Drug Counterfeiting in India

The Indian pharmaceutical market is huge, and drugs worth billions of dollars are manufactured and sold every year in India. Some of these drugs are sold locally, and some are exported abroad. India is the fourth largest pharmaceutical market in the world whereas it is also the largest exporter of pharmaceutical drugs worldwide. This rapidly growing pharmaceutical industry is the second most important economic sector for the Indian economy after the Information Technology sector. This is the reason why the Indian government has imposed fewer regulations on this sector. They want the cash flow to continue unabated.

However, recently, the United States has specifically pointed out to Indian counterfeit drugs. This is hurting the interests of the fledgling Indian pharmaceutical sector. Hence, the Indian government has come up with a counterclaim. The Indian government has issued a statement wherein they officially do not agree with America’s accusation regarding counterfeit drugs. Instead, Indians claim that India is the leading source for low-cost generic medicines across the world.

In this article, we will have a closer look at the issue of drug counterfeiting as well as its impact over the economy as a whole.

How Prevalent Is the Counterfeiting Problem?

According to American research, India is not only the largest exporter of pharmaceutical products but also holds a monopoly over counterfeit drugs. About 75% of all counterfeit drugs sold in the world originate from India. It is estimated that Indian companies rake in $200 billion annually by selling counterfeit medicines. Even China is a distant second with less than 10% of the market share of counterfeit drugs.

The problem of counterfeit drugs is prevalent all across the world. However, it is more pronounced in developing nations. About 25% to 30% of all drugs sold in developing nations are counterfeit. On the other hand, only about 10% of the medicines sold in developed countries are counterfeit.

Nevertheless, counterfeit drugs are a menace in every part of the world. It is estimated that more than 300000 people lose their lives annually to this menace. Also, fake drugs are creating wellness problems for patients. Many times they have unwanted side effects creating medical nightmares.

Why Is There Such A Big Counterfeiting Problem?

There is no market in the world which is immune to counterfeiting. However, there are some reasons why counterfeiting has become so prevalent in India. They have been listed below:

• Growing Industry: Firstly, it needs to be understood that the pharmaceutical industry in India has been growing by leaps and bounds. This is the reason that many small and medium enterprises have started operating in the pharmaceutical sector. This sector usually requires huge investments in research and technology. As such, it is not conducive to small and medium industries. This is the reason why the small and medium companies turn to counterfeit. Instead of developing new medicines and creating their own brands, many small companies just start counterfeiting the medicines produced by bigger and more well-known brands.
• Self-Medication: The sale of medicines in India is also not regulated as tightly as it should be. In most developed countries, medicines are not sold without a valid prescription whereas, in India, pharmacists give out medicines to just about anybody who asks for them. Since the medicines are not taken under medical supervision, sometimes there is no way to monitor their effects and gauge whether they are spurious or not.
• Profitable: Manufacturing counterfeit medicines is very profitable. This is because branded drugs are generally sold at a high price. Counterfeit manufacturers do not have to share the branding expenses which result in the high price. This results in windfall gains for manufacturers who are able to replicate the drugs and the packaging of a well-known brand. These counterfeit medicines have their own well developed distribution system as well. There are many markets in various parts of India which are well known for stocking up on and distributing counterfeit medicines.

How to Tackle the Problem?

The problem of counterfeit drugs is widespread and hence difficult to tackle. With the advent of technology, it may now be easier to respond to the threat of counterfeit drugs.

• Barcode: Earlier, manufacturers used holograms to mark the original products. However, now along with the medicines, the holograms can also be counterfeited. Hence, a new system is being developed. This system is based on barcodes and relies on the internet. Under this system, a consumer purchasing a drug can take a picture of a barcode printed on the drug. This picture can then be uploaded to a website whereby the genuineness of the drug can be confirmed.

  The problem with this approach is that the internet infrastructure in India is not very well developed. Also, there are relatively few literate people in India. This approach will only work in major towns and cities. It will be difficult to implement this approach in smaller villages. The more important and monetarily significant export market will also benefit from the introduction of this technology.

• Regulation of Distributors: When it comes to the interiors of the country, developing stronger regulations which govern distributor behaviour may be the only way to stop counterfeiting. However, corruption is deep-rooted and weeding it out from the system may not be an easy task.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.