Obama's key healthcare law may boost Indian generics

The historic ruling of the US Supreme Court last week which upheld President Barack Obama's Patient Protection and Affordable Care Act to make minimum healthcare insurance a must for the US citizens could also be a big opportunity for the Indian generic drug industry, reports CNBC-TV18's Archana Shukla.

Also watch the accompanying video

Barack Obama's big victory could turn out to be a big opportunity for the Indian generics drug industry. With the US Supreme Court upholiding Obama's healthcare reforms, mandating all Americans to secure "minimum essential" health insurance, another 26 million newly-insured patients will be added to the 250-million insured in the US.

Generics form 75-80% of all prescribed drugs sold in the US and experts say the expanding insurance coverage will force insurance companies to push for more generics to keep costs low.

Potential beneficiaries could be Indian generics drug companies like Dr. Reddy's Laboratories , Lupin , Ranbaxy and Glenmark .

Although the Healthcare Reform Law imposes an annual fee on drug firms who sell branded products at a premium in the US market, generic firms selling drugs at already discounted rates will be spared of the fee.

According to report submitted by Edelweiss Securities, Section 10609 of the Healthcare Reform Law is intended to increase access to low-cost generic drugs by preventing innovators from delaying approval of generic products by making changes to the labels of the branded or listed drug. This provision will enable faster approvals of generic drugs.

Besides, the survival of the Biologics Price Competition and Innovation Act also makes way for cheaper biotech drugs and is expected to fuel the growth of the biosimilars market from the current USD 3 billon.

This Act which offers interchangeability of biologics will boost the efforts of pioneering biosimilars giants like Sandoz and Hospira and Indian firms like Biocon , Dr Reddy's and Lupin who have been working on a strong biosimilars pipelines. 'Obamacare' could be a shot in the arm for the US President as he gears up for elections and a big opportunity for the Indian pharma industry.