Authors: Baiq Shafira Salsabila, Diospyros Pieter Raphael Suitela, Muhammad Faiz Ramadhan
The Beginning of the Development of the Indian Pharmaceutical Industry
India is one of the developing countries that has soft power through the advancement of its pharmaceutical industry. This progress was seen in the 1980s when India reached a state of self-sufficiency in the production of medicines that slowly had an impact on the global market. According to Winanti (2012) in Ekspansi Global Industri Farmasi India, this can be proven by the number of Indian-owned pharmaceutical companies that have gone global, such as Cipla, Ranbaxy Labs, and Dr. Reddy Labs, which have achieved sales of more than 5 million US dollars based on 2011 data. The development of the Indian pharmaceutical industry in achieving a leading position in the world pharmaceutical market can be traced back to the birth of the Patent Act 1970 which legally did not recognize patents on foreign drugs circulating in India, and gave legal leeway to Indian pharmaceutical companies in producing drugs without worrying about lawsuits from foreign pharmaceutical companies. This method is known as reverse engineering. Furthermore, Kamiike (2019) in The TRIPS Agreement and the Pharmaceutical Industry in India explained that the leeway provided by the Patent Act 1970 was continued by the Government of India by funding research and development (R&D) in fields relevant to pharmaceutical research and health services with an orientation towards the creation of new drugs, such as the establishment of the Indian Council of Medical Research (ICMR), the All India Institute of Medical Sciences (AIIMS), and several other health research bodies.
India’s Response to the TRIPS Agreement Challenge
The timeline of the development of the Indian pharmaceutical industry was forced to undergo a slight change, especially when India officially signed the TRIPS Agreement in 1995. The TRIPS Agreement itself is a binding rule that applies to all members of the World Trade Organizations (WTO) which contains the provision of minimum standards to national governments regarding the regulation of various forms of intellectual property (IP). This signing affected Indian pharmaceutical companies who could no longer produce generic drugs that were patented in other countries. However, the Doha Declaration emerged in 2001 which considered the TRIPS Agreement to provide more benefits to developed countries (Utomo, 2019). The Doha Declaration also discusses the flexibility to countries ratifying the TRIPS Agreement (especially developing countries) in determining and implementing patent law in accordance with public health interests and their needs. As a developing country, the Government of India took advantage of this momentum through the launch of the Patent Act 2005 which contains legal protection to the Indian pharmaceutical industry to continue producing generic drugs from patented drugs while allowing exports under compulsory licenses. Generic drugs themselves refer to drugs that actually have the same efficacy as drugs produced by multinational pharmaceutical companies, but generic drugs are produced without patents so that the price is cheaper. This is also an opening for India in its efforts to access a wider world market, especially in maximizing its generic drug market which has the added value of low prices and easy access for the entire world community.
The Potential of the Indian Pharmaceutical Industry in Overcoming Pharmaceutical Supply Scarcity in the COVID-19 Pandemic
In the dynamics of health security, in fact, access to medicines has experienced obstacles, even before the COVID-19 pandemic. Apart from the reason for unaffordable prices, the supply of medicines also hinders the global community’s access to medicines. Meanwhile, the scarcity of access to medicines is affected by parallel trade, which is aimed at the actions of parallel traders to resell medicines at a much higher price.
The arrival of COVID-19 in 2020 seems to be a nightmare for the world health industry, including the Indian pharmaceutical industry. The reason is that the COVID-19 pandemic has hampered the production and distribution of medicines, which has led to the distability of the world’s drug supply. This condition worsened when many pharmaceutical factories were closed due to quarantine policies, border closures, and export bans. On the one hand, this action is a preventive measure. On the other hand, this condition shows how poor access and supply of drugs in the global landscape is in the face of disease outbreaks.
Drug shortages are further exacerbated, especially in the production of hydroxychloroquine, which has antiviral effects against the SARS-CoV virus and inhibits viral replication, thus preventing infection and spread of SARS-CoV. This has led to increased demand for hydroxychloroquine, despite its dwindling supply. This problem could have been solved through India’s capability as a pharmaceutical raw material provider, which is estimated to have produced 60 metric tons of hydroxychloroquine for the domestic market. Unfortunately, pandemic conditions are hampering India’s drug distribution through mobility restrictions. Given India’s potential in the pharmaceutical industry, India is projected to play an important role in handling the COVID-19 pandemic. Moreover, India is a much cheaper producer of generic drugs, making Indian pharmaceuticals key to the urgency of drug supply and affordability in the global landscape. Referring to the global R&D ecosystem moving at a collaborative pace, India is expected to become the innovation hub of a more affordable global pharmaceutical industry.
The Irony of Global Drug Accessibility and the Significance of Indian Generics during the COVID-19 Pandemic
It is inevitable that the pandemic strikes the whole world indiscriminately, as the demand for medicines increases during the health crisis. Meanwhile, the supply of medicines is limited and unable to keep up with the high demand. The pandemic reflects that the global health infrastructure is not ready to deal with sudden global-scale health disasters. During a health crisis, the global community needs large quantities of medicines – at affordable prices – to stay alive. However, this is not the reality given the high prices that multinational pharmaceutical companies charge for medicines, especially during a pandemic. It is not easy for those living in developing countries to get access to these medicines. Moreover, the high demand for medicines during a pandemic means that stocks are limited. Unexpectedly, India’s generic medicines became the “heroes” of developing countries during this critical time due to their affordability and efficacy. Through a case study of China, with the high number of COVID-19 cases in China, the demand for Indian generic drugs has increased dramatically as they are considered effective in helping the Chinese people fight the COVID-19 virus. However, this increase in demand is not in line with the Chinese government banning the circulation of generic drugs from India, even though test results assess Indian generic drugs have the same benefits as patented drugs. This situation has prompted Chinese people to obtain drugs such as Primovir, Paxista, Molnunat and Molnatris through black markets and e-commerce.
The above realities show that global health issues are increasingly complex. Meanwhile, the global health infrastructure is not strong enough to deal with health crises that may suddenly hit the whole world. This is reflected in how the distribution system and accessibility of medicines are still not progressive enough. It is still difficult for people in developing countries to obtain medicines at affordable prices due to the high prices set by the multinational pharmaceutical industry, coupled with the existence of the TRIPS Agreement which further strengthens the patent rights of these medicines. As a result, the medicine market tends to be monopolized by multinational companies with the power of patents and tends to benefit developed countries. Even though countries like India have continued to try to distribute their generic drugs in order to promote health emancipation in developing countries, limitations remain; some countries, such as China, as described earlier, consider Indian generic drugs as illegal drugs. In fact, generic medicines are the most realistic option that can be used by people in developing countries due to their efficacy and affordability.
The dynamics of the drug distribution system in the COVID-19 pandemic case study leads us to understand that the global health infrastructure is inadequate because it has not been able to realize a global drug distribution system that is inclusive and affordable for everyone. Inclusiveness and accessibility in the global medicine distribution system will not be achieved if there is still a monopoly of multinational giants in the global medicine market. Competition in the pharmaceuticals market may be important to some as it brings in a lot of profit. However, what is equally important to consider is the humanitarian aspect – how everyone in the world should be equally entitled to health through access to health facilities and infrastructure, one of which is in obtaining affordable medicines.