Over the last two weeks, there has been a spirited debate about how to make medicines affordable to the citizens of India. Driven by the Prime Minister’s call to make less expensive medicines available to the people of the country, there have been several news-reports and well meaning discussions on this topic in the print media and on television. While these discussions seem to present every stakeholder’s point of view, no one seems to be interested in understanding how to best go about achieving this well-intentioned objective.

I wanted to take a step back and ask a few questions to all who profess to have an opinion on this issue.

  1. What data do we have to inform us that switching to a generic version of the drug saves us money?
  2. Do we want to discount the clinical experience of your doctor and impose restrictions on what to prescribe on her?
  3. How confident are we that this mandated “generic version” only prescription actually works as intended?

Lets get the nomenclature right first. The term “generic” as it is used in the Indian context is not the same as we seem to appropriate from the US context. In the US, “generic drugs” are those which are no-longer protected by patents. In our country, “generic” refers to “unbranded” medicines; because our companies produce and market drugs that are no longer under patent as “branded-generics”. Unless we understand this difference, the rest of the conversation doesn’t make much sense.

The next thing for us to understand is why would a manufacturer “promote” something that is no longer protected by a patent. The assumption we make in this case is that if a product is protected by a patent, the patent holder can charge a higher price  because there isnt anyone to compete against that product. Therefore, pharmaceutical manufacturers bred armies of what we call “medical representatives” who eulogized the benefits of such products to healthcare practitioners. In the Indian context, two different manufacturers could in-principle manufacture the same drug (whether it was protected by a patent until we adopted the TRIPPS agreement was immaterial). Therefore, how does one differentiate (meaning push its product to more consumers) if there is no differentiation in the product itself? Here came the magic of marketing. We devised flashy advertisement campaigns, promoted the virtues of “my” product under the guise of “medical-education” and came up with more innovative strategies which perhaps be left alone. This is how “brands” were born. Pharmaceutical companies used novel and very interesting strategies to ensure that their “brand” sold more than the “other brand” despite the fact that the underlying product was supposed to be identical.

There were other strategies like “Fixed Dose Combinations” that were invented to combine two or more drugs into a “cocktail” under the guise of better patient compliance with the dosing regimen. But that is a topic for another time. Lets just stick to the simple stuff for now.

Inspired by our penchant for jugaad, and the fact that the regulatory framework that was supposed to keep an eye on the industry was fast-asleep in the best case and was colluding the industry at worst, enterprising pharmacists (who made money on the margins that they retained buying from the wholesaler stockist and selling it to gullible patients) developed their own models for how to be profitable. They “pushed” the product that gave them the highest margin on sale. Knowing that two or more of the chemical salts were “supposed” to be similar, what was the harm in “substituting” the more expensive version to the patient? After all, they were running a business, not a charity. They negotiated hard with each brand on their margins and whoever offered them the most was the product of choice. Once they got used to this idea, the next concept of “frugal innovation” was to “make-our-own”. The regulatory framework never asked for any proof of therapeutic efficacy for any drug that was over four years old; so they could set up a tablet-punching machine in a garage and stamp out as many of these pills as they wanted. Because they cut corners at every step, meaning, no process checks, no quality control, their profit margins were the highest. This is how our “unbranded” medicine industry was born.

The pharmacists then “pushed” these unbranded drugs, many of them made in garages and had no efficacy and we ended up with an industry with 30,000 pharmaceutical manufacturers. And because the regulator was so incompetent, it seldom checked for quality or therapeutic efficacy of these products. In those rare cases it did, and its inspectors found problems, our legal-justice system essentially killed their efforts by letting these wrongdoers go with a slap on the wrist.

Now that we understand what “generic” drugs are in the Indian context, I would love to hear from you on what your views are on the questions I have posed above. I was so hoping to hear this on the many shows I have watched and written pieces I have read, unfortunately, they seem to regurgitate the same talking points. I am hoping that we can have a more meaningful discussion here.

More in the next blog.