Generic names: common cause, different solutions

It’s not often that medical representatives and health workers are on the same side as the pharmaceutical industry in a healthcare debate.

But that seems to be the case in the “generic prescriptions” discussion triggered by Prime Minister Narendra Modi, following his recent speech. The Prime Minister had said that a framework would be brought in for doctors to prescribe medicines using their generic (chemical) names, a move ostensibly to help bring down medicine prices.

Medical representatives (MR) and healthcare workers, though, are not convinced that generic prescriptions will help the government achieve its objective of making medicines affordable. And here they share common ground with the pharma industry.

But that’s where the similarities end with the industry. In separate suggestions made by the MRs and health workers, the “cost of production” factor has been put back into the discussion on making medicines affordable. And in doing so, they have reinforced an existing difference of opinion with the pharma industry. In fact, a cost-of-production based price-cap on medicines is already part of a case being fought in the Supreme Court.

In its statement, the Federation of Medical and Sales Representatives Associations of India (FMRAI) says that the government has “dismantled” the price control system that was based on the manufacturing cost or ex-factory cost. It has instead initiated a market-based system of control.

Price-caps on all medicines should be calculated on the basis of the manufacturing cost and medicines should be made affordable by revitalising public sector units etc, rather than enforcing generic names by the doctors, the FMRAI suggests. Pointing to the peculiarity in the Indian market, FMRAI’s Alok Ganguli says that the Indian market is largely made of generic medicines (that are chemically similar to the original innovator drug). So, while the government is justified in cracking down on the prices of similar generic drugs with different prices, it was not justified in preventing them from sporting brandnames, as they effectively compete with the innovator’s medicine and price, he explains.

In developed markets like the US, generics are defined as medicines identical or bio-equivalent to a brand name drug in dosage form, safety, etc. They are much less expensive than the original branded medicine, as they do not involve the original research cost. And usually, they come into the market only after the original drug has lived out its exclusivity or patented period.

Explaining why the Prime Minister’s proposal would be “counter-productive” as a standalone measure, the All India Drug Action Network (AIDAN) says that in India no manufacturer markets medicines under generic names. And hence medicines are not available under generic names in the Indian retail pharmacy shops. Unless manufacturers (except those marketing medicines still under patent protection) are made to market medicines under generic names, consumers will not get the benefit of generic medicines, AIDAN says.

Besides, in the absence of good quality generic name medicines in retail pharmacy shops, merely getting doctors to prescribe medicines by their generic names will end up shifting the discretion to pharmacists who are likely to dispense brands that give them more commission, they caution.

Asking the government to ensure quality by implementing Mashelkar’s recommendations of 2003 in terms of increasing drug inspectors and strengthening the quality control infrastructure, AIDAN also raises the “cost of production” issue.

Prices of medicines should be fixed by restoring the cost-based formula which was employed since 1979, they say. “From 2013, the price-control is based on ‘market-based’ formula. This led to reduction of prices only by 10-20 per cent on an average. Instead there is need to restore ‘cost-based’ formula, with a margin of say 100 per cent on the standard cost of production. This would lead to slashing of drug prices to one-third or one-fourth of current levels, without jeopardising legitimate profits,” AIDAN suggests.

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