Review Article CODEN: IJPRNK ISSN: 2277-8713 Bhupender Singh, IJPRBS, 2015; Volume 4(5): 26-38 IJPRBS

Available Online at www.ijprbs.com 26

AN UPDATE ON INITIATIVES TAKEN BY INDIAN GOVERNMENT TO PROMOTE GENERIC MEDICINES.

BHUPENDER SINGH, ARUN NANDA, VIKAAS BUDHWAR

Department of Pharmaceutical Sciences, Maharshi Dayanand University, Rohtak, Haryana.

Accepted Date: 14/08/2015; Published Date: 27/10/2015

Abstract: The Indian pharmaceutical sector is highly knowledge based and its substantial growth is positively affecting the Indian economy. Pharmaceutical companies manufactured 20-22 percent of the world's generic drugs in volume terms and offered 600 finished medicines and nearly 400 bulk drugs in formulations. However affordability and availability of cheap drugs to country’s own population is still challenging and crucial. In our country a large number of people are living below poverty line. They are not able to afford costly branded drugs because many a times these drugs are too expensive; therefore, cheaper generic drugs are a preferred option. Promotion of generic medicine can effectively cut down the ‘out of pocket’ expenses. The central as well as state governments through numerous schemes have been promoting generic medicines and providing affordable generic medicine to masses. However, the pace at which promotion is done needs catalyst to ensure the public health through availability and affordability of generics in our country. The review discuss the current scenario of generic medicine; mindset of patient, doctor and the pharmacist and the measures through which the promotion and awareness about generic medicine can be done. This review critically analyzes the various governmental initiatives to promote generics in India, and attempts to highlight the various shortfalls in the same. Authors have suggested some changes in the statutes amongst other initiatives to promote generics in India.

Keywords: Jan Aushadhi, generic schemes, branded medicines, generic promotion

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Review Article CODEN: IJPRNK ISSN: 2277-8713 Bhupender Singh, IJPRBS, 2015; Volume 4(5): 26-38 IJPRBS

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INTRODUCTION

Globally, the Indian pharmaceutical industry is ranked 3rd largest in volume terms and 10th

largest in value terms. The Indian pharmaceutical Industry has witnessed a robust growth and is

expected to grow at a compound annual growth rate (CAGR) of 14% to reach a turnover of Rs

2.91 trillion (US$ 47.06 billion) by 2018 which is valued at Rs1.6 trillion (US$25.87billion) at

present as reported by Ministry of External Affairs, Government of India 2014 [1].

However affordability and availability of drugs to country’s own population is still challenging

and crucial. The situation as in developing countries is quite more serious than in developed

countries the patient has to bear the total cost of medicine by himself for almost all medicines.

At least 80% of the population has to indulge “out of pocket” expenditure in the absence of

nationwide health insurance coverage [2]. Securing access to 348 essential drugs covered under

National List of Essential Medicine, (NLEM) 2011 still remains an enormous challenge.

According to World Health Organization (W.H.O.) one-third of the world's population, mainly in

low-and middle-income countries continues to lack regular access to essential drugs. In the

poorest parts of Africa and Asia, this figure rises to over 50%. The reasons are well known and

comprise insufficient financing, deprived health care and delivery lack of awareness [3].

In India, unapproach ability to essential medicines challenges most patients seeking treatment

of acute and chronic diseases. Approximately 40% of Indians live on less than US $1 per day and

most of them pay out of pocket for using healthcare. Out-of-pocket spending in India is over

four times higher than public spending on healthcare. Unexpected illness can have a disastrous

effect on the family of the ill person; direct out-of-pocket payments could push 2.2% of all

healthcare users and one-fourth of all hospitalized patients, into poverty in a year. Large and

unpredictable health payments can expose households to significant monetary risk and, at their

most extreme, can result in impoverishment [4].

One of the major components of the increased cost of healthcare related expenses is cost of

medicines. Medicines consume a major portion of total money spent on healthcare. The use of

generic drugs has been steadily increasing internationally as a result of economic pressure on

healthcare budgets. Generic drugs provide the prospect for major savings in healthcare

expenditure since they are significantly lower in price than the equivalent branded

counterparts. Prescribing drugs by their generic name or International Non- proprietary Name

(INN) by doctors and requesting pharmacists to dispense generic drugs are often suggested

means for lowering the costs of health care [5]. Generic drugs are a proven cost-effective

strategy for dropping drug expenditure. The cost of health insurance premium will also be

reduced if generic medicine will be commonly prescribed by physician/doctors. Only 17 per

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cent of the total population was found covered by health insurance at the end of March 2014

as per the Insurance Regulatory and Development Authority (IRDA) [6].

What are generic medicines?

According to W.H.O. a generic medicine is “A pharmaceutical product usually intended to be

interchangeable with an innovator product that is manufactured without a license from the

innovator company and marketed after the expiry date of the patent or exclusive right” [7].

In India generic version of medicine has been first described in DPCO 2013, as ‘A formulation

sold in Pharmacopoeial name or the name of active pharmaceutical ingredient without any

brand name’ [8]. According to Department of Pharmaceuticals, Government of India, generic

medicines are unbranded medicines which are equally safe and having the same efficacy as that

of branded medicines in terms of their therapeutic value. The prices of generic medicines are

much cheaper than their branded equivalent (Table (a)) without compromising the quality,

safety and efficacy of generic version of medicine [9].

Table (a) Price comparison of few Branded/Branded-generic medicines with their generic

counterparts available at Jan Aushadhi Stores

Why generics cost less?

A brand name drug has to go through 10-15 years of research and cost over $1 billion. The

success rate is 5 out of 10,000; further the sale promotion cost is also involved. As patent for a

brand name drug expires, any other company can manufacture the drug and sell a generic

Drug /Strength Manufacturer Trade Name Price/Tablet or Capsule (Rupees)

Tramadol- 50mg Intas Tramatas 6.36 Zydus Tramazac 9.15

Win Medicare Urgendol 8.3 Jan Aushadhi Tramadol 0.39

Azithromycin- 500 mg

Venus Remedies Actimycin 205

Epitome Azitome 27 Cipla Azimax 20.2

Jan Aushadhi Azithromycin 10.5 Clopidogrel- 75mg Cipla Clopivas 3.72

USV Clopigrel 21.5 Sanofi Synth Plavix 115.35

Jan Aushadhi Clopidogrel 0.67

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version. These companies must only prove bio-equivalence studies .This means that generic

drug companies do not have to spend as much time and money. This is why generic drugs cost

less [10].

In India one more class of drug exists ‘Branded Generics’ which is a generic product but

manufactured under a brand name and is not promoted by its manufacturing company. Thus,

these branded generics are “generics” as far as the trade is concerned, but are branded, as far

as the patient is concerned [11]. These drug products have given the pharma trade huge

margins at different levels. But the patient, who is the ultimate consumer, feels cheated and is

not benefited by this practice. The variation between the maximum retail price (MRP) and

price-to-retailer (PTR) speaks a lot about the profitability shared by the pharmaceutical traders

[12].

Promotion of Generics by State and Central Governments

In India, the central government as well as several state governments took several steps in

promoting a generic medicine through regulations and schemes. In 2008 Jan Aushadhi was

scheme launched by the Department of Pharmaceuticals in association with Central Pharma

Public Sector Undertakings, to provide quality medicines at affordable prices to the common

people. Jan Aushadhi stores were proposed to be set up all over the country (at least one per

district) to provide generic drugs, which would be available at lesser prices but are equivalent in

quality and efficacy as expensive branded drugs. In November 2008 first generic drug store was

opened at the public sector civil hospital in Amritsar, Punjab state, and the second store in

February 2009 at Shastri Bhawan, New Delhi. Eighteen more such stores have been opened as

of September 2009 in the states of Punjab, Haryana, and Rajasthan [13]. Out of 164 Jan

Aushadhi Stores opened so far, 87 are presently functional as provided by official website of Jan

Aushadhi. The government has proposed that each of the 660 districts in India will have at least

one Jan Aushadhi store. In spite of the fact that these stores are being established by the

government of India in the larger public interest, reports from few of these stores suggests that

sales are minimal [14-15]. A patient appears to be reluctant to purchase medicines from these

stores of public facilities because of their apprehensions about the quality of medicines and

even doctors and pharmacists are not exception to this misconception [16]. Further a reason of

limited availability of drugs at these stores reduced the pace of growth of the government Jan

Aushadhi stores, a study found the mean availability of drugs at these stores stood at only 33

per cent. In 2013, a government commissioned consultancy tasked with preparing a new viable

business plan for the project estimated that 84 such shops are functional of the 149 and despite

to mandate to store 319 drugs, only 85 drugs across 11 therapeutic groups was available [17].

This limited portfolio of medicines coupled with chronic stock-outs has seriously eroded the

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credibility of these stores as customers desire a one-stop shop for all prescribed drugs. The

status of functional Jan Aushadhi stores till December 2014 is depicted in Figure 1 [18]

Figure: 1. Status of Jan Aushadi (December, 2014)

In February 2012, partly as a response to the persistent demands of civil society and the

recommendations of the High Level Expert Group of the Planning Commission, the government

announced plans to increase the outlay for health to 2.1% of the gross domestic product by the

end of the 12th Five Year Plan (2012-17) which was 1% in the previous five year plan [19].

In October 2012 Chief Minister of Rajasthan Ashok Ghelot announced for free generic

medicines and diagnosis to everyone. In beginning of this scheme 200 types of generic

medicines have been put for free distribution which was further increased to 400 and currently

the number is 600 types of generic medicines. However the number of medicines available

differs on the nature of hospital. If a hospital is attached to a medical college the number of

medicines available is 500-550, in district hospital 325-400 & community centers 150-250 [20].

As per the study conducted by Mathur and Vyas at Sardar Patel Dispensary, Jaipur it was found

that there was increase in number of outdoor patients in dispensary to avail the benefit of the

scheme of free generic medicines and also found that accountability on distribution needs to be

reinforced [20]. The initiative of this scheme benefited two lakh people every day [21]. The

present Chief Minister Vasundhara Raje has adopted a “targeted approach” in implementing

this scheme which was a “universal” one when launched by the Ashok Ghelot. With targeted

intervention, only beneficiaries of food security scheme will be eligible for the benefits of the

scheme [22].

0

10

20

30

40

50

60 53

24 24 23

10 8 5 5 4 4 3 3

53

3

9

0 0 0 2 5 3

0 3 3

No. of stores opened

No. of functional stores

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In September 2013 UPA Chairperson Sonia Gandhi inaugurated Kerala’s two major health

schemes Arogya Kiranam and Distribution of free generic medicines in all government

hospitals. Under the scheme to distribute generic drugs free of cost, all government hospitals,

up till primary health centers, would be providing 820 drugs to patients in outpatient clinics to

all except government employees and income-tax-payers [23].

In November 2013, at the time when the Union Department of Pharmaceuticals was working on

reviving the 'Jan Aushadhi' project to make generic drugs available to buyers at an affordable

price, Gujarat government says it will stick to its self-developed model of offering free

treatment for segments of the population [24].

The Maharashtra state government in 2013, decided to use generic drugs for all medicine

supplies to public hospitals. Informing this in the state legislative council public health minister

Suresh Shetty said that the government would formulate a module to spread mass awareness

regarding generic drugs and their benefits [25].

The Tamil Nadu Medical Services Corporation (TNMSC) initiated drug procurement system, the

incorporation happened through a government order. The TNMSC does central tendering and

purchasing of the essential drugs for the entire state that are delivered to the district

warehouses by the supplier in stipulated quantities. From here the drugs are distributed to the

facilities based on a value-based passbook system (each facility is allotted a fixed amount and

can requisition for any quantity of drugs in the Essential Drug List (EDL) within that amount [26].

To infuse a fresh lease of life into its fledgling chain of pharmacy outlets, Jan Aushadhi, the

government plans to link drug procurement for some of its stores to Tamil Nadu Medical

Services Corporation (TNMSC), and learn lessons from the much celebrated state-run model.

TNMSC, which functions as an autonomous agency in Tamil Nadu, buys essential drugs in bulk

through a centralized tendering process, which gets delivered to the district warehouses. From

there on, it goes to different government medical facilities . The agency also offers a service for

procuring and testing drugs for other states, which gives it the advantage of scale and better

bargaining power [27].

In June, 2012 Karnataka government has teamed up with State Cooperative Consumer

Federation to set up 20 Janatha Bazar generic drug stores across the state to make available

affordable drugs to the poor patients in the state. Four Pharma companies Cipla Torrent, Sun

Pharma and Intas have consented to supply generic medicines at subsidized costs to these

stores [28]. The initiative is on similar lines of the Department of Pharmaceuticals (DoP)'s Jan

Aushadhi generic stores which was launched in 2008 to make available affordable drugs to the

poor patients.

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In 2012 an order was sent to all state health secretaries by Drug Controller General of India G N

Singh asking them to instruct their drug license issuing authorities to issue licenses only on

generic names and not on branded or trade names, which is the usual practice now. The

parliamentary standing committee in its scathing report had also expressed strong objection to

the practice of issuing licenses on brand names [29].

These activities in 2012 suggest that scenario might change regarding the promotion of generics

but present condition of affordability and availability of cost effective medicine is still a big

challenge.

A study by World Health Organization in India revealed that generic medicines were available

only in 20%-40% of public health clinics surveyed; WHO said, “More than half of public fac ilities

lack essential medicines”. Around 78% of healthcare expenditure in India is out-of- pocket of

which 72% is spent on medicines [29].

National Sample Survey Organization (NSSO) records show that the highest out-of- pocket

expenditure on drugs is in Himachal Pradesh (87.95%), followed by Uttarakhand (87.75%), Bihar

(84%), Rajasthan (83%), Uttar Pradesh (81.86%) and Chhattisgarh (81.38%). In larger states like

Maharashtra 60% of out-of-pocket expenses are for buying drugs, Karnataka (65%), Delhi (74%),

Tamil Nadu (66%), Madhya Pradesh (71%) and West Bengal (65.80%) [29]. Low public sector

availability forces patients to purchase medicines from the private sector, where prices are

usually higher.

In its existing form, the Jan Aushadhi campaign will able to increase the affordability of very few

medicines for a very small population. Yet, by implementing certain possible changes in the

program, government could improve the access to essential medicines for the poor population

of country [13]. Reports from a few of the new stores suggest that sales are minimal [15].

Patients who visit public facilities generally want free medicines supplied through the public

facility pharmacy or if they can afford them, they purchase branded or branded-generic

medicines from private retail pharmacies. Patients seem to have little or no faith in the quality

of generic medicines available at public facility, but poor patients who cannot afford to

purchase medicines have no choice but to take the available free medicines. Patients appear to

be reluctant to purchase generic medicines at generic drug stores on the premises of public

facilities because of questionable quality.

Promotion of generic medicines by providing generic medicines free of cost cannot sustain as a

solution for long term due to financial constraints in budgets. It is very necessary to make

patient as well as doctors aware about generic medicines and their quality. According to a

report May, 2013 by Indian Express, Health Ministry after mentioning its Rs 6,000 crore a year

scheme to provide free generic drugs at government health centers and hospitals for a year,

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the health ministry has now shelved the plan, due to financial constraints and its inability to get

in place a drug procurement policy [30]. The National List of Essential Medicine (NLEM)

contains 348 drugs, none of which is covered under patent protection which means a generic

copy of these drugs can be made and provided to patients but due to mindset and practice of

physician to prescribe costly branded drugs and further a pharmacist doesn’t has the authority

to substitute generic version of medicine, a patient either has to buy costly drug or just go

without treatment. So, if common public is aware that generic is a true copy of branded drug

and performs the same activity at less cost, and if one can easily identify generic medicine the

health care cost can be reduced to greater extent.

Myths about Generics

Although, the generic drug are a true copy of its branded counterpart with the added

advantage of being cheaper than the branded ones; yet in practice, branded expensive

medicines are used with the widespread belief among the public as well as the trade that the

branded product is better/safer and therapeutically more effective than its generics

counterpart. Some common myths are discussed below:

Doctor’s bias against generics: Largely physicians have a mindset that the branded drugs are

better than generic drugs resultantly most of the doctors prescribe the branded drugs. In a

study reported by Singal & Nanda (2010), on randomly selected 500 doctors in Haryana

state in India, from the public as well as private medical facilities, it was found that there

are more than 40% doctors who never prescribe the generic drugs [31]; there are several

similar surveys were reported, which show the poor generic prescription and the

misconception about the safety and efficacy of the generic drugs [32-33-34]. According to

Medical Council of India (MCI), Code of Ethics Regulations, 2002 “Every physician should, as

far as possible, prescribe drugs with generic names and he / she shall ensure that there is a

rational prescription and use of drugs”.

Pharmacist reluctance to stock generics because of less profit

Legal lacunae - A pharmacist cannot substitute cannot substitute a “brand” with a

“generic”. According to Drug and Cosmetics Rules 1945 “No person dispensing a prescription

containing substances specified in Schedule H or X, may supply any other preparation,

whether containing the same substance or not, in lieu thereof”.

Legal lacunae – no means to identify a branded generic/ generic as opposed to branded

medicines.

No advertisement by government regarding the safety and efficacy of generics

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Conclusion & Recommendations

According to situations prevailing about generics in India, the authors suggest some remedial

measures and recommendations for safeguarding affordable quality medicines to the general

public in the country.

1. It is very important to clear the myths about generic medicine in the mindset of patients as

well as of doctors, and government should take initiative to promote generics by

campaigning about the benefits of choosing generic medicines to cut down out of pocket

health care expenditure without compromising the quality. Much emphasis needs to be laid

upon the teaching/ training of physicians, who need to be informed of the good quality of

generics.

2. The concept of Jan Aushadhi stores launched by the Indian Government is also not picking

up, although the generic medicines with lower MRP as compared to their equivalent

branded counterpart are available at such stores. This scheme needs to be given a strong

push up at all levels. The range of generic products available in such stores is narrow, and

the total number of such stores have fallen short of target.

3. The Drugs and Cosmetics Rules, 1945, should be amended to provide for mandatory

identification mark on generics (to distinguish them from Branded-generic/branded

medicines).

4. Government should sponsor studies on comparison of branded with generics

5. Need to allow generic companies to advertise their quality

6. Active co-ordination and co-operation between the Central & State Governments, is

essential for the running of Jan Aushadhi stores successfully.

7. A pharmacist being a healthcare professional should be allowed to made ‘generic’

substitution with ‘brand’, by suitably amending Drugs & Cosmetics Act & Rules.

8. Government and MCI should strictly monitor that all prescribers prescribe medicines by

generic names (and not by brands). Strict penal action be initiated in all cases of non-

compliance, by prescribers.

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