Academic journal article Indian Journal of Psychiatry

Prescription Writing: Generic or Brand?

Academic journal article Indian Journal of Psychiatry

Prescription Writing: Generic or Brand?

Article excerpt

Byline: Chittaranjan. Andrade, T. Rao

The high cost of some medicines in India has made the treatment of many common and uncommon diseases unaffordable to the poor and a strain on the budgets of even middle-class citizens. For patients who suffer from diabetes or cardiovascular disease, and who may need certain medicines for months or even the rest of their lives, newer antidiabetic, anticoagulant, and other medicines may cost more than Rs. 100 a day, each; and for those diagnosed with multiple sclerosis, the cost of disease-modifying treatments (DMTs) may range from Rs. 30,000 to Rs. 100,000 a month, depending on the DMT. Clearly, the cost of some medicines, especially to poorer patients and those who require long-term or lifelong treatment, is a matter of concern.

Policymakers react to problems such as this in ways that are not always well thought out. As a simple example, the annual ritual of waiving farm loans is not a solution to the problem of farmer suicide.[sup][1] Likewise, the encouragement of electricity-powered vehicles with a view to promote the use of renewable forms of energy does not take into consideration the many disadvantages that users face.[sup][2]

Earlier this year, there were media reports that suggested that the Prime Minister was considering legal steps to make it compulsory for doctors to prescribe medicines by generic names rather than by brand names;[sup][3],[4],[5] the reason, ostensibly, was that pharmaceutical companies were pricing their products beyond affordable limits. Here, it must be recognized that pharmaceutical companies are not charitable organizations; like all businesses, they exist to generate profits for their shareholders. Therefore, a reasonable margin of profit cannot be grudged, and a broader margin of profit on some drugs could be necessary to offset a narrow margin of profit on other drugs, or even a loss made on other drugs, where the other drugs are for niche indications, or are under price control. Readers may note that the margin of profit is not the difference between the cost of manufacturing and sales price; many direct and indirect costs need to be factored in [Box 1].[INLINE:1]

Medicines: Cost to Consumer

In this context, Singal et al .[sup][6] described an interesting study. These authors compared branded and nominally branded generic versions of the same drug manufactured and formulated by the same company [see the next section and [Box 2] for definitions of terms]. The drugs selected were cetirizine, fluoxetine, ciprofloxacin, lansoprazole, and alprazolam. At the retailer level, the mark-up for branded generics in terms of retailer purchase price versus maximum retail price (MRP) was 25%–30%; for the nominally branded generics, this mark-up was far higher at 201%–1016%, giving the retailer (but not the company) an enormous margin of profit. The MRP of branded generics was 0%–41% higher than that of the nominally branded generics. To the extent that the drugs were tested, branded and nominally branded versions met regulatory standards for drug content. However, no testing for impurities was performed.[INLINE:2]

There are several observations that stand out from the results of this study:[sup][6]

*For nominally branded generics, retailers make large profits. However, this may be necessitated by a lower turnover rate; and it may be inevitable, because retailers also have indirect costs, such as those listed in [Box 1], and will need larger margins of profit on some products to offset lower margins of profit on others *For branded generics, pharmaceutical companies make large profits. However, this may not be so if the manufacturing, quality control, and related costs differ between branded and nominally branded generics. Such a scenario could well be possible, for example if branded generics are of export quality, meeting international regulatory standards, whereas nominally branded generics meet only the domestic regulatory standards *Branded and nominally branded drugs are similar in content of the active pharmaceutical ingredient *It is unknown whether branded and nominally branded generics differ in matters related to quality control, such as the presence of impurities. …

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