Indian pharma sector bleeds $5b a year before curing anyone

Government stock expiry and overstocking account for US$318m.

The Indian pharmaceutical sector loses close to $5.05b (INR 48,000 crore)  annually, nearly a quarter of its domestic consumption expenditure, before medicines translate into health outcomes, a new report revealed.

According to Primus Partners, the largest single source is unused household medicines, pegged at $2.1b to $3.2b (INR 20,000 to 30,000 crore) a year.

Leftover medicines are found in 53% to 75.8% of Indian households, with one study reporting them in 75.8% of 165 homes surveyed, and up to 70% of medicines bought over three years going unused.

Moreover, government stock expiry and overstocking account for a further $318m (INR 3,021 crore).

The report attributes these losses to the absence of a mandatory, nationwide drug recall law, a measure debated in India since 1976 but never enacted, and to the lack of a consumer-facing medicine take-back system.

The State of Karnataka cut its recall time from 30 days to two by digitising the process, and Telangana now uses SMS alerts to flag substandard batches to pharmacies, but both remain state-level rather than national.

To close the gap, the report proposes two national policies. The first, a National Drug Recall Policy, would introduce legally enforceable recall obligations, a centralised recall portal, QR and barcode batch traceability, time-bound retrieval protocols, and public alerts through pharmacies, hospitals and digital health platforms.

The second, a National Medicine Buyback or Take-Back Policy, would create return channels for households, pharmacies and hospitals, routing recovered stock to redistribution, supplier return, or safe disposal, and would lean on quick-commerce networks.

Primus Partners forecasts that a 25% cut in current leakage would recover an estimated $1.05b to $1.26b (INR 10,000 to 12,000 crore) a year.

It argues that the fiscal case for building recall and take-back infrastructure outweighs the upfront cost of digital traceability, regulatory capacity and reverse logistics.

(INR1 = $0.01)