The new product patent regime has enabled Indian pharma companies move up their value chain and focus on R&D to come out with new blockbuster drugs.

The Indian pharmaceutical industry has come a long way from its modest beginnings in the 1970s to become a significant manufacturer of healthcare products, meeting almost 95% of the country's healthcare needs. The industry, with over 20,000 registered manufacturers in its ranks, has been growing at a fast pace and has made significant progress in the recent past. It is one of the largest-ranking 4th in volume-terms and 13th in value-terms-in the global pharmaceutical industry. It is one of the globally competitive industries in India with a strong R&D base, with exports accounting for nearly 32% of the total revenues and 90% of the exports constituting generic drugs.

Currently, the Indian pharmaceutical industry is valued at approximately $8 bn and is the fifth largest manufacturer of bulk drugs in the world. According to an estimate, Indian drug makers will have 33% share in the global generics market by 2007 compared to the current 4%. The industry is also creating employment opportunities for many. In the year 2005, the domestic pharma industry employed half a million people directly while it provided employment to another two and a half million people indirectly, taking the total employment generation of the industry to three million people. And 28 pharma companies figured in the 500 list, the top three on the basis of net sales being Ranbaxy Laboratories Ltd., Cipla Ltd., and Dr. Reddy's Laboratories.

The year 2005 was a landmark in the history of Indian pharma with India becoming TRIPS compliant. The Indian pharmaceutical industry underwent a sea change with the new product patent protection law coming into force from January 1, 2005. As per the law, a new product or drug discovered after January 1995 can be patented, which gives the manufacturer the exclusive right to manufacture that product or drug. In other words, the inventor is granted monopoly of the drug for a specific period of time and during that period no other company can manufacture that drug without paying a patent fee to the patent holding company.

The Analyst Magazine, Pharmaceutical Industry, Indian Pharma Companies, Indian Pharmaceutical Industry, Global Pharmaceutical Industry, Ranbaxy Laboratories Ltd., Boston Consulting Groups, Food and Drug Administration, FDA, Aurobindo Pharma Limited, Drug Master File, DMF, Indian Governments, Dr. Reddys Laboratories, Torrent Pharmaceuticals, Sun Pharmaceuticals, Distribution Network.