India's anti-brand stance threatens Big Pharma growth

India is not only planning to hand out free, essential drugs to all its citizens. It's also barring branded drugs from public doctors' prescription arsenal. As Reuters reports, the new policy will help patients and generics makers, but it won't help Big Pharma.

The policy move, established last year but publicized only recently, will allow doctors to prescribe free generic drugs. The $5.4 billion plan will expand access to treatment across the country and into groups who have had little to no healthcare in the past.

Doctors will face limits. The free access applies only to a list of generic meds. But this is no simple formulary. Physicians who prescribe branded drugs will actually be punished.

It's quite an unexpected hurdle for international drugmakers who've tagged India as one of their top growth markets. As sales slow in the U.S. and Europe, Big Pharma has been counting on emerging markets, like India, to fuel their sales. Now, drugmakers will have to rethink their emerging markets strategies, particularly if other countries take a page from India's new book, KPMG partner Chris Stirling told the news service.

"Without a doubt, it is a considerable blow to an already beleaguered industry, recently the subject of several disadvantageous decisions in India," Stirling said.

India's anti-branded-drug move follows the government's first-ever compulsory license, which allows Natco Pharma to sell a vastly discounted version of Bayer's cancer drug Nexavar. U.S. officials are trying to fight that license--as is Bayer--but the genie may be out of the bottle. Since Natco's license was announced, India's Cipla slashed price on several of its knockoff cancer drugs, including Nexavar.

- read the Reuters story
- get more from the Economic Times

Related Articles:
Cipla chief aims for more cut-rate cancer drugs
Bayer slams Indian government, Cipla on Nexavar copies
India to begin paying for drugs for 'everyone'
Drug-buying moves threaten sales from India to Ireland