India poised for pharmaceutical boom

India is revamping its drug industry, hoping to duplicate success of IT sector.

"They say, 'Thank you very much. You saved our lives,' " he remarks.

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Dr. Thangsing knows they are speaking not of him, but of his country. For decades, India's drugmakers have been the pharmacy for the world's destitute, finding ways to copy the best medicines at the lowest prices. By some estimates, India's generic medicines treat half the AIDS patients in the developing world.

Yet this picture has begun to change since India decided to comply with global patent standards last year. Now as never before, Indian pharmaceutical companies are looking to expand business in rich countries, which, critics say, will come at the expense of the world's poor. The intent is to follow the footsteps of India's information-technology (IT) sector, which parlayed lower costs and improved innovation into India's greatest modern success story.

The timing could be fortuitous. As the cost of healthcare rises worldwide, Indian pharmaceuticals have positioned themselves to take advantage. For instance, Indian drugmakers now have 75 plants approved to make drugs for the American market - the most of any nation except the United States itself. Also, like Indian IT a decade ago, pharmaceuticals are on the cusp of an outsourcing trend that could become a $3-billion-a-year industry by 2010.

"IT reached that threshold" as a global brand, says Ramesh Adige, a spokesman for Indian drugmaker Ranbaxy. "The pharmaceutical industry is right there."

Leaving behind the poor?

The concern, however, is that as the industry reaches for newfound levels of prosperity, it will