Free Drugs? India Mulls a New Assault on Big Pharma

Jason Overdorf | GlobalPost | June 25, 2012

Last week Bollywood star Aamir Khan criticized doctors for prescribing costly branded medicines and argued that generics are just as good. And now it seems India is considering offering generic drugs for free to patients at government-run clinics. After Prime Minister Manmohan Singh backed the scheme, the Planning Commission has reportedly allocated $18 million to start the ball rolling. The only glitch: the whole whack will cost more like $5 billion over the next five year plan.

Why no love for Big Pharma? Currently 78 percent of health expenditure in India is borne by patients – and 72% of this is spent on drugs. India has long led the battle against high-cost medicines, and only recently adopted the tough patent laws used in the US and Europe. For decades, India only honored patents on the process through which a medical formulation was made, rather than the drugs themselves, so companies like Dr. Reddy's and Ranbaxy were legally allowed to reverse engineer patented medicines and sell them under their own labels.

Those days are over no, more or less. But Indians, Africans and even a whole lot of Americans are still poor. So it makes some sense to try to make medicine cheaper...