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India shows the way to affordable medicines

Generic drugs beat the profit merchants

  • Ivan Fernandes, Hyderabad
  • India
  • January 16, 2014
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Sickness is part of life and medicines are required to make one healthy. Yet medicines are perhaps one of the most contentious issues on our list of essentials.

They have to be formulated, manufactured and distributed - and that requires money. Those investing in the process need to recoup their outlay and make a profit. That is the incentive and the underlying basis of intellectual property protection to guarantee innovation.

The answer to one contentious issue concerning profit, innovation and essential affordable medicines lies in generic drugs. 

India may have bypassed international law to allow the manufacturing and selling of generic drugs but it has shown that profit margins take a backseat when it comes to guaranteeing people access to affordable medicines to stay healthy.

A relative of mine required close to US$20,000 for just one course of brand name cancer medicines, a cost unaffordable for even a middle class Indian.

If it wasn’t for India's Supreme Court recently denying a European multinational sole rights to the cancer medicine used in over 40 countries and allowing it to be generically available today, she probably wouldn’t be alive. 

On the other hand, a friend died from diabetes-related liver complications because the family could not put together hard cash for a costly series of branded injections still unavailable in an affordable generic form.

Today, the Indian pharmaceutical industry, the third largest in the world in terms of volume, is estimated at about 720 billion rupees ($11.6 billion) and produces about one-fifth of the world’s generic drugs. India, for example, produces 86 percent of the HIV generic drugs keeping people alive around the world.

Patented drugs would cost a patient more than US$10,000 a year, impossible for millions of poor people in Asia and Africa to afford. Thanks to cheap HIV generics from India, the cost is a more affordable US$100.

This has come after strenuous and often lengthy litigation from the original manufacturers, some of them still in the process of legal arbitration for drugs to treat hepatitis and specific cancers. Many pharmaceutical companies are not always willing to let others manufacture their patented drugs cheaply without a fight.

The Indian Supreme Court has had to intervene in many instances and has mandated since Christmas Day that drug manufacturers adhere to the government’s National Pharmaceutical Pricing Authority directive brought out in May.

The court had dismissed appeals by pharmaceutical companies thereby allowing patients to get medicines at a government-set ceiling arrived at by taking the average prices of all brands of a drug with a market share of 1 percent or more.

Now, more than 620 formulations of 348 essential drugs on the pricing authority’s list will be sold at much cheaper rates.

Drugs such as Amoxicillin, a penicillin-type antibiotic used to treat bacterial infection, costs 47 rupees instead of 88 rupees. A rabies vaccine is affordable at 40 rupees instead of 370 rupees.

The court’s decision has far reaching consequences for millions of India’s poor who can now have access to basic medicines at affordable prices. It will also enable the Indian government to go ahead with plans to distribute hundreds of primary drugs in its state-run health facilities for free.

These generic medicines will help the poor who suffer needless ill health only because they are unable to afford drugs.

In India, the cost of medicine is the second biggest cause of debt especially in rural areas where 70 percent of the country’s 1.2 billion people live.

According to India’s Planning Commission, the cost of medicine accounts for 80 percent of total treatment expenditure. Moreover, since up to 80 percent of hospital care occurs in private hospitals and clinics, Indians are forced to buy brand name drugs they can hardly afford.

However, despite government and court advisories, many doctors find it difficult to prescribe generic medicines. And it’s not all because they have succumbed to aggressive campaigning by pharmaceutical companies. Chemical formulations and drug names are so diverse and numerous doctors struggle to remember their names and what they are for.

“It’s not as easy as just prescribing Paracetamol,” one doctor said.

There will also be a few manufacturers that give the entire generic drug industry a bad name by manufacturing spurious medicines. This calls for better quality control and for both national and international drug regulators to work together to make sure people are buying generic medications that are safe.

Quality generic medicines have the same effect and potency as expensive brand name drugs, but because they lack the monopoly the patented manufacturers have, are sold by others at cheaper prices.

According to the World Health Organization, a generic drug is a pharmaceutical product that is manufactured without a license from the innovator company and will maintain the same quality standards, strength, dosages and intended use as their patented equivalent. 

Unfortunately it is often the poor where education and literacy is largely lacking who succumb to the flawed logic that just because a medicine is expensive it is more potent and will often shun cheaper generic versions.

The Indian government besides enacting laws must also inculcate people with a confidence in generic drugs.

Ivan Fernandes is a journalist and commentator based in Hyderabad.

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