The Indian Pharmaceutical Market


The Indian pharmaceutical industry, as of 2015, was valued at $22 billion in revenues, ranking 3rd globally in terms of medicine sales volume and 13th in revenue. This marks a significant evolution from 1969, when 95% of medicines sold in India were by multinational firms. The industry has since transformed, notably after the implementation of the process patent act in 1969, enabling Indian companies to reverse engineer many molecules. This pivotal change positioned Indian firms as leading suppliers of affordable medicines globally. By 2005, India had the largest number of US Food and Drug Administration approved production plants worldwide (Banerji, 2013).

Market Characteristics

The Indian market is distinctive, with 95% of medicine sales comprising off-patent pharmaceutical molecules, or generic drugs. These include both unbranded generics, like Amoxycillin and Paracetamol, and branded generics, such as Augmentin (a branded version of Amoxycillin), which are actively marketed by firms. Despite the market’s relatively modest scale in revenue terms compared to developed economies—Augmentin, for instance, reported annual sales of INR 2 billion (USD 28 million) in 2014—the volume of sales is considerable. This is attributed to significantly lower prices in India compared to developed markets.

Economic and Healthcare Context

With a per capita income of $1,800 in 2014, and in the absence of universal healthcare or insurance coverage, the Indian market is uniquely positioned. The availability of cheaper generic alternatives plays a crucial role in making medicines accessible to a broader segment of the population. High-priced therapies face challenges in gaining traction due to these market dynamics (Subramanian et al., 2014). The Drug Price Control Order (DPCO) was introduced against this backdrop, aiming to achieve a critical policy goal of the Indian government: enhancing access to affordable medicines for the people.

The Role of DPCO

The DPCO serves as a regulatory mechanism to ensure that essential drugs are available at reasonable prices. It reflects the government’s commitment to balancing the need for innovation in the pharmaceutical sector with the imperative of making healthcare accessible to all segments of the population.


Banerji, Amit, and Maulana Azad (2013), “Review of Asia-Pacific’s Healthcare Systems with Emphasis on the Role of Generic Pharmaceuticals”, Academy of Health Care Management Journal, 9 (1/2), 53-74.

Subramanian, Ram, Nikhil Mutyal, and Emma Nechamkin (2014), “Market-Based Price Controls in India?”, Pharmaceutical Executive, 34 (4), 64-65.