ImageThe Indian drug industry is pinning its hopes on Obama-led Democrat government to increase its sales in the US as the new administration plans to reduce healthcare cost and increase use of low-cost generic medicines.

India is the fourth largest supplier of generic medicines by volume in the US, the world’s largest market that sells generic drugs worth $33 bn annually. A large chunk of sales of leading Indian drug companies such as Ranbaxy,

Dr Reddy’s and Sun Pharma come from the US. According to the US government website, the Obama government will lower healthcare costs by allowing imports of safe medicines from other developed countries and increase use of generic drugs in public programmes.

Glen Saldanha, Glenmark Pharma CEO & MD said: “Obama is the biggest victory for democracy not just in the US but all over the world. Healthcare reform is one of Obama’s imperatives and his administration has pledged to reform the healthcare system. This would be the biggest boost for generics players in India.”

“The Obama-Hillary combination will be very good for the Indian pharma industry,” said industry expert and independent analyst Sanjiv Kaul. The US government has limited options to contain healthcare cost and India remains the prime country to source safe and economic generic drugs that will substantially reduce healthcare cost in the US and other developed countries, he adds. The opening of the USFDA offices in India recently is testimony to this fact.

The new US administration also says it will ‘take on drug companies’ that block entry of cheaper generic medicines in the US. Indian drug companies have alleged that MNCs create anti-tariff hurdles to block entry of competitive brands in the US. Indian drugmakers pose a threat to the global discovery drugmakers because the latter’s pipeline of patented drugs is drying and the entry of generic equivalents significantly eats into their sales.

A Sun Pharma spokesman said, “Broadly speaking, the new administration is expected to remain pro-generic, which should be a positive for the Indian generic industry.”

But some Indian companies say it will be a challenge for the Obama government to implement its policy against stiff opposition from MNCs. “The new government’s policy is good for the healthcare industry and Indian generic drugmakers. But the big pharma companies have a multi-pronged strategy and a strong lobby to keep generics out of the market.

Indian drugs are being seized in the European ports, there is increased scrutiny of Indian companies and a global public campaign that questions the quality of generic drugs,” says Cipla joint MD Amar Lulla. “The Obama administration has said that it will enter into direct negotiations with drug companies for government mediclaim programmes. This is expected to favour generic drugmakers as the government will bargain for a lower cost.

The Democrats are also expected to outline a regulatory pathway for biotech drugs which will favour Indian companies like Biocon and Dr Reddy’s which plans to launch biotech drugs in the US,” said PWC associate director Sujay Shetty