All India Radio (AIR) IAS UPSC – Generic Medicines- A fillip to India’s healthcare system

  • IASbaba
  • April 27, 2019
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Generic Medicines- A fillip to India’s healthcare system


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General Studies 2

  • Issues relating to development and management of Social Sector/Services relating to Health 

General Studies 3

  • Indian Economy and issues relating to mobilization of resources, growth, development and employment
  • Indigenization of technology

No government can allow market forces a free hand in the pricing of medicines. Affordability of medicines has to be ensured so that no person in need of it has to suffer. This is especially true in India where a large number of people are still poor.

The present government has been focussing on making medicines affordable by making them available through Jan Aushadhi Kendras, enabling price control of essential medicines, promoting prescription of generic medicines by medical practitioners and focussing on a conducive intellectual property regime (IPR).

What are Generic drugs?

Nearly all drugs have three types of names, the International Union of Pure and Applied Chemistry (IUPAC), the non-proprietary or generic, most commonly the International Non-proprietary Name (INN) administered by the World Health Organisation (WHO), and the brand name. Some countries, such as the U.S., Britain and Japan, have their own generic names or approved names.

Once patents have expired, companies other than the original manufacturer can produce and sell the drug. This usually results in significant reduction in costs. These off-patent drugs are called generics internationally. However, the term ‘generic’ has a different meaning in India’s pharma trade. Medicines marketed exclusively with INN names are called generics or generic medicine.

The WHO advocates generic prescribing as part of an overall strategy to ensure rational medical treatment and prescribing tailored to local conditions. In India, there are many barriers to rational prescribing.

Generic drugs tend to cost less than branded ones. These drugs form the largest segment of the Indian pharmaceutical sector. The increasing prevalence of chronic diseases and ever-rising costs of hospitalisation and medicines are responsible for the growth of the generic drugs market.

Directive on prescriptions

Mandatory Name on packaging: Due to sustained efforts by the government to put in place a legal framework to promote generic medicines, the Medical Council of India issued a directive in September 2016, making it mandatory — by amending the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 — to prominently mention the generic names of drugs along with brand names in prescriptions. There is an advisory to State drug controllers that all branded drugs, imported or domestically manufactured, should mandatorily have generic names mentioned in bold letters while packaging.

Balance between health of consumers and financial health of pharmaceuticals: The instrument of price control is also being used to restraint companies from pricing their medicines exorbitantly. ‘Every few years, the Health Ministry, in consultation with experts, draws up a National List of Essential Medicines (NLEM). These medicines, deemed essential for the treatment of common conditions, automatically come under price control. Under NLEM 2015, a total of 376 drugs are under price control. In addition, the government has the power to bring any item of medical necessity under price control — paragraph 19 of the Drugs (Prices Control) Order, 2013. This provision was used to regulate the prices of cardiac stents and knee implants’. There has been an attempt by the government to strike a fine balance between the health interests of consumers and the financial health of Indian pharmaceutical companies.

India as a supplier: India has also emerged as the low-cost supplier of medicines to other countries and is the largest provider of generic medicines globally in terms of volume. The Indian pharmaceutical sector industry supplies over 50% per cent of the global demand for various vaccines, 40% of generic demand in the U.S. and 25% of all medicines in the U.K. At present, over 80% of antiretroviral drugs (used globally to combat AIDS) are supplied by Indian pharmaceutical firms.

Patents and rights: A serious threat to affordability of medicines comes from big global firms. These pharmaceutical companies and their governments have been trying to lobby with the Indian government to make patent protection more stringent despite the fact that both compulsory licensing and prohibition of evergreening, provided under the Indian Patents Act, 1970, are valid under the TRIPS agreement of the World Trade Organisation. India has resisted any change in its intellectual property laws that can have the effect of making medicines unaffordable.

Challenges we Face

Will of the pharmicists: There is the moral hazard that pharmacists will dispense the brand which offers them the biggest margin. The current diktat by the MCI therefore will not reduce prices for the consumer.

Brand names ensure quality: This belief is ill-founded. The recent quality survey by the government found 26 of 32 samples from a particular plant of a prominent multinational drug company to be not of standard quality (NSQ). The most effective way to maintain quality is to have periodic testing and stringent disincentives for poor quality. The best insurance for good quality is good regulation.

Bioavailability and Bioequivalence: Some argue that bioavailability and bioequivalence (BA and BE) of generics may not be equal to the original brand. Bioavailability refers to the rate and extent to which the active ingredient of the drug present becomes available at the site of action of the drug. In order for a new generic drug to be licensed, it has to be bioequivalent to the reference drug. It means that BA of the generic drug is similar to that of the reference drug. Of the approximately 800 useful drugs known to modern medicine, bioequivalence is really only important for a few drugs with low solubility and high or low permeability, so the debate about BA and BE is somewhat misinformed.

The Way Ahead

Self-certification: The government should require companies to self-certify their drugs to indicate whether they are in fact bioequivalent. A simple logo on the drug’s packaging to indicate whether a drug has been tested for proof of bioequivalence, along with the trial ID number listed on the Clinical Trials Registry India, should be made mandatory.

Awareness of the consumer: The challenge for the government is to balance its policy objectives of taking the power of the doctor away to prescribe brand name drugs with the reality that generic drugs in India are of questionable quality. The solution does not lie in more laws, but in providing more information to the consumer. Drug regulators in India have a vast trove of information on substandard drugs which they need to release into a searchable database. If this information is made available over the Internet, the government will truly empower hospital procurement officers, pharmacists and patients with information required to avoid products of manufacturers with a poor-quality record.

Go Digital: The government must seriously consider using IT tools to network all 36 drug regulators into one integrated national database. This can then be accessed by every citizen over a smartphone. The essence of the ‘Digital India’ initiative is to empower the citizen. What better way to do this than to provide them with information that will protect them from substandard drugs?


It is increasingly clear that the segment of the pharmaceutical market where we will see demand grow the fastest in the coming years is products that treat non-communicable diseases. We should, therefore, strive to promote strong, indigenous producers of complex generics and biosimilars as this has enormous potential to improve public health in emerging markets.

The core issues are affordable access to medicines and their rational prescription and use. These objectives require an enlarged list of essential and life-saving medicines under price control, elimination of all irrational FDCs, no brands for drugs off patent, and briefer officially approved names to make it easier for doctors to prescribe generics including the rational FDCs.

Must read: How are drug prices regulated?

Connecting the Dots:

  1. What are generic drugs? Why generic drugs are essential for a developing country like India?
  2. India is a very long way from realising its potential for bio-pharmaceutical innovation. Do you agree? Discuss.
  3. Is the ‘generics-only model’ a panacea for India’s disease burden? Are we willing to trade affordability for quality and safety? Examine.

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