India Sold a $10,000 AIDS Drug for $350. A 1970 Law Made It Legal.

On 7 February 2001, an Indian drug company broke the price of the AIDS epidemic.

Cipla, a Bombay firm run by a chemist named Yusuf Hamied, offered Médecins Sans Frontières a three-drug combination for HIV at $350 per patient per year. About a dollar a day. African governments buying in volume could have it for $600.

The same three drugs, from Western brand-name companies, cost $10,000 to $15,000 a year.

Hamied did not dress it up as a business plan. He said Cipla would lose around $150 on every yearly course, and offered to supply “10,000 doses or 20,000 or 30,000, however many they want.”

Antiretrovirals are the medicines that hold HIV down inside the body and turn AIDS from a death sentence into a condition people live with for decades. In 2001 they existed. Southern Africa was burying people by the million anyway, because the price had been set for rich countries.

What a dollar a day did

Cipla could not treat Africa by itself. What the offer destroyed was the belief that the price was a fact of nature. Brand-name makers cut their prices within months, and donor programmes doing hopeless arithmetic could suddenly write plans that added up.

The follow-through is documented. A study in the Journal of the International AIDS Society tracked donor-funded HIV drug purchases across 115 low and middle income countries from 2003 to 2008. Indian generic makers, firms selling the identical molecule under its chemical name rather than a brand, supplied more than 80 percent of that market by volume from 2006 on, and 87 percent of it by 2008, though only about 65 percent by value. The most-used first-line combination fell from $414 per person per year in 2003 to $74 by 2008.

MSF now says 97 percent of the HIV medicines it uses are Indian generics. Worldwide, about 32 million people are on antiretroviral treatment, against 7.6 million in 2010.

None of that would have been legal under the patent rules most of the world used. India used different ones, deliberately, and had since 1970.

One sentence of law

A patent is a legal monopoly. Register your invention and for a fixed period nobody else may make or sell it. In most countries that protection covers the product: the molecule itself, whoever makes it and however.

The Indian Patents Act of 1970 did something else. It granted patents on the process of making a medicine, and refused them on the medicine.

That distinction is the whole industry. If a Swiss company patented one chemical route to a drug, an Indian chemist could not copy that route. She could work out a different route to the identical molecule and sell the result, legally, at whatever price she chose.

The Act pushed harder. A process patent on a medicine ran five years from sealing or seven from filing, whichever came first, against fourteen for everything else. Even the monopoly you got was short.

What that bought

Chemists.

A law that rewards finding a cheaper route to a known molecule produces people who are very good at exactly that. Indian process chemistry became a national skill, practised in hundreds of small factories and sharpened by a home market too poor to pay Western prices.

Ownership moved with it. Foreign firms held about two-thirds of the Indian drug market in 1970. By 2004, a US International Trade Commission study found, they were down to 23 percent.

The pharmacy of the world, counted

India is now the third largest drug producer on earth by volume and fourteenth by value, according to Invest India, the government’s own investment agency, and supplies roughly 20 percent of the world’s generic medicine by volume.

Indian firms filled 47 percent of all generic prescriptions in the United States in 2022, saving the American health system an estimated $219 billion that year. Pharmaceutical exports reached $30.47 billion in 2024-25.

Vaccines are where the boldest claims get made, so handle them carefully. By the government’s own count India accounts for around 60 percent of world vaccine production, a figure worth treating with some caution: it traces back to India’s share of the vaccines UNICEF buys rather than to global output, and critics say it is inflated. India’s share of COVID-19 doses, for comparison, was closer to a fifth. Serum Institute of India in Pune is the largest vaccine maker on the planet by doses produced and sold, more than 1.5 billion of them, going to roughly 170 countries. By its own count, about 65 percent of the world’s children have had at least one Serum shot.

When UNICEF or the WHO buys vaccines for a poor country’s immunisation drive, the box very often has an Indian address on it.

2005: the rules caught up

India joined the World Trade Organization in 1995, and with it TRIPS, the treaty that obliges members to grant patents on products, medicines included. India used the full transition period, then had to comply. In 2005 Parliament amended the Patents Act and product patents on drugs became law.

That should have ended the story. It did not, because of what Indian lawmakers wrote into the amendment.

Section 3(d) says a new form of a known substance cannot be patented unless it works measurably better. The target is a practice called evergreening: taking a drug whose patent is running out, changing something small, a salt, a crystal form, a dose schedule, and claiming a fresh twenty-year monopoly on the old medicine.

India said no to that, in statute, in a way almost no other country had.

The cancer drug that tested it

Novartis had a drug called Glivec, one of the real triumphs of modern medicine, which turned chronic myeloid leukaemia from a killer into a manageable illness. In India it sought a patent on a particular crystal form of the active compound, imatinib mesylate.

The stakes showed in the price. Glivec sold for about ₹120,000 a month. Indian generic versions ran ₹8,000 to ₹12,000.

The case ground on for seven years. On 1 April 2013 the Supreme Court of India refused the patent: the crystal form did not show the improved effectiveness Section 3(d) demands, and Section 3(d) itself was constitutional. India could set a higher bar for drug patents than the West, and it had.

The part Indian pharma does not enjoy discussing

Now the other side, and it is heavy.

In 2022 the WHO issued an alert on four cough syrups made by Maiden Pharmaceuticals of Haryana after 66 children died in The Gambia of acute kidney injury. The syrups contained unacceptable levels of diethylene glycol and ethylene glycol, industrial solvents that are cheap, sweet and poisonous. That same year children died in Uzbekistan after taking a syrup from another Indian firm, 18 by the first count and 20 in later reporting.

It happened again at home. In October 2025 the WHO issued Medical Product Alert No. 5/2025 naming three Indian-made oral liquids, Coldrif, Respifresh TR and ReLife, after a cluster of child deaths in India. At least 23 children in Madhya Pradesh died. The Coldrif syrup tested at 48.6 percent diethylene glycol, against a permitted limit of 0.1 percent, which is nearly 500 times over. The factory was sealed and the owner arrested.

These are not accidents of chemistry. They are failures of testing that any competent lab catches in an afternoon.

The cause is structural. Manufacturing licences in India are issued by state drug controllers, whose staffing, laboratories and appetite for enforcement vary enormously. A big exporter answering to the US Food and Drug Administration works to one standard. A small unit selling at home on a state licence can work to quite another.

Nor are the big firms clean. In 2013 Ranbaxy, then India’s largest drug maker, pleaded guilty to seven felony counts in the United States and paid $500 million over adulterated drugs and false statements to the FDA about two Indian plants. US regulators still send warning letters and import bans to Indian sites every year.

The ingredient India does not make

An active pharmaceutical ingredient, or API, is the chemical that actually treats you, before it is mixed with binders and pressed into a tablet. India is the world’s great tablet maker. It is not the world’s great API maker.

China is. India imports most of its bulk drug chemicals, and for a long list of critical ingredients Chinese suppliers account for 70 percent or more of India’s imports. For some antibiotic ingredients the share is higher. A ₹6,940 crore incentive scheme approved in 2020 is rebuilding home capacity, and progress is real but modest.

The pharmacy of the world buys its raw material from one neighbour.

The argument from the other side

Research-based drug companies make a case that deserves stating properly rather than waving away.

Bringing a genuinely new medicine to market costs a great deal and mostly fails. The patent monopoly is how that spending is recovered. Weaken it, the argument runs, and you get fewer new medicines for everyone, including the poor patients the weakening was meant to help. On this view Section 3(d) does not only block evergreening. It also blocks improvements that matter, better-absorbed forms and heat-stable versions, and it tells companies India is not a market worth developing for.

Washington agrees enough to act on it. India has sat on the USTR’s Special 301 Priority Watch List for decades, and the 2025 report again names Section 3(d), India’s compulsory licensing powers and its lack of protection for clinical trial data.

The reply is equally serious: most of the world’s people were never going to buy the patented product at the patented price, so the monopoly was not protecting a sale that would otherwise have happened. Both can be true. Where the line sits has never been settled.

The point

A country that came out of colonial rule with almost no modern industrial base now keeps a large share of the world alive at prices the world can afford. It has quality failures it has been slow to fix, and it buys the raw chemicals from a neighbour.

It got there by refusing the rules it was handed. In 1970 India decided a medicine was not the sort of thing a person could own, only the method of making it, then spent fifty years turning that argument into factories. Most countries take the rules as given. India wrote its own, and a good part of the planet takes its medicine because of it.