1. Generics: Two-thirds of OECD countries encourage generics

Generics: Two-thirds of OECD countries encourage generics

Eyebrows were raised when on April 17, 2017, PM Narendra Modi hinted at his government bringing a legal framework for prescribing generics, to make drugs less expensive for patients.

Updated: May 9, 2017 7:24 AM
Unbranded generic drugs cost less, as their manufacturers don’t need to incur huge marketing and sales promotion expenditure. (Reuters)

Eyebrows were raised when on April 17, 2017, PM Narendra Modi hinted at his government bringing a legal framework for prescribing generics, to make drugs less expensive for patients. Immediately reacting to it, some expressed serious quality concern on unbranded cheaper generic drugs, despite lack of sufficient credible data to claim so, while several studies in the Indian context concluded that unbranded generic drugs are generally as good as their branded equivalents. Interestingly, drug regulators approve both these categories of generic drugs on the same regulatory yardstick. Marketing permissions are also granted only in generic names.

Unbranded generic drugs cost less, as their manufacturers don’t need to incur huge marketing and sales promotion expenditure.

Although, Ceiling Prices of essential drugs are the same, these contribute just around 20% of the Indian pharma market. The remaining drugs fall outside price control, where the alleged doctor-company financial nexus, compels patients to buy high-priced branded generics, whenever prescribed.

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This situation necessitates a robust legal framework to help patients contain avoidable high out of pocket expenditures (OOPE) on prescribed medicines, which constitute around 60% of the total treatment cost, and are one of the highest in the world. A May 2001 study of the World Bank found that such high OOPE alone may push 2.2% of Indian population below the poverty line in one year.

The October 2016 circular of the Medical Council of India (MCI), clearly directs the doctors that: “Every physician should prescribe drugs with generic names legibly and preferably in capital letters and he/she shall ensure that there is a rational prescription and use of drugs”. It doesn’t indicate any ban on writing the preferred brand names alongside. However, regardless of the inefficiency of MCI to implement this directive, there is a key legal hurdle too.

Currently, branded generic prescriptions constitute over 90% of total generic drugs. However, Jan-Aushadhi store (JAS) pharmacists cannot substitute high-priced branded generics with their low-priced generic equivalents, as section 65(11)(c) in the Drugs and Cosmetics Rules, 1945 makes such substitution grossly illegal in India. PM’s assertion to bring a legal framework to prescribe medicines in generics, is expected to empower all retailers for similar substitution.

As the MCI circular doesn’t prohibit doctors from mentioning respective trade names after writing the generic names, brand names for generic drugs may continue to exist, but with a lesser relevance. A mandatory requirement in Drugs & Cosmetic Rules for printing generic-names on all packing labels in a more conspicuous manner than the brand-names will also facilitate the retailers dispensing and the patients choosing from cheaper equivalents, once this legal framework is enacted.

Two-thirds of OECD countries encourage generic prescriptions. In many of these, prescription in generic names is mandatory, so are generic substitutions for pharmacists. Whereas in India some have raised concerns on shifting the decision of choosing a specific generic formulation of the same molecule from doctors to chemists, but why? In the new paradigm, pharma companies can also share the responsibility of keeping retailers up-to-date in this area with continuous pharmacy education, just as what they are doing with continuing medical education for doctors.

Moreover, without access to scientific data, how can a doctor possibly vouch for high quality of one branded-generic that she prescribes over other equivalents, including unbranded-generics? Much reported incidences of USFDA import bans on drug quality parameters, data integrity and a recent comment by the agency’s India head on overall domestic drug quality, include many large Indian branded-generic manufacturers, too. Thus, the quality issue remains the same both for unbranded-generics and the branded-generics. Let the drug regulators sort it out.

Expensive branding exercise for generic just for commercial gain, and adversely impacting patients’ access has now been questioned by none other than the PM. His clear signal on making prescriptions in generic names mandatory under a legal framework may not be a panacea. Nonetheless, it’s a good beginning while paving the way for a new era of Universal Health Care, as captured in the National Health Policy 2017.

Tapan J Ray

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