Key Points
- Indians bought about ₹2.41 lakh crore of medicines in 2025[1], mostly branded generics: old molecules sold under many brand names, nearly 60,000 of them[2].
- Because the molecules are the same, companies compete for the doctor's choice of brand. That is why medical representatives, samples and, at times, illegal freebies exist.
- Medicines travel maker → carrying-and-forwarding agent → wholesaler → retailer, with roughly 3%, 10% and 20% margins on a ₹100 medicine[3].
- Marketing rules (UCPMP 2024) ban gifts, travel and cash to doctors but are voluntary[4]; the Supreme Court has held such freebies illegal[5].
- Indian companies spend about 6% of revenue on research[6]; India's first home-grown antibiotic took 14 years and ₹500 crore[7].
What India Buys
The best-selling brands by annual sales in 2025 were Augmentin (an antibiotic) and Glycomet GP (a diabetes combination); by December, the new weight-loss and diabetes injection Mounjaro had moved to first place in monthly sales[1]. Most medicines sold are branded generics: off-patent molecules made by many companies and sold under brand names.
How a Medicine Reaches the Patient
- MAKEManufacturerMakes and brands the medicine; sets the printed MRP
- ₹70C&F agentStores and forwards stock for one company in a state; about 3%
- ₹72WholesalerStockist supplying many shops; about 10%
- ₹80RetailerThe chemist; about 20%
- ₹100PatientPays MRP, or less with a discount
- Price control. Medicines on the National List of Essential Medicines are price-controlled under the Drugs (Prices Control) Order, 2013. As of December 2025, ceiling prices were fixed for 935 formulations; re-fixing prices under the 2022 list cut them by about 17% on average, saving patients about ₹3,802 crore a year[9].
- Trade margins. Margins on medicines outside price control are largely unregulated. A 2019 pilot capped trade margins on 42 cancer medicines; a parliamentary committee in December 2025 criticised a five-year delay in extending it[10].
- Doctors who dispense. A registered doctor may supply medicines to their own patients without a shop licence, provided they do not run a shop open to the public[11]. This is the legal basis on which clinic dispensaries operate.
- Generic stores. 18,646 Jan Aushadhi stores sell 2,110 generic medicines at 50 to 80% below brand prices[12].
- Online pharmacies. Rules for e-pharmacies are still proposals, not law. Chemists called a nationwide strike for 20 May 2026 against unregulated online sales and deep discounting[8].
How Pharma Companies Reach Doctors
When many companies sell the same molecule, the doctor's pen decides who sells. Companies employ large field forces of medical representatives who visit clinics, explain products and leave samples. The legitimate part is information. The illegitimate part is inducement.
| Rule | What UCPMP 2024 says[4] |
|---|---|
| Gifts | No gift for the personal benefit of a healthcare professional or their family |
| Travel and hospitality | No paid travel, hotel stays or expensive meals, except for speakers at medical education events |
| Cash | No cash or monetary grant under any pretext |
| Free samples | Only to doctors qualified to prescribe them; no more than 12 sample packs per drug per doctor per year; total value under 2% of the company's domestic sales |
| Medical education events | No events abroad; spending published on the company's website |
| Enforcement | Ethics committees in industry associations; appeals to a committee under the Secretary, Department of Pharmaceuticals. The code is voluntary |
- The Supreme Court on freebies. In Apex Laboratories (February 2022), the Court held that gifts to doctors are prohibited by the medical ethics regulations, so companies cannot deduct their cost as a business expense[5].
- The Dolo-650 allegation. In August 2022, the federation of medical representatives told the Supreme Court that tax authorities had accused the maker of Dolo-650 of distributing ₹1,000 crore of freebies to doctors, and asked for the marketing code to be made law[13]. The Court called it "a serious issue".
How New Medicines Are Funded
5.9%Average research spend of India's ten largest listed drug makers, as a share of revenue (highest: Dr. Reddy's, 8.2%)GlobalData, FY 2023-24[6]
$985 mMedian research and development cost of a new medicine reaching the US market, 2009 to 2018 (mean $1.3 billion)JAMA, 2020[14]
14 yearsAnd ₹500 crore to develop nafithromycin, India's first indigenously developed antibiotic, for drug-resistant pneumonia; the government's BIRAC funded ₹8 crore of its final trialsDown To Earth, 2024[7]
₹5,000 crThe government's PRIP scheme (2023-24 to 2029-30): ₹700 crore for research centres at NIPERs and ₹4,200 crore for company researchDepartment of Pharmaceuticals[15]
Indian companies generally spend 5 to 10% of revenue on research[6]; Sun Pharma, for example, spent ₹3,178 crore in 2023-24[6]. The government's scheme supports six domains: new drugs, complex generics, biosimilars, cell and gene therapies, high-value patented or near-expiry drugs, and advanced medical devices, and co-funds up to 35% of a late-stage project's cost[15].
What This Means on the Ground
| Ground reality | Consequence for patients | What 1Heath does |
|---|---|---|
| Same molecule, many brands, different prices | Patients cannot compare; switching brands can duplicate the same drug | Prints the generic beside every brand; flags duplicates across brands |
| Brand choice influenced by marketing | Costlier or irrational combinations | Checks banned combinations; suggestions never depend on margin |
| Chemists dispense from a slip | No allergy or interaction check at the counter | Pharmacy app receives the signed prescription with allergy flags |
| Clinic dispensaries buy through several distributors | Fragmented ordering, stock-outs | Ordering from licensed suppliers through one app, with no influence on prescribing |
Sources
- ANI via The Tribune. Indian pharma market reached Rs 2.40 lakh crore with 8.1% growth in 2025 (Pharmarack report). tribuneindia.com
- Government factsheet on India's pharmaceutical sector, as reported by Medical Dialogues, 23 March 2026. health.medicaldialogues.in
- BioSpectrum India. Can phased trade margin rationalisation boost pharma growth? (channel margins by route). biospectrumindia.com
- Medical Dialogues. Centre notifies Uniform Code for Pharmaceutical Marketing Practices (UCPMP) 2024, 13 March 2024. medicaldialogues.in
- Lakshmikumaran and Sridharan. No tax exemption on gifts to doctors by pharma companies (Apex Laboratories v. DCIT, Supreme Court, 22 February 2022). lakshmisri.com
- BioSpectrum India. Indian pharma hits R&D salvo (GlobalData, FY 2023-24 annual reports). biospectrumindia.com
- Down To Earth. India gets new indigenously developed antibiotic for drug-resistant pneumonia, 26 November 2024. downtoearth.org.in
- ETV Bharat. 12 lakh pharmacies across India to shut on May 20 over e-pharmacy concerns, May 2026. etvbharat.com
- Medical Dialogues. 935 essential medicines saw 17% price cut, Minister informs Parliament (figures as of 1 December 2025), 13 December 2025. medicaldialogues.in
- Medical Dialogues. Parliamentary panel raps DoP, NPPA for 5-year delay in trade margin rationalisation under DPCO, 15 December 2025. medicaldialogues.in
- LiveLaw. Doctor can't be punished under Drugs and Cosmetics Act for storing small quantities of medicines: Supreme Court (S. Athilakshmi, 15 March 2023). livelaw.in
- PTI via The Week. Over 18K Jan Aushadhi Kendras opened in last 11 years, 24 March 2026. theweek.in
- LiveLaw. Pharma companies distributed Rs 1,000 crore freebies among doctors to prescribe Dolo-650: FMRAI tells Supreme Court, 18 August 2022. livelaw.in
- Wouters OJ, McKee M, Luyten J. Estimated research and development investment needed to bring a new medicine to market, 2009-2018. JAMA, 2020 (LSHTM summary). lshtm.ac.uk
- Medical Dialogues. DoP notifies Rs 5,000 crore PRIP scheme to boost pharma and MedTech R&D, 4 October 2025. medicaldialogues.in