PER 2015
While the generic drugs producers have a lower cost of production but they still charge a higher selling price, people will think that it is immoral for them to charge a price as they are just copying the drug content from those big pharmaceutical researching firms. At the same time, these generic drug producers claim that they are facing a certain difficulties such as most of the countries have import tax charged on the drugs imported to these countries, they need to maximize their profit while their main income is relying on those expired patent drugs from the big pharmaceutical company. Under these reasons, the generic drug producers will tend to charge a high price even they have a lower production cost. According to the latest figures, India is the leading country of the generic drug manufacturing industry while the countries with the most demand for drugs will be more likely the developed countries resulting most of the generic drugs will be exported from India and hence the supply for those less developed countries will be limited with less consumers as they will have a lower standard of living so they will be less aware to the health problem and a less proportional amount of income will be spend on drugs. At the same time, the general price level is increasing, showing an inflationary effect which will likely causing an increasing cost of raw materials for drugs production. As for the another reason, the generic drug producers will want to maximise their profits while at the same time they know that their income flow is unstable as the India government may have law enforcement on the drug patent once the India is going to join the World Trade Organization, this will become a great anxiety for these generic drugs producers and they will have lower business confidence and being reluctant to lower the selling price. Also they know that India have the potential to show a great improvement in the future and become a leading big country in the world which requires more specialisation with more trading partners, so it is inevitable for them to join the World Trade Organization. Apart from these factors, the low future business prospect is also due to the slow progress of the researching in the big pharmaceutical company. A recent article in The Economist states, ‘over the past decade, more and more medicines have been going on to the market with lower and lower levels of benefit.’ 6 These brand drugs are going to just make some minor changes to the composition of the drug and apply for a new patent so as to minimize the effect of the emergence the generic drug manufacturing industry. The generic drug producers can still produce the generic drugs in India is mainly due to the India didn’t accept these type of re-new patent of the brand drugs. An extract has been quoted ‘Patents are designed to reward a person’s or a company’s invention by preventing others from copying and selling a product. That gives the patent holder a monopoly on supply. And pharmaceutical companies work hard to gain and extend such protections. India’s law sets a higher bar for protection than in some other countries, limiting the ability of companies to get patents for new versions of drugs whose active ingredients were previously known unless they can show significant therapeutic benefit. U.S. and European patent laws more readily grant patents to updated versions regardless of whether they offer major improvements in efficacy over the original compounds.’ This quoted extract has explained the origin of generic drug war in India.
Despite the low business prospect, the current situation of the generic drug industry is still having a great support from the India government. For example there is a typical case of the drug patent war
6 http://www.economist.com/news/leaders/21592619-patents-drugs-are-interests-sick-well-industry- protection-should-not
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