INDIA- GENERIC MEDICATIONS

 

The cost of medication for treatment varies greatly with countries. The cost of medicines in the USA is way above the Global median prices. A study by UK based health tech company named Medbelle ranks India as one of the 5 countries with the lowest median prices for branded and generic drugs taken as a whole.

The US drug prices are about 307% more than the Global median while for India this is -74%. Indonesia and Thailand have even lower drug prices than India at over -90% the median.

However, more than the drug pricing, what has to be taken into account is the Out of pocket expenditure spent on medication. In the USA this is hardly 11% because the rest is taken care of by Insurance. In the case of India this is 64%. With the already lower incomes this out of pocket expenditure is crushing on the lower strata of population.

And even that -74% of Global mean itself is a myth because it also includes both Branded and Generic medications. In India no doctor prescribes generic medications and the entire lower strata of population are at the mercy of branded drugs which are far more expensive than Generic ones. If one takes that into account, then the medicines in India would cost no less than the Global median. 

Now what I am mentioning now below is not with any malice towards doctors, but it is a hard fact that is going on in India today. My father in law himself was the Head of the Department of Dermatology in the local General Hospital here and today at 86 years of age he still practices. There are more than a dozen doctors in the in laws family relations practicing here and also elsewhere.  I know of what high integrity they are, but I also know other doctors who are not, and are money making machines. I feel that at least 40% of the Doctors have ethics but the rest 60% are certainly fit in the mould I describe below. I respect those Doctors who show high integrity, but dislike those who exploit the patient to make money.  

Probably moved by the high Out of Pocket expenditure on drugs the Government indicated to the National Medical Commission to make Generic drugs compulsory in Doctors prescriptions.

The National Medical Commission which is the regulatory body guiding medical professionals in India initially brought out an order that required Doctors exclusively prescribe non branded generic medication to patients. The idea of the Government is to make medication available to people at cheaper rates and reduce medical expenditures.

The Doctors community is badly shaken by the order. However, after the meeting the IMA had with NMC in 21^st August the move was put on hold.

Why generics? Because they do not carry any patent and can be made by anyone without paying any royalty. Therefore they come pretty cheap compared to the branded drugs despite having the same composition. For example Rabeprazole is a medication for acidity. The same drug when branded would cost about Rs 115 while a generic one only Rs 22 and that is a huge difference indeed.

However in the present day the practice of big medical companies in India had been aggressive sales promotion through medical representatives who induce the doctors by giving various gifts into prescribing their drugs and the Pharma companies also arrange tourist jaunts to the doctors terming them as conferences. On top of this, the medical shops selling the drugs would get a 25-30% commission on the medicines sold. Looking at these high margins, many of the Doctors run their pharmacies attached to their clinics.

All this expenditure is recovered by Pharma companies by pricing their medications higher. On top of that they include high margins of the products being sold loading it with a net profit margin of some 30% on the products sold by them.  This is the reason why the Pharma companies in India have huge profits compared to their sales when we compare them to any other manufacturing/processing industry in India.

So what was IMA’s contention when they met the minister Mansukh Madaviya and NMC on 21^st August? They claimed that they were worried about the quality of the drugs produced by smaller companies and those companies do not have the same quality control as the bigger companies. The Doctors therefore said they are worried about the doctor’s reputation if the medications do not work. They even contended that generic medication is risky for the patients.

If the doctors truly had the welfare of the patients in mind, then what they should have suggested is to bring in the same amount of controls and regulation on the Generic makers like the one on the Branded drugs. Instead they merely used that as a pretext to raise a bogey to continue the usual branded medication.  

By using generic drugs Doctors lose the privileges they get from Pharma companies, and also the high profit margins they get from selling medications in their own pharmacies. In branded drugs too there is a huge variation in pricing. Some brands cost virtually double the cost of others. The doctors tend to prescribe the medications of the highest possible cost if they have in house pharmacies because the higher the quantum of sale, the higher the margin they get.

So if the new policy is taken up again sometime again, then the ones who would lose out are the Pharma Companies, the Doctors and also the Pharmacies. The sole gainer would be the patient, but does he stand a chance against the influential lobby of doctors, Pharma companies and Pharmacies?  They would do their best to scuttle the move and bring in many excuses in their favour.