Express Pharma

Cracking the code – Generic vs. Brand Medicines

Dr Suresh Saravdekar, Former Assistant Director, Ministry of Medical Education & Research and Honorary Consultant, Institute of Medical Sciences, Banaras Hindu University, Varanasi advises that the pharma regulatory system should be in proper order before doctors are mandated to prescribe only generic drugs and elaborates on the immediate actions needed to address the chaos of branded vs. generic medicines

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The premier position that India enjoys in the international pharma market is a result of the government support and the talent pool that the country possesses. With continuous government support, the pharma industry has the potential to achieve greater glories.

However, at the domestic level, the situation is not that glorious. This is shown recently when the National Medical Commission decided to put on hold its August 8 rule mandating doctors to prescribe only generic drugs. Indeed, that decision was based on some illusions about the availability of generic and branded medicines in India and not on facts per se. What are the facts? Let’s try to crack the code.

Growth of the Indian pharma industry

Initially, after independence, the main focus was twofold:

  1. Not to depend on MNCs for the manufacture and provision of all essential medicines, including antibiotics.
  2. So, the government shouldered the responsibility of manufacturing all basic essential antibiotics and medicines. This led to the establishment of Public Enterprises like Hindustan Antibiotics, I.D.P.L., Karnataka Antibiotics, and Bengal Immunity, etc. The main reason for this was that initially, private entrepreneurs were least interested in investing in this capital-intensive industry. This move unburdened the private pharma companies allowing them to concentrate and strengthen their base, and they succeeded in gaining a national as well as international market presence as “global generic medicine manufacturers.”

After shifting the focus to a “market-based economy,” the government’s medicine policies became more liberal, generous, and pro-industry. Though these one-sided pro-industry policies led to the creation of a strong base of around 11,000 pharma units in the country, it happened at the cost of lax regulation on the industry. The government literally showered private owners with all sorts of liberties in licensing, manufacturing standards, and marketing, without putting strong regulations in place. This can be seen from the following few incentives provided by the government, some of which are unique to India.

Various options for licensing manufacturing, marketing, and outsourcing

The industry is allowed to manufacture medicine either on its own license or can have a simple marketing license and get all products manufactured on an outsourcing or third-party basis. Various options for outsourcing have been made available as per the industry’s needs.

  • Loan License – Using third-party premises on a loan and hire basis.
  • P to P License – Using premises and manpower exclusively.
  • Third-Party License – Open for all manufacturers.

As a result, presently, there are about 11,000 manufacturing units, out of which only 300 are actively marketing products, while the rest are being used as third-party manufacturing units.

Various options for manufacturing using different standards of GMP

The industry has a wide choice of options to manufacture a particular generic or brand medicine using the following three standards of manufacturing:

A) cGMP standards for strict regulatory markets – These are the highest standards of quality, where there is continuous up-gradation and stringent regulations. This is required to be adhered to if Indian manufacturers wish to export their generic/ brand medicines to Developed Countries such as the EU, US, Japan, Canada, Australia, etc.

B) WHO-GMP standards for soft-regulatory markets – These are good standards of quality, and standards are updated by WHO every two years. This is required for export to Developing Countries in South East Asia, Middle Eastern countries, and a few African countries.

C) Domestic GMP with accepted diluted standards of quality, as no regular upgradation to global standards is mandatory. This is needed for domestic marketing and for import to countries where there is a weak or absent regulation, e.g., underdeveloped countries like Gambia, Zambia, Yemen, Somalia, Nigeria, etc.

Various options to market medicines using brand names for generics

Once the patent has expired, medicines are marketed either by their generic names or by branded names given by the companies. With the various options for marketing provided above, currently, only 10 per cent of the drugs in the domestic market are unbranded/generic, mostly procured by Public Health care services. The rest, around 87 per cent of drugs dispensed in India, are so-called Branded, Branded generics, Mirror brands, etc. As a result, the market is flooded with the same medicines under thousands of brand names. 1

  • Currently, as per a study done by Competition Commission of India, it was revealed that during 2011-2012, 47,478 brands were available with 2,871 formulations marketed in India, with an average of 17 brands for every formulation.
  • Vitamins/minerals and sex stimulants display higher brand creation. Vitamin formulations have, on average, 37 brands, and sex stimulants have 19 brands per formulation.
  • In the case of vaccines and anti-neoplastic medication, it requires high standards and more capital investments, resulting in the lowest brand creation, with only five and seven brands per formulation, respectively.1

Unrestrained merrymaking game of brand names

Surprisingly, even today, there is no central database of all brand names available in India. Companies only need to provide an undertaking to the drug regulatory authority stating that a particular brand is not used by any other company in India. As a result, during 2011—2012, approximately 235 drug brands were introduced monthly, with a total value of Rs. 318 crores. Annually, about 2,827 brands with a total value of Rs. 3,810 crores were introduced. The number of brands varies considerably even between different strengths and doses.

  • In the anti-diabetes category, the popular combination of glimepiride + metformin (Tablet, 500 mg) remained the top, with about 137 brands from 120 companies.
  • Rosuvastatin (Tablet, 10 mg), a cholesterol-lowering agent, was marketed through 127 brands by 105 companies.

Indian Jugaad – Mirror brands and interchangeability of brands of the same company

Normally, it is expected to have the same brand name for the same generic by the “Same Company.” However, in India, companies are allowed to have “Different brands for the same generic marketed by the same company.” This is called “Mirror Brand.”1

  • There are five to six different brands of the same composition Amoxicillin and Clavulanic acid supplied by the same company for the same formulation of the same dose and strength.
  • 15 companies produce each two different brands of Glimepiride + Metformin (Tablet, 500 mg).
  • Four companies market Rosuvastatin (Tablet, 10 mg), with three different brands of the same formulation.1

Thus, in India’s pharma market, product differentiation is introduced through brand differentiation, even though they are ostensibly homogeneous commodities and functionally interchangeable.

FDCs – A tool to play with permutations and combinations

This is another area where brand names play a very important role. This provision allows Indian marketing companies to play with all possible permutations and combinations of medicines. To explain it using a common example, a single drug Dicyclomine is combined with various other drugs, and all combinations are permitted for sale. For instance:

  • Dicyclomine + Paracetamol
  • Dicyclomine + Paracetamol + Diclofenac
  • Dicyclomine + Paracetamol + Domperidone
  • Dicyclomine + Paracetamol + Clinidium + Dimethicone
  • Dicyclomine + Chlordiazepoxide + Clinidium
  • Dicyclomine + Mefenamic acid + Dimethylpolysiloxane
  • Dicyclomine + Nimesulide

This results in more than 500 brands of FDCs under Cough preparations and 500 under Vitamin combinations.