India today can boast of having the third largest pharmaceutical industry in the world, valued at over 21 billion dollars. This tremendous success is a relatively recent phenomenon that begun with liberal economic reforms of the 1990s that were promoted by the then prime minister Rao who set out to remove many barriers that made it difficult to conduct pharmaceutical business in India. Since then the pharmaceutical industry has experienced tremendous growth with exports to over 150 countries.
India‘s core strategy in the pharmaceutical industry was composed of two aspects: the first was to ease patent protections which heavily favored western manufacturers, but harmed the local industry; the second was to develop the necessary expertise to successfully reverse engineer globally prominent drugs so as to create generic versions that worked just as well as the originals but at far lower costs.
A critical advantage to have in the corporate world is to develop a corporation that has values beyond the economic, and focuses on saving the lives of the most vulnerable in society as opposed to just caring about financial benefits. This was the vision of Desh Gupta who founded Lupin Ltd in 1968 so as to create drugs that fight dangerous life-threatening illnesses that affect the poorest people of India. He succeeded in his quest when Lupin Ltd gained global fame for being the largest manufacturer of cost-friendly tuberculosis drugs, which helped combat an epidemic not just in India but also many second and third world countries that needed it most. Many of the company’s drugs has been recognized as safe for use by many international regulatory bodies such as WHO and the FDA; this has gone a long way towards establishing its global reputation. The recent purchase of Gavis Pharmaceuticals and Novel Labs by Lupin Ltd means the company has some pretty ambitious plans for the future.
Cipla Ltd a close competitor to Lupin Ltd has also gained lots of positive reviews for their development of cost-friendly HIV/AIDS drugs for those in the lower income class bracket.
Joint ventures as well as foreign acquisitions are a core part of the growth strategy of many drug corporations in India, and nobody does this better than Sun Pharmaceutical. Today they are the largest pharmaceutical company in India and the fifth largest generics manufacturer. This success became only possible due to a number of strategic investments in Mimet Drugs, Pradeep drug company and Caraco Pharmaceuticals in 1999, 2000 and 1997 respectively. Sun Pharmaceutical’s purchase of Ranbaxy Laboratories is seen as an attempt to expand their research capabilities.
The Indian pharmaceutical industry has been experiencing significant volatility due to factors such as price controls, forced licensing and foreign competition, but there is no doubt that Indian corporations are boldly meeting these challenges with innovative and strategic thinking.