The Triple Helix @ UChicago

Fall 2017

"India’s Push for its Own Drugs" by Philip Jordache


Abstract: India is taking steps to raise standards for foreign pharmaceuticals, since it relies on China to supply cheap products that don’t work properly and weaken India’s pharmaceutical industry.

Do you know where your medication is coming from? In many nations, consumers tend to give up the privilege of a safe, known drug source for lower prices, often through purchasing foreign drugs at the expense of their own country’s pharmaceutical industry. One of the largest economies that experiences this trend is India. The country currently receives roughly three-fourths of its medical supplies from the People’s Republic of China. This includes raw materials involved in the synthesis of pharmaceutical products, known as Active Pharmaceutical Ingredients (API). Lower costs of production for API in China relative to India serves as the main driving force behind the considerable demand for Chinese drugs in India. This difference in cost has been estimated to be as high as 20%, posing a formidable barrier to increasing self-sufficiency of drug production and consumption, not to mention simultaneously jeopardizing consumers’ health.

Diplomatic relations between the two countries have suffered considerable strain in recent years, only adding to the ominous nature of India’s increasing dependence on China for its supply of pharmaceuticals. As trade between the two countries has consistently expanded by approximately 15% per year since 2007, India’s trade deficit with China has consistently increased. As of the fiscal year that ended in March of 2016, it had reached over 52 billion USD. India does currently enjoy several economic advantages such as limited borrowing of money from external sources – the country’s small representation in this category indicates it has relatively little reliance on China to fund its budget deficit. However, the sheer cheapness and ease of producing goods in China maintains India’s large trade deficit. Although it decreased to approximately 51 billion USD in the 2016-2017 fiscal year, it remains a source of significant concern for the Indian government. Back in 2014, Indian National Security Adviser Ajit Doval addressed the issue of pharmaceutical dependence on China, citing it as an issue of high priority that must be resolved due to its sensitivity to diplomatic relations between the two countries, with the potential to spark a significant predicament in India’s public health system.

The Indian government has made plans to increase domestic API production, and to increase regulation of foreign drugs to prevent low quality pharmaceuticals from continuing to dominate the Indian market. However, Indian consumers must also realize that buying higher-quality drugs is in their own interest, as well as that of their country. Simply put, as long as there is a continued demand for cheap API, Chinese products will continue to dominate more expensive “home-grown” products. Profits drive the production of these drugs, and the lack of regulation in their production and distribution can often lead to buyers experiencing significant discomfort from products not properly prepared or appropriately suited to their symptoms.

This problem is occurring in the United States as well. With drug prices in America routinely higher than those of its neighbors, Americans often look to buy cheaper drugs from Canada or Mexico. In Mexico, drugstores need only a business license to begin operation, and pharmacists may work without any training in dispensing drug prescriptions. Additionally, many cheap drugs are counterfeit, and can often contain substances that amplify the effects that conventional active ingredients would have. Nonetheless, the availability of cheap drugs continues to attract increasing numbers of Americans, and prompts both consumers and producers to cross the border as part of the transactions. The growing demand for cheap foreign drugs can also be seen in the considerable growth in the number of pharmacies in Mexican towns near the border; in the early 2000s, the number of pharmacies in Tijuana, Nuevo Laredo and Tijuana doubled or even tripled. Of course, the selling of cheap drugs for a profit, often by people not properly trained to handle and distribute them, puts many at risk. The smuggling of pharmaceuticals into the United States continues to this day, posing a significant health hazard that must be addressed. Although pharmaceutical tracking busts continually happen in the United States near the Mexican border, these represent only a portion of the unsafe pharmaceuticals distributed, and the increased amount of busts in Arizona among other regions in recent years only underscores the increased need for regulation of the American pharmaceutical market.

Similar issues with cheap, alternative low-quality drugs plague India, and many suffer adverse effects from medication as a result. Nonetheless, as long as a demand for such cheap drugs exist, they will continue to be produced and sold for handsome profits. It is thus up to the consumers of India themselves to realize the benefits of purchasing higher-quality drugs. However, for many, lack of financial means to buy higher-quality products proves the main barrier. Fortunately, the Indian government has offered a promising response; as of October 2017, they plan to subsidize increased regulation of domestic pharmaceutical distribution and even alter the Drugs and Cosmetics Rules to raise licensing fees and increase registration charges. This greater scrutiny on the supply chain of foreign API put in place recently by the Indian government will greatly aid the process of boosting Indian consumption of its own API by decreasing access to lower-quality alternatives from outside of the country’s borders. While not a panacea, these measures represent tangible progress that ideally will lead to tremendous benefit for both the health of Indian consumers and that of the Indian pharmaceutical industry.


[1] Bhatia, Gauri. "China and India: A Love-hate Relationship." CNBC. August 19, 2016. Accessed November 18, 2017.

[2] Dey, Sushmi. "India Plans to Lessen Its Drug Reliance on China." The Times of India. October 08, 2017. Accessed November 18, 2017.

[3] Lunday, Sarah. "When Purchasing Medicine in Mexico, Buyer Beware." The New York Times. April 16, 2001. Accessed November 18, 2017.

[4] Suriano, Jessica. "Prescription Drug Smuggling Busts Spike on Arizona-Mexico Border." Arizona Daily Star. November 11, 2017. Accessed November 18, 2017.

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