1. Why generics may not really be the cure in India

Why generics may not really be the cure in India

The prime minister’s solution may actually end up being worse than the problem he is trying to treat

By: | Updated: April 20, 2017 10:31 AM

The prime minister’s push to make it compulsory for doctors to prescribe generics instead of specific brands—paracetamol versus Crocin—is not surprising given the stories of how pharma majors ply doctors with all manner of gifts and considerations in order to get them to prescribe certain brands of medicines. India may have among the lowest prices of medicines in the world, but it can’t hurt to get them even cheaper. Like all those who have made a similar prescription before him, though, the prime minister is missing some key elements.
For one, when the quality of drugs is as poor as it is in India, and the regulatory system’s ability to check this even worse, prescribing well-known brands does offer some assurance of quality, particularly if the company is also exporting medicines and is regulated by global regulators such as the US FDA even though the plants used for export plants are different from the ones for local supply—Ranbaxy whistleblower and drugs activist Dinesh Thakur points to CAG reports on how poor the quality of medicines is; at the Armed Forces Medical Stores Depot, 15-31% of locally procured medicines failed quality checks. Also, when a generic like ranitidine is prescribed instead of a brand like Zinetac, the power to decide which drug of several ranitidine suppliers is to be sold shifts to the chemist who, in all likelihood, is even more amenable to the charms of pharma firms. In any case, even today, patients ask chemists for cheaper alternatives when the prescribed drug is expensive.
While prescribing generics like paracetamol in place of Crocin is relatively easy, the problem gets compounded when, while many brands have the same essential salt, they have other compounds that the doctor feels are more useful; also, while many antibiotics can be used to treat the same infection, some show better efficacy. If what is to be the doctor’s call is to be substituted by an army of inspectors with some knowledge of pharmacopoeia, it is easy to see the chaos this will result in. Apart from the fact that medicines are probably the smallest share of what most treatments cost when tests/hospitalisation are required, it is not clear why, if competition is considered good enough to keep a check on prices in other markets, the same is not applied to medicines where the competition is large and the costs of innovation large. If the government is going to work on a bill-of-goods-plus-margin approach to medicine, it is worrying to think this can be extended to other industries. If the government still feels medicine costs are too high, the best solution is to have enough clinics/hospitals of its own which either buy medicines in bulk and avail of
40-50% discounts or stock only generics. This will only work if the government is able to ensure medicines stocked are of top quality and is able to find ways to ensure that India’s drug regulatory system starts working. With 36 different state-level licensing authorities that police drug manufacturing and have very different rules—Himachal suspends licences for 15-90 days, Gujarat does it for a day—and an acute shortage of inspectors, inspecting over 8.5 lakh drug retail stores just in the private sector for spurious drugs is a very tough job.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Go to Top