'Branded generics', where patients are fleeced

'Branded generics', where patients are fleeced

The 2017 Trade Policy Agenda unveiled by the Trump administration on March 2, 2017 pushed for a stricter regime for intellectual property rights (IPRs) and patents. While agreeing that India’s reforms on IPR are encouraging, it said “India’s new National Intellectual Property Rights Policy [NIPRP] should protect US innovations”.

India’s defence is based primarily on the flexibilities available to the developing countries under WTO agreement on Trips [trade-related intellectual property rights] to ensure availability of drugs to patients [majority of them are poor] at ‘affordable’ prices. If the concern for the poor is so overwhelming, then the government must ensure that on ground zero, patients should get medicines at prices they can afford. Are they really getting?

The manufacturers of the so called ‘branded medicine’ charge high price. This is due to the collusion between them and the doctors. Under a quid pro quo arrangement, the doctor prescribes medicine of a particular company which in turn gives all kinds of allurements [including monetary benefits] to the former. Given that hapless patient has no option but to follow doctor’s advice, this tacit collaboration continues unabated leading to unjust enrichment of the duo.

What enables them to get maximum mileage is use of label ‘brand’ which gives an impression that the company invests heavily in research and development [R&D]. The term is borrowed from developed countries such as USA where patented drugs are sold under a brand; on the other hand, off-patent drugs are sold only as pure generic, without using any brand name.

The innovator company spends huge resources on discovery of a new molecule [core ingredient in medicine], its development and conducting studies to demonstrate its ‘safety’ and ‘efficacy’ for getting registration from national regulator. It also has the responsibility of promoting rational and scientific use of the medicine. The new/patented drug has therefore, to be priced high so that these costs – in millions of dollars – can be recuperated.

Over 90% of medicines sold in India are off-patent. Unlike in USA where an off-patent medicine can only be sold as ‘generics’, Indian regulator is very generous in allowing these to be sold as ‘branded generics’. A company wanting to sell bio-equivalent [or generic] of an original patented drug gets registration riding piggyback on the efforts of the innovator. He gets permission to sell for a song - without having to spend money on R&D. Yet, use of title ‘brand’ gives it enormous pricing power which he uses to the hilt.

It is ironical that even as these companies lose no time in lambasting innovators for exploiting their patent monopoly and go that far to even oppose patent grant often leading to delay [or even rejection], they themselves have no hesitation in exploiting patients.

To counter this, Prime Minister Narendra Modi has exhorted doctors to prescribe medicines using their generic names only. Already, the Union Ministry of Health and Family Welfare is preparing a ‘regulatory framework’ and drafting necessary amendments in the Drugs and Cosmetics Act, 1940.
There can be no disagreement on the dire need to rein in this unethical practice. But the crucial question is whether a mere act of requiring the doctor to prescribe the medicine via generic name will solve the problem? The answer is an emphatic no.

This would merely shift “decision making” from doctor to chemist who may not understand scientific rationale or have best interest of patient in mind. In that scenario, manufacturers will start lobbying with chemists whom they will find more amenable than the doctor.

Under the extant dispensation, while prescribing a particular brand, the doctor authenticates the quality [implicit in writing the prescription] taking in to account credentials of manufacturer as also feedback received from patients. By asking him/her to write only generic name, the government would have ended up dismantling this important quality assurance mechanism.

Nearly 50% of medicine market in India is made up of combination drugs, that is, medicines with two ingredients or more. The doctor is best equipped to determine which brand offers an efficacious combination product. If the doctor were to prescribe generics only and the chemist is expected to decide a product that has these ingredients in required proportion, this would be disastrous.

Putting the ball in chemist’s court will also exacerbate the menace of spurious medicines which is already a major headache for the authorities. This stuff gets space wherever patient makes purchases without doctor’s prescription. Now, with the doctor mentioning only generic name in the prescription, the chemist would get extra room for manoeuvrability and even patients buying with doctor’s prescription are likely to be duped.

Worse than disease

In short, Modi’s prescription is a case of ‘remedy being worse than the disease’. To counter the malady, the government should go for a three-pronged strategy.

First, the title ‘brand’ should not be allowed to be used by all and sundry. This should be sparingly permitted only to those companies which have an unflinching commitment to R&D with proven track record. The probability of such companies indulging in unethical practices and fleecing patients is negligible vis-à-vis others who have no interest in R&D and stewardship.

Second, the government should put in place a regulatory architecture [including laws on protection of IPRs] which induces companies to invest in R&D and come up with new products to meet a variety of therapeutic needs at affordable prices. At the same time, doctors should be goaded to be more sensitive to the price aspect [besides quality] while writing the prescription.

Third, there is an urgent need to mount surveillance to nab dubious characters. The sector regulators - Medical Council of India, National Pharmaceutical Pricing Authority of India, Drug Controller General of India etc should effectively enforce rules in their respective jurisdiction.

Apart from contributing to a more responsible, R&D- oriented industry committed to meet patients’ needs at affordable prices, the above package will also enhance India’s compliance with its obligations under WTO Trips agreement and make us less vulnerable to criticism from developed countries like USA.

(The writer is a policy analyst based in New Delhi)
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