In generics we trust

The government will soon come out with rules, Prime Minister Narendra Modi said at Surat earlier this week, so that doctors can prescribe only generic medicines. At the moment, they write the brand of the medicine on the prescription sheet; in the future, they will just write the salt. The patient can go to the pharmacist and pick up the brand of his choice. The idea is to make drugs cheaper for the common man and end the nexus that exists between pharmaceutical companies and doctors. 

For an outsider, this would suggest that the Indian market is dominated by high-cost patented medicines. The fact is that such medicines accounts for just about 5 per cent of the Indian market — the rest is generics. However, India is one of those rare markets that are dominated by a category called branded generics: Off-patent medicine sold under a brand. Of every Rs 100 worth of generic medicines sold in the country, almost Rs 95 is branded, and the rest is generic generics (generic medicine without a brand). And there is wide variance in the brands of the same salt.

The open secret is that pharmaceutical companies throw all manners of inducements on doctors to prescribe their medicines. The victim of their misdemeanours is the unsuspecting patient. Mr Modi clearly wants to break this self-serving chain.

Doctors say that when they prescribe medicines, they keep the paying ability of the patient in the mind. After he has seen a poor patient, a doctor is likely to prescribe a cheaper brand of the required salt. But this assumes that the doctor has the ability to assess the income of the patient in a short span of time. The argument also implies that those who the doctor feels can afford expensive medicines, which may be an erroneous judgement, are denied a cheaper option. If the doctor were to just write the salt, all patients can possibly buy the cheapest alternative. 

But there are two shortcomings in Mr Modi’s game plan. One, it transfers the power to select a brand from the doctor to the pharmacist, not necessarily to the patient. Consider a scenario where the patient comes with a prescription: What stops the pharmacists from stocking only those brands that give him the best inducements? In the new regime, it will take little time for the company-pharmacist nexus to replace the company-doctor one. It is also possible that the pharmacist may push the medicine made by some unscrupulous manufacturer, than a respected one, only because it has offered him higher incentives. This exposes the patient to medical risk.

The second shortcoming is technical. Under the current rules, for the first four years after a drug goes off patent, the authorisation to launch generic variants is given by the Centre and companies are required to conduct bio-equivalence studies and submit stability data. After four years, the onus passes to the states and companies need not establish bio-equivalence and stability. Industry has for long insisted that the two categories must be treated differently: While the first can justifiably be called generics, the other is really “similars”. If there are 100 brands of a salt in the market, it is likely that only 15 are generic variants — the rest could be similars. The suggestion to make doctors prescribe just the salt, and not the brand, makes no distinction between the two, which is unfair. While the patient assumes he has got a generic, what he might have got is a similar, a potentially lesser medicine. There is a demand that it be made mandatory for all generics to conduct bio-equivalence studies but the proposal has been stonewalled by the states, which insist they don’t have the wherewithal to process all the information. 

India has stringent price control. Companies spend a lot of time and money to escape it. If a popular salt is brought under control, they will try to tweak it in some way so that they can retain pricing freedom. Many companies, Indian as well as multinational, openly say that this has made India the toughest place to do business in the whole world. The new rule will dampen the spirits further. It can also be seen as admission that price control has failed to live up to the objective of making inexpensive medicines available to the common man.

It is worth noting that the Medical Council of India had in October last year made it mandatory for doctors to prescribe generic medicines, but the decision has not been implemented. The government has the Uniform Code of Pharmaceutical Marketing Practices, which was supposed to control the company-doctor nexus, but it has been hanging fire for two years. If these were properly enforced, maybe the flawed push for generics would not be required.