1. Push to generic drugs not to have much impact

Push to generic drugs not to have much impact

The past week saw the latest move in the government’s aim to reduce healthcare costs and push generic drugs. It is now aiming to get doctors to prescribe generics instead of brands.

By: | Published: April 25, 2017 5:48 AM
The push to get doctors to prescribe generic names, is one of the many steps the government has been taking to reduce medical costs in India. (Reuters)

The past week saw the latest move in the government’s aim to reduce healthcare costs and push generic drugs. It is now aiming to get doctors to prescribe generics instead of brands. In our view, without steps for improving quality standards for drugs available in the market, the move will not have much material impact and will shift power from doctors to pharmacists. We believe transition to generics is a long term aim where the first step needs to be quality.

The past week saw steps by government to get doctors to write generic names on prescriptions instead of the current practice of prescribing brand name drugs. It started with PM Modi in a speech announcing that the government will bring a legal framework to get doctors to prescribe generic names. This was followed by Medical Council of India (MCI) directing doctors to write generic names in prescriptions. MCI had in 2016 itself, amended the Medical Council Regulations (MCR), to require doctors to prescribe by “generic names in legible writing and preferably in capital letters”. This amendment though was not widely followed. Following the announcement by PM, on Friday the Medical Council of India, put out a directive asking doctors to follow the guidelines prescribed in MCR or face disciplinary action.

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The push to get doctors to prescribe generic names, is one of the many steps the government has been taking to reduce medical costs in India. The key ones has been expansion of National list of Essential Medicines (NLEM) bringing them under price cap, push by the government to increase awareness of generic drug prices and increase access through Jan Aushadhi programme.

A shift to a generic-generic model from the branded generic model currently in India, requires confidence among doctors, pharmacists and patients on the quality of drugs available in market. This assurance though is significantly lacking in India. There have been repeated cases of drugs failing quality tests or patients not responding to treatment due to quality of drugs. The key focus of the government then needs to be towards strengthening and empowering the regulator. It also needs to standardise the drug approval process.

While the push to generic prescription is a positive step for the consumer, without quality assurance and awareness, we believe branded generics will still retain majority share. Prescriptions by generic names will just shift the brand selection power to pharmacist, a negative. The focus of companies, in the current environment, will then shift to pharmacists for marketing their drugs. At the pharmacy level, generic-generic drugs have much higher margins than branded drugs but the lower retail price and lack of quality assurance will keep branded drugs the preferred pick for pharmacists to dispense.

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