Generics prescription law - Financial cure for patients

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The private sector is the main healthcare provider in India because government expenditure on health as a percentage of GDP  is very low - about 4% of Gross Domestic Product or US$61 per person per year.

Most healthcare expenses are paid out of pocket by patients and their families, rather than through insurance. This has led many households to incur Catastrophic Health Expenditure (CHE) which is defined as health expenditure that threats a household's capacity to maintain a basic standard of living.

India’s expenditure on health published by The Lancet showed that two-thirds of our entire average spending is on drugs that we purchase as prescribed by the doctor due to lack of awareness on the availability of affordable alternatives to expensive brands. It is therefore, important that governments act on multiple fronts like:

  • Eliminate prescription of irrational, non-essential drugs that have no curative effect.
  • Making essential medicines available free or nearly free to all through higher public spending.
  • Widening access to generics through Jan Aushadhi outlets.

The Union government is considering the introduction of a law to make it mandatory for doctors to prescribe generic drugs so that patients can access affordable medicines provided through state-run Jan Aushadhi stores.

Generally what happens is that doctors don’t prescribe generic medicines supplied through Jan Aushadi stores, so patients find it tough to ask for the correct generic equivalents but the law will ensure that doctors prescribe generic drugs or include a clause ‘or equivalent generic drug,’ when they prescribe a branded drug.

Prescriptions should be issued for drugs specifying only the chemical name, rather than a manufacturer's name/ brand name because such a prescription can be filled with a drug of any brand meeting the specification.

Generics Drug

A generic drug is a drug product that is identical to the brand-name counterpart with respect to dosage form, strength, quality and performance characteristics, and intended use. 

Generic drugs are labeled with the name of the manufacturer and the adopted name of the drug. A generic drug must contain the same active ingredients as the original formulation.

The prices of Generics Medicines are low enough so that everyone can afford them. Some countries import Generics drugs from other countries so that every single citizen can afford those life saving drugs. 

Economics behind Generics Medicine

When generic products become available for significantly lower prices than their branded equivalents it often leads to competition among producers as drugs are no longer are protected by patents.

The companies that manufacture Generics Medicines  incur fewer costs in creating generic drugs as they do not spend on development, testing and  advertisment and are therefore able to maintain profitability at a lower price.

The companies that own the patent rights of the particular drug enjoys monopoly and maximizes profitability. The profit often greatly exceeds the development and production costs of the drug but generic drugs introduces competition and prevents any single company from dictating the overall market price of the drug.


How to build trust toward generic drugs ?

Three years ago well renowned brand Ranbaxy was accused by the US Government  for adulteration of its products and failure to meet standard manufacturing practices which highlights that close monitoring and strict regulation is very essential for maintaing the quality of the drugs.

Only with a guarantee of efficacy can the plan for mandatory prescription of generics succeed. Government should proactively help all manufacturers public and private to meet the internationally recognised Good Manufacturing Practice standards.

Scaling up the number of Jan Aushadhi outlets quickly as by 2014-15, just 99 Jan Aushadhi stores had opened in 16 States, and there are 283 stores in 22 States and Union Territories at present. 


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