Cheap drugs made in India could transform the global healthcare industry, says Nomura, a Japanese broking and research firm. As healthcare demand in the west increases with ageing populations, cash strapped governments will have to find ways to keep costs under control.
The cost of manufacturing drugs in India, which works out about one-seventh compared to developed markets, could be a part of these measures. Companies best placed to benefit from the shift, according to the broker are Dr. Reddy’s, Lupin, Glenmark and Jubilant Organosys.
Even the US, the world’s largest drug market, has recently passed a healthcare bill that looks at cutting costs as well. Industrialised countries are currently growing at 2 per cent per annum,while medicine consumption is growing at 7 per cent. To present a drain on government finances, prices will have to fall 5 per cent annually, says Nomura in a detailed report on the
pharmaceutical sector. One way to bring down prices would be to allow bio-similars — generic versions of complex biotech drugs.
These will help bring down healthcare costs for governments and patients.