13 July 2008

The sad decline of cheap drugs firms

India's pharmaceutical industry was one of the country's major success stories. Under old patent legislation, manufacturers were able to legitimately reproduce generic drugs so long as different processes were used... So Indian pharma firms got rich by learning to make the cheapest medicines in the world.

One of the companies that benefitted was Ranbaxy. But when legislation changed in 2005, firms like Ranbaxy were no longer allowed to make patented generic drugs. Now they must either come up their own original medicines (an expensive luxury that only the wealthiest companies seem to have achieved) or reproduce ones that have lost their patents (a waiting game).

Now, Frontline reports that about a third of Ranbaxy (and soon maybe half) has been swallowed up by a much larger foreign multinational. It's a sign that Indian drug firms seem to be losing the battle to survive in the global market.

And for consumers, the fact that big companies are swallowing up smaller ones in the developing world spells a future of expensive drugs, designed only for the wealthiest patients.

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