Barack Obama, the new President-elect of United States, mentioned during his electoral tour inter alia that the rising costs of healthcare in US has put the health insurers and the beneficiaries on a collision course resulting in financial ruin thereby leaving families without any coverage at all. Looking beyond the rhetoric, according to a financial daily, is that Indian generic companies could see a significant demand for their low-cost generic offerings. The newspaper report opines that efforts by the President-elect Barack Obama to make healthcare affordable could see a strong demand for Indian generics as well as generic versions of biotech drugs.

The news report further elaborates that growth in generics worldwide is driven by the US, where as many as two-thirds of the prescriptions written are for generics. Estimated at $29 billion, the US in spite of the intense competition and pricing pressures, remains the largest generic market in the world. Indian pharmaceutical industry could be among the prime beneficiaries. Indian generic companies could see a significant demand for their low-cost generic offerings vis-à-vis innovator drugs as they offer best value proposition to patients and healthcare providers. The US already is its single biggest export market, and policy changes debated in the election could greatly increase the flow of foreign-manufactured drugs to US shores. An expert view is that API (active pharma ingredient) units are also slated for a good time as multinationals are working to cut costs and look at sourcing the complete supply chain from India. This makes the Indian biotech companies also anticipate a big market opportunity for their biogeneric or biosimilar drugs – generic versions of patent protected biotech drugs.

India seeks to establish globally as a cost-effective drug manufacturer which is amply reflected in the illustration below. It suggests that at present India has about 75 USFDA approved plants; this is the highest number of FDA approved plants outside the US and also that the cost of manufacturing in India is a fraction of the cost of manufacturing in the US or Europe.

Source: The Financial Express, 17 November 2008