(This article appeared in Newsweek International in April 2005).
For more than a decade, India has been a haven for generic drugmakers that have taken advantage of skilled workers and weak patent laws to become master pharmaceutical knockoff artists. No more, since the Indian Congress last week passed a new patent law to close the loophole that had allowed companies to copy patented drugs. While those in need of cheap drugs may suffer, the Indian economy stands to benefit hugely. International pharma giants, attracted by those same skilled workers and stronger laws, say they plan to shift more of their R&D operations to India. They're also tempted by the booming country's large middle and upper classes, some 50 million people.
As soon as it became clear India would pass the law to comply with WTO rules, Pfizer, Eli Lilly, AstraZeneca and others announced plans to expand their research operations there. The law also gives a chance for Indian drug companies like Biocon and Dr. Reddy's Laboratories to compete internationally by developing their own blockbuster drugs. Analysts say India's $5 billion-a-year drug industry now has access to a research market worth $50 billion. The next Viagra may be from Mumbai.