What ails the Centre’s generics Rx initiative?

More than three months after Prime Minister Narendra Modi fired the salvo on getting doctors to prescribe medicines using their generic names, the discussion seems to be on a slow burner.

From the strident position that all doctors will have to prescribe medicines using their generic or chemical names, there appears to be a more reconciled acceptance from policy makers that doctors cannot be banned from prescribing brand names.

The stumbling blocks in implementing the move, as gleaned from discussions with doctors, patients and pharma industry experts, seem to be an absence of confidence or trust in the quality of medicines being dispensed. Besides, the initiative seems to be “inherently flawed” as the very structure of the domestic pharmaceutical industry is anchored in “branded generics”.

Generics are defined globally as off-patent, less-expensive drugs that are chemically similar to an innovative drug. But the Indian market is dominated by “branded” generic drugs, where many such chemically similar versions of an original drug are sold under different brand names, by different companies, at different prices.

The principle of prescribing generic medicines is fine, but the practical differentiation becomes difficult as all generic drugs may not be “standardised”, says PM Bhujang, President, Association of Hospitals. Quality concerns do not mean that all big companies have the best quality of drugs or smaller ones don’t, he clarifies. But regulatory checks across the country should ensure that only good quality drugs are in the market. Often, doctors and patients trust or have confidence in a branded drug because it has proved safe and efficacious over time, he points out.

Besides, writing out all the key ingredients while prescribing even a simple medicine can be difficult, and if the chemist does not understand the prescription, it creates more problems, he adds.

A key red flag on prescribing generics is that it shifts decision-making on which generic drug should be prescribed, from the doctor to the chemist. So the initiative that seeks to break the doctor-drug-company nexus could falter at the chemist, given the varying trade margins that companies would give.

Outlining the industry impact, a recent ICRA report says that compulsory prescribing of generic drugs could have long-term negative implications. “In ICRA’s view, considering the prices of unbranded generic drugs are approximately 30-50 per cent cheaper than branded generics, replacing 20 per cent of the ₹1.15 trillion IPM (Indian Pharmaceutical Market, MAT Apr-17) with such drugs over the medium to long term could lead to potential 5-10 per cent decline in IPM as well as dent the profitability of Indian pharma companies.” Gaurav Jain, ICRA Vice President, observes that the Government does not have the infrastructure to implement this move at present. But if the initiative is pushed with doctors, over three to five years, the domestic market could face the above-mentioned impact.

Amit Sengupta of Jan Swasthya Abhiyan, though, feels that the generics initiative “is not going anywhere”. The structure of the domestic pharmaceutical industry is based on branded generics. “There is a contradiction in asking doctors to prescribe generics when the market is full of branded generics,” he says.

No groundwork has been done to implement the initiative, he says, pointing to pharmacists who are not legally allowed to change or substitute medicines. And yet, pharmacists in chemist shops will now have to decide on the generic drug to be given to a patient. That is, if all chemist shops do indeed have pharmacists.

Sengupta calls for investment in the drug regulatory and testing infrastructure to ensure that quality drugs are made across the country, even as companies are supported to meet GMP (Good Manufacturing Practices) norms. Only then will consumers and doctors have confidence that a medicine picked up anywhere in the country is of a good quality.

Patients in developed countries get their medicines from a well-developed healthcare system and not the retail market. “India has a well-developed pharma industry and an underdeveloped health system,” he says. No effort to fix the retail market can work, as someone will emerge and rig the system, cautions Sengupta, making a strong case to strengthen the public health system.

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