India now ranks first in the world for exports of generic drugs, with a trade worth 50,000 billion rupees a year, the government has said.

The country is now exporting to more than 200 nations worldwide, and exports totaled around $8 billion in 2008-9, the majority going to the USA and Europe, according to Union Minister of State for Chemicals and Fertilisers Srikanta Jena. The industry’s achievements could create more than 500,000 high-value jobs in India and provide the nation with low-cost treatments for life-threatening conditions such as malaria and tuberculosis, he added.

The Minister was speaking at the opening of three generic drug stores in Orissa, the fifth Indian state to launch a national campaign for universal access to generic medicines. Included in the campaign, entitled Jan Ausadhi Abhiyan, will be publicity and education to make patients aware that cheaper generics are as effective as their branded equivalents, said the Minister, and he called on the industry to support these initiatives “in a big way.”

In other news, Indian drugmakers have responded cautiously to last week’s Union Budget 2010-11 proposals, warning that the 14% increase planned for the Health Ministry’s budget will not be sufficient to meet the government’s goal of a 1%-2% increase in Gross Domestic Product (GDP) spending on health care. They have welcomed the fact that excise duties on finished pharmaceutical products seem set to remain at 4%, but believe that the increase in Minimum Alternate Tax (MAT) from 15% 18% is a disincentive for industry, and could increase prices of medicines to consumers by around 2%, although other commentators believe that drugmakers will pass the MAT rise on only selectively, or not at all.

The firms have welcomed the Budget’s proposed increase in weighted deductions from 150% to 200% on in-house R&D expenditures (although the industry had asked for 300%), and from 125% to 175% for payments to national laboratories, research associations, colleges, universities and other institutions for scientific research. Dr Reddy’s Laboratories, Lupin, Ranbaxy and Sun Pharma will particularly benefit from this concession, according to an analysis by the Business Standard newspaper.

However, the Association of Biotechnology Led Enterprises (ABLE) points out that a significant portion of R&D costs for biotechnology companies – such as filing international patents and conducting clinical trials - are not in-house, but are legitimate R&D costs which should be covered under the weighted deduction scheme.

China “more than welcomes” Indian drugmakers

Meantime, China has said it “more than welcomes” the presence of drugmakers from India as it implements its massive health care reform plans. Speaking this week at the annual meeting of the National People’s Congress in Beijing, China’s Health Minister Chen Zhu pointed to his country’s “huge potential” for healthcare services and medicine and added: “we know India's pharmaceutical sector, including non-generic and creative medicine, is leading the developing world.”