An analysis of generic medicines in India

An analysis of generic medicines in India

Generic medicines in India have received a new impetus with Prime Minister Modi himself advocating the usage of these medicines. Doctors will now be required to prescribe generic formulations of medicines, as opposed to specific brands. The Prime Minister has announced that prescription of medicines by their generic names will be mandatory.

Generic medicines in India have received a new impetus with Prime Minister Modi himself advocating the usage of these medicines. Doctors will now be required to prescribe generic formulations of medicines, as opposed to specific brands. The Prime Minister has announced that prescription of medicines by their generic names will be mandatory.

What’s good about this move?This is expected to bring down drug prices and expand access to affordable health solutions. As per the latest National Sample Survey Office survey on healthcare, in 2014, medicines emerged as a principal component of total health expenses—72% in rural areas and 68% in urban areas. For a country with one of the highest per capita out-of-pocket expenditures on health, even a modest drop in drug prices will free hundreds of households from the widespread phenomenon of a medical poverty trap.

In addition to the social benefits, the generics-only policy also makes economic sense. By promoting generic drug consumption, the government safeguards the health of its generic drug manufacturing industry—one of the largest suppliers of low-cost medicines in the world.

With increasing pressure from the “Big Pharma” companies in developed countries, Indian generic manufacturers must now operate under a markedly restrictive intellectual property rights (IPR) regime. The new policy can ensure that—at least in the Indian market—generic manufacturers retain an advantage. Big Pharma’s access to Indian consumers will have to be routed through generic companies using channels such as voluntary licensing.

Low-cost medicines, apart from their attribute as a commercial commodity, have far-reaching implications on public health and international human rights. India has unambiguously subscribed to the pro-public health argument, and has articulated its position several times at home and in international forums.

Expected Questions

  • What is the future of generic medicines in India? Examine in the context of surging pharmaceutical sector in India and large populace with limited affordability for branded medicines?
  • How do you view the impact of Jan Aushadi scheme on the health outcomes of India given that India spends little on health?
  • What are the ethical issues involved in the debate on branded and generic drugs?


  • General Studies Paper -II
  • What is a generic drug?
  • Ageneric drug is a pharmaceutical drug that is equivalent to a brand-name product in dosage, strength, route of administration, quality, performance, and intended use.
  • The term may also refer to any drug marketed under its chemical name without advertising, or to the chemical makeup of a drug rather than the brand name under which the drug is sold.
  • TheIndian government began encouraging more drug manufacturing by Indian companies in the early 1960s, and with the Patents Act in 1970.
  • The Patents Act removed composition patents for foods and drugs, and though it kept process patents, these were shortened to a period of five to seven years.
  • The resulting lack of patent protection created a niche in both the Indian and global markets that Indian companies filled by reverse- engineering new processes for manufacturing low-cost drugs.
  • The code of ethics issued by theMedical Council of India in 2002 calls for physicians to prescribe drugs by their generic names only.
  • Analysis
  • At least 90% of the Indian domestic pharmaceutical market, of `1,00,000 crore and more, comprises drugs sold under brand names. There simply are not enough generic name equivalents of branded medicines sold.
  • About half the market—`50,000 crore and more—is for fixed-dose combinations (FDCs) of drugs, a further half of them irrational.
  • Many FDC drugs contain even eight or nine medicines. To write, and remember, the constituents of FDC drugs in generic names is impractical, considering that there would be thousands of FDC brands.
  • A combination drug is a fixed-dose combination (FDC) that includes two or more active pharmaceutical ingredients (APIs) combined in a single dosage form, which is manufactured and distributed in fixed doses.
  • Even if the doctor manages to write a prescription in generic names for single-ingredient drugs, pharmacists will sell the brand that maximises their commission and will in all likelihood not stock the less costlier but equivalent brand or generic medicine that is as good. This defeats the basic intention of making medicines affordable for consumers.
  • Prescription by generic names merely shifts the focus of the pharmaceutical industry’s unethical drug promotion to the pharmacist; away from the prescriber, and resulting in business as usual.
  • Medicines will continue to account for anything from 50% to 80% of treatment costs.
  • Steps taken in this regard
  • The Government of India has championed setting up Jan Aushadhis, which are pharmacies selling only generic name medicines to the extent possible, giving preference to pharmaceutical public sector undertakings (PSUs) too.
  • There are not enough Jan Aushadhis, possibly less than 3,000 against the more than eight lakh retail pharmacies in existence, with many rural areas still underserved.
  • To facilitate Jan Aushadhis, the Drugs Technical Advisory Board (DTAB) in May 2016 considered amending Rule 65 (11A) of the Drugs and Cosmetics Act, 1940 so that pharmacists can dispense generic name medicines and/or equivalent brands against prescriptions in brand names.
  • The DTAB rejected the idea citing that the bioavailability of a generic drug may not be as good as that of the prescribed brand.
  • Bioavailability is a measurement of the extent of a therapeutically active medicine that reaches the systemic circulation and is therefore available at the site of action; whereas bioequivalence is the comparison of the bioavailability of two medicines, say the generic drug and the branded drug.
  • This means that the government’s top decision-making body on medicine-related matters does not have confidence in the products manufactured by the government’s own PSUs.
  • The DTAB, however, could have recommended bio waivers on bioavailability/bioequivalence (BA/BE) for certain classes of drugs based on their permeability and solubility, a practice followed in countries where healthcare is well regulated.
  • BA/BE studies are essential for certain critical dose drugs and drugs of narrow therapeutic range, which are few in number.
  • By implication, the DTAB has doubts that generic name medicines in general can have acceptable BA/BE at all. Probably, the DTAB is not confident that India’s regulatory agencies can strictly enforce quality requirements.

Additional information

  • A Bureau of Pharma PSUs of India (BPPI) has been established on the 1st of December 2008 comprising all the Pharma CPSUs under the Department of Pharmaceuticals.
  • The Bureau will bring about effective collaboration and cooperation in furthering the working and resources of these organizations.

More specifically it would:

  1. Co-ordinate marketing of the generic drugs through the Jan Aushadhi stores.
  2. Co-ordinate supply of medicines in the State from their own plants, other Pharma PSUs of Central & State Governments and Private Sector.

Coordinate with Hospitals in preparation of formulary.

  1. Monitor proper running of Jan Aushadhi stores with the help of other CPSUs.
  2. Provide medicines as per rates decided in the joint Forum/Core Committee.
  3. Monitor activities of the Jan Aushadhi stores in the areas allocated to them.

Experiments in states

  • The Tamil Nadu and Rajasthan governments procure generic name medicines at extremely competitive prices year after year, and crores of drugs are in use in their public health systems, thanks to the quality assurance systems in place.
  • The success of the drug procurement system in these two states should counter the defeatist narrative that insists that generic medicines can never be good.
  • This is not to underestimate the challenges in ensuring quality generic medicines countrywide, but the critics from the medical profession are doing the poor patient enormous disservice by swallowing the disinformation from the pharmaceutical industry about the general lack of bioavailability of generics as compared to brands.

When a pharma company invest & develop any new drug & earn patent rights for it, then is called branded drug(BD). The duplicates of branded drugs are known as generic drugs. They have following differences:

Production: Only Company with patent rights are allowed to manufacture Branded Drug. Once patent lapses, other companies are allowed to produce generic drugs.

Cost: Unlike generic drugs, branded drugs incur high cost due to high investment research & development.

Ingredients: The active ingredient (the one which cure the disease) of both drugs are same but the differs in colour, shape or taste

Affordable, effective & easy drug access important for "universal healthcare”. So, India has decided to bring a law for doctors to prescribe generic medicines which have certain issues:

  1. Implementation: Lower awareness and corruption have given rise nexus between Doctors chemists & pharma sector. So, public awareness via digital media along surveillance mechanism to curb nexus
  2. International pressure: Big western pharmaceutical lobbies may back stringent IPR rigme & compulsory licensing. They may blame India to breach TRIPS agreement and drag into WTO. But recent UN report has given precedence to human rights over patent rights which support India's move for affordable generic price to improve health care
  3. Supply side challenge: India is import driven country for active pharmaceutical ingredient and already facing challenge of substandard quality of generic drugs. Along with this current move may reduce FDI inflow in pharm sector and slowdown research & development in domestic pharma companies. However, India has taken steps like ‘India Pharma & India Medical Device 2017’ and new IPR policy that offer incentive & ease of doing business in India. India should adopt stricter accreditation and inspection rules for generic drugs.

Branded vs Generic drugs – Alternate opinion

  • A generic drug is approved only after it has met rigorous standards established by the FDA with respect to identity, strength, quality, purity, and potency.
  • All generic manufacturing, packaging, and testing sites must pass the same quality standards as those of brand name drugs.
  • The generic drug manufacturer must prove its drug is the same as (bioequivalent) to the brand name drug.
  • For example, after the patient takes the generic drug, the amount of drug in the bloodstream is measured. If the levels of the drug in the bloodstream are the same as the levels found when the brand name drug is used, the generic drug will work the same.
  • In the West, brand names are given to researched and patented first-in-market innovator drugs.
  • After the expiry of patent period, other companies launch generics of the innovator drug with just the pharmaceutical salt name at a hugely discounted price. So, the only difference between a brand name drug and its generic version is the price.
  • The issue in India is not about expensive brand name drugs versus cheaper generics, as in the West, but one of quality drugs versus suspect quality drugs.
  • Branded generics are also generics with a brand name, plus the quality assurance from well-known companies like Cipla, Sun or Dr Reddy’s. Doctors have come to trust these companies and their brands over time.
  • Indian pharma’s field force numbering nearly one million medical representatives have done a good job of building this trust in their companies and brands.
  • It is simply not possible for doctors to transfer this trust to generics, manufactured by unknown companies.
  • The entire issue of cheaper generics is based on the premise of measurable and enforceable assurance about quality through bioequivalence tests and other globally mandated parameters. In the absence of that, the generics-only diktat is a non-starter.
  • In the absence of an international standard drug regulatory mechanism like the USFDA, Indian doctors have to rely on the reputation of companies like Cipla, Sun and hundreds of others who have demonstrated their commitment to quality over time and become trusted names in the eyes of doctors and patients.
  • Also, Indian branded generic companies have been innovative in terms of drug delivery systems to improve absorption, reduce side-effects, thereby increasing the efficacy of the drug.
  • These novel drug delivery system (NDDS) drugs are available in all category of drugs from ordinary mouth dissolving pain-killers for quick results to complex diabetes drugs that are released into the blood in a steady stream to ensure better blood-sugar control with lesser chances of hyperglycemia – one of the dangerous complications of taking diabetes medicines.

Jan Aushadhi Scheme

  • The Government has launched ‘Jan Aushadhi Scheme’ to make available quality generic medicines at affordable prices to all, especially the poor, throughout the country, through outlets known as Jan Aushadhi Stores (JASs).
  • Under the Jan Aushadhi Scheme, the State Governments are required to provide space in Government Hospital premises or any other suitable locations for the running of the Jan Aushadhi Stores (JAS).
  • Bureau of Pharma PSUs of India (BPPI) is to provide one-time assistance of Rs.2.50 lakhs as furnishing and establishment costs, start up cost for setting up a Jan Aushadhi Outlet.
  • Any NGO/Charitable Society/Institution/Self Help Group with experience of minimum 3 years of successful operation in welfare activities, can also open the Jan Aushadhi store outside the hospital premises. A margin of 16% on the sale price is built in the MRP of each drug.
  • In addition, the JAS are eligible for incentive linked to sale of medicines @ 10% of monthly sales amount, subject to a ceiling of Rs.10,000/- pm for a period of first 12 months. In case of Stores opened in North Eastern States and other difficult areas i.e., Naxal affected areas/Tribal areas etc., the rate of incentive is15% of monthly sale amount, subject to a ceiling of Rs.15,000/- per month.
  • At present more than 175 Jan Aushadhi Stores have been opened across various States/UTs. JAS are opened on the locations as requested by the entity intending to open. The steps are also taken to open Jan Aushadhi stores in all AIIMS, prominent Hospitals, Medical Colleges under the Ministry of Health & Family Welfare.

The Public Health Foundation of India (PHFI) was asked to study the Scheme and suggest remedial measures. PHFI in their report pointed out the following factors which were mainly responsible for the scheme not being successful:
(i) Over dependence on support from State Government.
(ii) Poor Supply Chain management.
(iii) Non-prescription of Generic Medicines by the doctors.
(iv) State Governments launching free supply of drugs.
(v) Lack of awareness among the public

After the report government has taken several remedial measures to remove the problems associated with the scheme. Various steps taken by the government are given below:
a) Increasing the number of products from 361 to 504 medicines and 161 surgical and consumable items. Recently 88 more drugs are added to the basket.
b) Improving the supply chain mechanism through appointing Distributors and C&F agents in different States.
c) Increasing the number of functional stores.
d) Strengthening the Operating Agency i.e., BPPI through augmenting of manpower.
e) Relaxation in the eligibility criteria of Operating Agency for JAS.

However, there are three fundamental areas of concern.

  • The first relates to the efficacy of Indian-made drugs. Oftentimes, such drugs have been found to contain less than the required amount of active pharmaceutical ingredient (API), rendering them ineffective.
  • Closely linked to the issue of efficacy is the lack of data integrity. The poorly managed documentation practices of Indian generic firms featured as the primary criticism flagged by foreign regulatory authorities. The lack of reliable and complete data on the test results of specific drug batches, along with inconsistencies in the records presented, meant that inspection and verification of drug quality was extremely difficult.
  • Another aspect relates to the hygiene standards of the manufacturing plants. Individuals suffering from illness are especially susceptible to infections, and inspections of generic drug plants reveal pest infestations and dilapidated infrastructure

Way forward

  • The Medical Council of India (MCI), in an amendment to the Code of Conduct for doctors in October 2016, has recommended that every physician “should prescribe drugs with generic names legibly … and he/she shall ensure that there is a rational prescription and use of drugs.”
  • How the MCI is going to ensure rational prescription and use, without a framework to measure the same, should be looked into seriously.
  • Rational use and prescription depends on the doctor, the pharmacist, the regulator, and the consumer.
  • Some minimum prerequisites for rational use are: prescription-only medicines (Schedules G, H, H1 and X) must not be available freely over the counter; doctors and their professional bodies along with regulators must ensure there is no misuse of antibiotics and critical drugs; and the removal of all irrational/harmful/useless medicines, both FDCs and unscientific single ingredients, must be ensured.
  • Practical guidelines for rational use and prescription audit of medicines must be developed and implemented seriously by all doctors. Branding of off-patent drugs needs to be discouraged as is the practice in well-regulated countries.
  • The Hathi Committee Report (1975) too had recommended debranding.
  • Price control of an enlarged list of essential and life-saving drugs is a must as was mandated by the Supreme Court in 2003.
  • The current market-based price mechanism of the Drug Price Control Order (DPCO) 2013 is a travesty and has resulted in ceiling prices that allow 2,000% to 3,000% (and in some cases, 10,000%) margins. This needs to be replaced by the cost-plus method of ceiling price fixation of the DPCO 1995.
  • The number one priority must, thus, be the replication of the Tamil Nadu/Rajasthan model of free medicines in all states, and pharmaceutical PSUs must be re-energised and reinvented instead of the government disinvesting in them.
  • Since the issue is also about quality, the government must put in place reforms that will make it mandatory for drug manufacturers in India to adhere to globally accepted standards.
  • Only recently, the government has put out a statement to the effect, “The union health ministry is in the final stages to release a draft guideline towards enhancement of good manufacturing practices (GMP) to align India-specific standards with global regulations for better product quality of pharmaceutical products. Meanwhile, the drug controller general of India has also submitted a proposal to the Union health ministry to mandate upgradation of Schedule M drug manufacturing units to WHO-GMP level under the purview of drug rules towards good manufacturing practices adopted globally.”
  • The solution to the problem of branded versus generic lies in strengthening the existing drug regulatory and quality control structure.
  • The strategy can be two pronged with an increase in the capacity of existing testing laboratories and opening up of new laboratories in government colleges.
  • A time bound plan to make generic prescriptions mandatory will also prepare Indian pharma’s vast supply chain of 800,000 wholesalers and retailers to get used to the new initiative progressively. India’s 800,000 retailers have thrived because it is a profitable high-margin business.
  • Conclusion:
  • The push towards generics is lauded by many stakeholders. In a global economic environment that is turning increasingly hostile to generic drug production, this is a bold move—indicative of the government’s categorical support for one of its key industries.
  • While the push for a generics-only policy is a step in the right direction, it is important to assess and ensure that Indian generic companies are competent enough to take on the task before institutionalizing such a policy. Also, the policy must move beyond rhetoric—for in a sector such as health, faulty policy design will directly affect the country’s mortality statistics.

Also Read:

Spotlight on generic drugs

Generics: Mere slogan or solution?

Promote generic drugs

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