Making Generic Drugs Compulsory – Part II

Click here for Making Generic Drugs Compulsory Part I

Why in news?

PM had recently said that the government is contemplating a law that will make it binding for doctors to prescribe generic medicines.

What is the difference between generic and brand-name drug?

• When a company develops a new drug it applies for a patent.
• The patent prohibits anyone else from making the drug for a fixed period.
• To recover the cost of research and development, companies usually price their brand-name drugs on the higher side.
• Once the patent expires, other manufacturers duplicate and market their own versions of the drug called generic drugs.
• Since the manufacture of generic drugs do not involve a repeat of the extensive clinical trials, they are cheaper.
• The active ingredient of a drug is the one that cures the patient.
• The generic drug has the same “active ingredient” as the brand-name drug.
• The other “inert ingredients”, which give the drug its colour, shape or taste, vary from the brand-name drug to the generics.
• The compounds in the generic versions have the same molecular structure as the brand-name version and so their quality is essentially the same.
• U.S FDA notes that the cost of a generic drug is 80% to 85% lower than the brand-name product.

What is the drug pricing mechanism in India?

• In India, prices of drugs in the National List of Essential Medicines (NLEM) included in the First Schedule of the Drugs (Prices Control) Order, 2013, are fixed as per the provisions of the Order.
• These prices are uniformly applicable to all branded and generic medicines.
• All manufacturers of scheduled drugs/formulations have to comply with the price fixed by the National Pharmaceutical Pricing Authority.
• In the case of non-scheduled medicines, i.e., medicines not included in the First Schedule of the DPCO, manufacturers are free to fix the launch prices.
• However, they cannot increase the Maximum Retail Price (MRP) by more than 10% of the MRP of the preceding 12 months.

What were the previous interventions?

• MCI - In September 2016, Medical Council of India had notified an amendment in Clause 1.5 of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002.
• This now mandates that every physician should prescribe drugs with generic names legibly and preferably in capital letters and he should ensure that there is a rational prescription and use of drugs.
• The words “legibly and preferably in capital letters” were not there originally.
• Previous government - It had also issued circulars regularly to government hospitals and Central Government Health Scheme (CGHS) dispensaries to “prescribe generic medicines” to the “maximum extent possible”.
• In December 2012, the then government had issued a “statutory direction” to state governments under sections of the Drugs and Cosmetics Act, 1940 to “grant/renew” licences to manufacture for “sale or for distribution of drugs in proper/generic names only”.
• Pradhan Mantri Bharatiya Janaushadhi Pariyojana – It is a countrywide campaign to ensure availability of generic medicines.
• A total 861 PMBJ Kendras are functional in 28 states — at which 99 private manufacturing companies have been empanelled to supply generic drugs.

Source: The Indian Express