The Indian government is finalising a plan to give out billions of pounds worth of essential medicines to patients in government-run hospitals and clinics - the biggest scheme of its kind in history.
The landmark project would be another massive blow to Western pharmaceutical giants who are already struggling to find a foothold in the world's second most populous country.
The West's big pharmaceutical firms - or "big pharma" - have long been thwarted on the sub-continent where the authorities freely allow generic drug companies to manufacture cheap copies of patented medicines.
Doctors will be ordered to only use generic drugs in the programme, which is expected to be approved in the next couple of months.
If a doctor prescribes a branded medicine they will face a hefty fine.
Analysts believe the policy will cause the big pharmaceutical companies to rethink their emerging markets strategy.
At the moment companies, like Pfizer and GlaxoSmithKline, spend a fortune on research only to see their precious formulations copied by generic drug companies in India.
Healthcare specialists have welcomed the policy though and claim it may be a large first step towards universal healthcare.
India's rapidly growing population currently stands at 1.2 billion people, just behind China.
At the moment people can receive free healthcare at government-run hospitals but the cost of medicines for the poor mean many cannot follow the treatment programmes prescribed.
The free drug proposal aims to reverse that but there are concerns about how effective the policy will be in a country where there is widespread corruption and inefficiency.
Medecins Sans Frontieres' head of mission in India, Pierangelo Gandini, said: "In principle we think the plan is a great idea. But the implementation may be a problem because much more work needs to be done as some of the health services in the country, particularly in rural areas where the need is greatest, still do not work to a basic standard."
He added: "We are concerned about whether the plan will be implemented properly."
Officials at the health ministry say more than £2bn will be spent on 350 essential generic treatments over the next five years.
It is expected up to half the population will benefit from the new policy.