Generic Drugs & Its Future In India

In the recent past, a lot of buzz is around generic drugs in India. The general discussion is about the reduction in the medicine cost. Most articles on this subject deal with two aspects. One is, the cost of nongeneric or branded medicine is much higher than the generic ones. Price of generic drugs is compared with ethically promoted and prescribed branded products. Comparison is placed to prove the point. Sales of the later products are indicated to be not so ethical by multiple logics. Drug price as the only significant differentiator is argued for reducing health care costs.   The second point is about making medical treatment available to a larger section of society. People below the poverty line struggle to take medical help. Government hospitals & PHCs treat patients free of cost. However, most often patients are asked to purchase drugs from the retail pharmacy. This becomes prohibitive for the economically challenged section of society. Generic drugs are likely to reduce this burden and more people can afford to take the benefit of health care by opting for generic drugs. This is the argument most commentators make in the recent debates.In a popular TV show a couple of years back, a Bollywood celebrity discussed generic drugs and their prices with a bureaucrat. The bureaucrat happened to be a trained doctor and had a plan to make generic drugs available to patients in Rajasthan. Being an administrator, he had in fact implemented the usage of generic medicines in the state. It drew the attention of people to the fact that there is a strong possibility of reducing medicine cost by opting for generic drugs. There is still a general belief that this is a model which will help reduce health care cost. Many state governments have tried implementing the Rajasthan model. So far there is no conviction in the model since it does not reflect the significant benefit to the intended group. There are reasons to believe that this model under current circumstances is least likely to lead to any significant benefit.Incidentally, the meaning of generic medicine in India and elsewhere are quite different. Worldwide generic medicines are the ones that no more have patent protection.   A formulation becomes generic once its patent expires. That is how the world of generic works.  In India most of the drugs we use are generic. The general perception here is generic medicines are the ones that are sold without any brand name and only the molecule names are mentioned on the packs. So we have created two classes under generic. One is ‘Branded Generic’ and the other one is ‘Generic Generic’. The first segment is also called ethical market. It means these drugs are sold because it’s promoted to the doctors and are prescribed. In the later segment there is another category which is actual ‘Generic Generic’ but has a brand name as well. This category is never promoted by the field force to the health care practitioners. It’s sold only by the distributors, retail pharmacies and consuming doctors. The whole discussion is around this Generic Generic market and its potential to reduce the health care cost. Asian markets do mimic US and west European markets to some extent with a lag of a decade or so depending on the industry segment. In the both these markets generic drugs have a sizable presence and the market is growing. This gives a sense that similar trend may happen in India as well. The debate is not if that is going to happen, but around when and how fast.Indian Domestic Formulation Market (IDFM) is around $18.5bn or Rs1,30,000Cr. Many tend to say that, this is Indian Pharmaceutical Market (IPM) size. IPM will include formulation, API, intermediates, OTC, institution sales and generic sales. The above figure captures sales of only the finished dosage form or formulation sales in the regular trade channel in the domestic market. One study in 2017 estimated that branded generic market is more than 90% of the domestic formulation market. With that logic ‘Generic Generic’ market in 2018 – 19 would be around $1.8bn or Rs12,000Cr . It’s not that people still do not know the cost benefit of Generics. It’s also not that retail pharmacies are not aware of the substantially high margin of these products. There is much more to it than it meets the eye.Cost is definitely not the only differentiating factor while choosing a medicine. Quality is the real differentiator. For example one would tend to use a product of a manufacturer which has stood the test of time and has earned the trust of the healthcare professionals. Two medicines having the same molecule can be vastly different in its effectiveness, stability and also adverse effect on the body. Bioavailability and bioequivalence of the same formulation from two different manufacturers can be quite different. Incidentally in case of drugs the user is not the decision maker. It’s the doctor who chooses. She needs to trust the manufacturer or the marketing company. In most cases today the marketing company does not manufacture. The healthcare practitioner believes that the marketing company or the brand owner takes adequate care to ensure its own quality standards. Which is true to a large extent. Hence a contract manufacturer making for GSK, Pfizer or Sun Phama may not have the same level of trust that the brand owners enjoy. Our law enforcement, compliance, implementation of regulatory guide lines are less than satisfactory. One can not be sure that products being churned out of all the pharmaceutical manufacturing units have the same quality compliance standards.  Being in the pharmaceutical industry for over three decades I know it for sure. I had the opportunity to spend days in more than three dozen manufacturing units in India, Pakistan, China, Indonesia and Europe. The quality discrepancies, manufacturing practices, documentation, error identification and corrections could be vastly different. The cost of generics in the US is much more expensive than the branded generics in India on absolute and relative terms. Quality generics may not be too economical compared to the branded ones after all.Dispensing of medicines at our pharmacies is an issue. Most of our pharmacies are not manned by pharmacists. Most often one finds a semi-literate person handling drugs. He can read the prescription and find out the drug from his cabinet. That is the biggest skill he normally has. These people purchase and dispense generic drugs solely on the basis of margin they get. They neither have the capability to figure out quality, compare companies nor do they have the intention. Empowering such pharmacies to dispense generic drugs can be dangerous.For generic drugs to make a mark one needs a robust ecosystem of manufacturing regulatory control and pharmacy manned by qualified pharmacists. This can happen in coming decades once the regulatory authorities decide to do it.

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