  • Collaborations with Global South and Western countries for co-manufacturing and research

• Strengthen Domestic Capacity

  • Invest in self-reliance for APIs

  • Build strong research hubs and regulatory reforms

• Public Health Diplomacy

  • Use generics as a tool of soft power, like in Vaccine Maitri

  • Build coalitions at the World Trade Organization, World Health Organization, and BRICS to counter Big Pharma monopolies

• Link Trade with Technology

  • Any pricing or export concessions must be tied to technology transfer and local capacity-building

Conclusion

• Indian generics are the lifeline of global healthcare

• They save billions of dollars in treatment costs and provide access to medicines for millions

• India must safeguard its role as the Pharmacy of the Global South by

  • Resisting unfair intellectual property regimes

  • Diversifying its markets

  • Positioning generics as a global public good aligned with the goal of affordable healthcare for all