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December 02, 2017

Cheaper generics are one of the important factors for reducing healthcare cost in India. In this context, discuss the challenges faced by generic medicines in competing with branded drugs.                  (200 words)

Refer – Live mint

Enrich the answer from other sources, if the question demands.

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IAS Parliament 6 years

KEY POINTS

·         In India, most of the patients spend their medical expenses out from their pockets.

·         These healthcare costs pushed 60 million Indians below the poverty line in 2011 census.

·         Therefore, even a modest drop in drug prices will free hundreds of households from the widespread phenomenon of a medical poverty trap.

Generic drugs

·         Generic drugs are copies of brand-name drugs that have exactly the same dosage, intended use, effects, route of administration and safety as the original drug.

·         In other words, their pharmacological effects are exactly the same as those of their brand-name counterparts.

·         Generic medicines are affordable versions of the drug, introduced after a company loses patent over a medicine.

·         Generic drugs are cheaper because, the manufacturers have not had the expenses of developing and marketing a new drug.

Challenges before Generic medicines

  • Bio-Equivalence Test are studies conducted to establish that the original patented drug and a generic version work the same way, to the same extent and for the same purpose. 
  • In India, the coverage of bio-equivalence test is not universal, it is required only for some classes of generic medicines and enforcement is yet to be evaluated.
  • This creates an opportunity for malpractices to secure marketing authorizations, approving drugs without conducting clinical trials, and accepting bribes from companies for fast approval of products.
  • Poor regulatory regime makes it hard to recover generics from the dented perceptions about its quality.
  • Usually, generic products don’t advertise and save costs that way.
  • But, the good-quality manufacturers are not able to compete with shoddy manufacturers on cost, thereby driving the good-quality generic manufacturers to advertise and become branded generics, or exit the market.
  • Certification practices by the government can mitigate that problem and allow good-quality generic medicine manufacturers to differentiate themselves on a variable other than price.
  • The incentive to cut costs increases as massive government contracts are allocated to the lowest bidder.
  • This probably explains why over 10% of the medicines in the government supply chain were found to be not of standard quality (NSQ)

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