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Modi govt plan on generic drugs makes pharma companies, doctors jittery

The Narendra Modi govt is planning to bring law to make doctors compulsorily prescribe generic drugs

Veena Mani  |  New Delhi 

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To make health care affordable in the country, the Narendra Modi-led central government is looking to make it mandatory for doctors to prescribe As reported earlier, the health ministry, in line with Finance Minister Arun Jaitley’s announcement, has started work on amending the Drugs and Cosmetics Act.

After the Act has been amended, doctors will not be allowed to mention brand names in their prescriptions. Instead, they will have to mention the generic name of a drug. The prime minister’s Monday announcement on this has made the pharmaceutical industry jittery. Generic drugs' share of the market, 80 per cent at present (20 per cent is accounted for by branded and patented drugs), is expected to go up to 90 per cent in the next three years.

The managing director of a domestic pharmaceutical company who does not wish to be named says the move is a serious one and will shift the thrust from quality to price. 

Some industry veterans view this from the angle of marketing ethics. Veeramani, formerly the president of the Indian Drug Manufacturers' Association (IDMA), says the move will keep a check on doctors and ensure the medical fraternity doesn’t favour any company. However, he fears the problem will now shift from the doctor’s desk to the chemist’s. “Now, (since the doctor will mention only the generic name of a drug on the prescription), the chemist might sell medicines that suit him the best. He might push those that yield him better profits.” There are over 800,000 in India.

The pharma industry, meanwhile, does not seem enthused. Industry players believe the idea will complicate things for doctors and be very difficult to implement. Doctors may face difficulty in prescribing combination drugs or medicines with multiple ingredients, analysts say.

“We do not think making generic prescriptions mandatory will make drugs cheaper. A drug manufactured by a top company will still carry a premium to one that is produced by a less-known company. While the budget does not make it very clear, we believe the amendment might be meant to make generic prescriptions mandatory. Prima facie, it is a negative step. I think the government might be able to introduce it in its own hospitals, but how will it be implemented at a country-wide level is difficult to understand,” D G Shah, secretary-general, Indian Pharmaceutical Alliance, had said after the budget announcement.

Dr S S Agarwal, former president, Indian Medical Association, says: “While the idea of only prescribing generics is good, it is not practical in India. The doctor’s job will now be only to diagnose the ailment. Using standard procedures of treatment for an ailment, the chemist will start selling drugs.” Agarwal also highlights that procuring generics is a problem in India, as domestic manufacturing is not robust. He cites the example Jan Aushadhi Stores where generics are sold at lower prices. “At any time, only 200 of the 600 drugs that the government planned to sell at the Pradhan Mantri Jan Aushadhi Store are available. There has never been a day when all 600 drugs are there.” The Bureau of Pharma PSUs of India (BPPI) is the nodal implementation agency for this programme.
This is not the first time the government has planned such a policy. In 1978, there was a similar attempt which the pharmaceutical industry had challenged in court.