Is the Indian generic pharmaceutical industry one of the major obstacles to fighting endemic health problems in the country? You may begin to think so after reading this article written by Kiran Mazumdar-Shaw in the Economic Times. Ms Mazmudar-Shaw is the chairman and managing director of Biocon, India’s oldest research-based bio-pharmaceutical company. With an HQ in Bangalore, its group of companies employs a total of 3,000 people and had a turnover of Rs. 990 crore (which, I think, is about $250 million) in its last financial year.

In her article, Ms Mazmudar-Shaw says that corporate India is risk averse and so, therefore, unprepared to invest in the R&D necessary to build the kind of research-based life sciences sector the country’s intellectual capital resources merit. India, she argues, is uniquely placed to generate innovative medicines at attractive prices because of its combination of a skilled workforce and comparatively low wages:

It is only by building intellectual property that the Indian drug industry can differentiate and attain sustainable growth. Learning to compete with globally-benchmarked patent norms is integral to this effort. India Inc must learn to play the patenting game and beat global competitors without bending the rules. It is only through a concerted strategy of building high value intellectual property through the leveraging of India’s cost and skill base that we can gain market leadership.

In a world in which the demand for cheaper medicines has never been greater, India has a huge potential opportunity. But it is one that is being squandered by companies which prefer to manufacture generic versions of branded drugs, a large proportion of which do not actually treat the diseases many Indians suffer from.

It’s thought-provoking stuff. Perhaps instead of encouraging the Indian generic industry to imitate the drugs being produced by large multinationals, NGOs and governments would be better off campaigning for them to invest more money in R&D so as to produce their own, affordable patented products. It’s not as if Indian generic manufacturers are short of money. They are rolling in the stuff. Yet, despite their relatively low spending on R&D, they are generally seen as white knights riding to rescue the world from the evils of the research-based pharmaceutical industry. But if you think of the profits generics make and how little they give back, it is hard to justify such a point of view. It would be interesting to find out from the likes of Oxfam and Médecins Sans Frontières why Ms Mazumdar-Shaw’s analysis is wrong.

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