Cheap generic vs costly branded: Issues in picking right drug in India

Prime Minister Narendra Modi wants doctors to prescribe generic medicines over branded ones. KAUNAIN SHERIFF M answers key questions on the pricing of drugs and beyond.

Written by Kaunain Sheriff M | New Delhi | Updated: April 20, 2017 8:45:59 am
generic medicines, modi generic medicines, pm modi medicines, what are generic medicines, generic medicine prices, narendra modi, modi generic medicine law, generic medicine india, india news, latest news, indian express news In the United States, the Food and Drug Administration notes that the cost of a generic drug is 80% to 85% lower than the brand-name product on average.

What exactly has Prime Minister Narendra Modi said on generic drugs?

Speaking in Surat on April 17, the Prime Minister referred to the Pradhan Mantri Bharatiya Janaushadhi Pariyojana (PMBJP), which aims to provide cheaper medical drugs to the people. “In the coming days, the government will bring a legal framework under which doctors will have to prescribe generic medicines which are cheaper than equivalent branded drugs, to patients,” the Prime Minister said. “…If a doctor writes a prescription, he has to write in it that it will be enough for patients to buy a generic medicine, and he need not buy any other medicine,” he added.

Is this a completely new intervention?

Not exactly. After seeking approval from the central government, the Medical Council of India — which registers doctors to ensure proper standards of medical practice in the country — had on September 21 last year, notified an amendment in Clause 1.5 of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002. This clause now reads: “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”. The words “legibly and preferably in capital letters” were not there originally.

Also, the UPA government had from time to time, issued circulars and instructions to government hospitals and Central Government Health Scheme (CGHS) dispensaries to “prescribe generic medicines” to the “maximum extent possible”. In December 2012, the UPA government had issued a “statutory direction” to state governments under sections of the Drugs and Cosmetics Act, 1940 to “grant/renew” licences to manufacture for “sale or for distribution of drugs in proper/generic names only”. This was intended to build a mechanism for wider use of generic drugs.

Most recently, a countrywide campaign has been under way to ensure availability of generic medicines under the Pradhan Mantri Bharatiya Janaushadhi Pariyojana. A total 861 PMBJ Kendras are functional in 28 states — at which 99 private manufacturing companies, certified by the World Health Organisation, have been empanelled to supply generic drugs, specially manufactured and packed for the PMBJP.

Okay, but what exactly is the difference between a generic drug and brand- name drug?

When a company develops a new drug — often after years of research — it applies for a patent, which prohibits anyone else from making the drug for a fixed period. To recover the cost of research and development, companies usually price their brand- name drugs on the higher side. Once the patent expires, other manufacturers duplicate and market their own versions of the drug. Since the manufacture of these generic drugs do not involve a repeat of the extensive clinical trials to prove their safety and efficacy, it costs less to develop them. Generic drugs are, therefore, cheaper.

However, because the compounds in the generic versions have the same molecular structure as the brand-name version, their quality is essentially the same. The generic drug has the same “active ingredient” as the brand-name drug. This ingredient is the one that cures the patient; and other, “inert ingredients”, which give the drug its colour, shape or taste, vary from the brand-name drug to the generics.

And exactly how much cheaper is a generic than a brand-name drug?

In the United States, the Food and Drug Administration notes that the cost of a generic drug is 80% to 85% lower than the brand-name product on average. In India, prices of drugs in the National List of Essential Medicines (NLEM) included in the First Schedule of the Drugs (Prices Control) Order, 2013, are fixed as per the provisions of the Order. These prices are uniformly applicable to all branded and generic medicines containing the “same molecule/Active Pharmaceutical Ingredient”. All manufacturers of scheduled drugs/formulations have to comply with the price fixed by the National Pharmaceutical Pricing Authority, from the date of its notification.

In the case of non-scheduled medicines, i.e., medicines not included in the First Schedule of the DPCO, 2013, manufacturers are free to fix the launch prices. However, they cannot increase the Maximum Retail Price(MRP) by more than 10% of the MRP of the preceding 12 months. Currently, in the case of Cetirizine, one of the most common anti-allergy drugs, the branded drug costs about Rs 35 for a strip of 10 tablets, whereas the generic drug costs approximately Rs 25.

How can the government ensure that generics, apart from being cheap, are also safe for the patient?

Experts say the priority of the government should be to bring a legal framework to ensure “quality” in generic drug testing. No more than 1% of generic drugs sold in India undergo quality tests. Generic drugs should work “therapeutically” and the government should ensure “uniform quality”, experts say — only then can doctors prescribe them with confidence. The number of drug inspectors — approximately 1,500 now — must be increased, they say.

Also, the government has to clarify how it will ensure that once a doctor prescribes the generic drug, detailing its medical composition, the pharmacist or chemist will give the most appropriate drug to the patient. Even on the question of price, studies have shown that it is the retailer’s margin that often plays the key role in deciding how much the patient pays for a drug. To take the example of Cetirizine again, while the difference between the brand-name drug and the generic could be Rs 10 (Rs 35 and Rs 25 respectively), depending on what the retailer keeps in each case, the actual difference in the price paid by a customer of a brand-name drug and that of a generic could be, perhaps, only Rs 4 (Rs 27 and Rs 23).

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