NPPA wants generics branding out

The National Pharmaceutical Pricing Authority (NPPA) is looking at a regulation that will force firms to sell drugs by their generic names and not brand names. This, the regulator believes, will help consumers buy medicines cheaper.

For example, paracetamol or acetaminophen is the generic or pharmaceutical name of a medicine popped very commonly to reduce fever and pain.Hundreds of drug makers sell paracetamol under their own brand names — such as Crocin, Calpol and Metacin.

They sell these at different price points with little difference in efficacy.Another example is doxophylline, the medicine used to treat for asthma and chronic obstructive pulmonary disorder or COPD.

A strip of 10 tablets of 400 mg doxophylline made by Dr Reddy’s Laboratories, which the company calls Doxobid, costs Rs 83, while Mumbai-based Macleods Pharma’s version, called Doxoril, sells for Rs 43.

C M Gulhati, editor of the Monthly Index of Medical Specialties, a reference guide for medical practitioners, said the question of quality and efficacy does not arise for brands from India’s top 50 drug makers.

“But companies follow whimsical pricing depending on their marketing and promotional costs,” he said. Drug makers spend an average 5-6% of their revenues on promotions.
Ranjit Kapadia, vice president, institutional research at HDFC Securities, said the Indian pharmaceutical market is currently dominated by brands that have been created by spending crores of rupees.

“For NPPA’s move to happen at all, the push has to come from all parties in the equation, including the drug makers and doctors,” he said.

A senior industry executive said companies will most likely resist the move as the equity they have created for their drugs will be “simply obliterated”.

Bhavin Shah, pharma analyst at broking house Dolat Capital Market, said if drugs were to be prescribed and sold by their generic names, there would be seismic shifts in market shares.

A senior official in NPPA told DNA the authority is planning to work with the health ministry to push the matter through state governments. It would also be consulting MK Azhagiri, the minister of chemicals & fertilizers, on the issue.

According to a trustee at LOCOST, a Vadodara-based NGO working in the area of medicines, any effort to make mandatory prescription of drugs by their generic names should come from the ministry of health rather than the NPPA, which is under the department of pharmaceuticals, in the ministry of chemicals and fertilisers.

A generic name is usually given to describe the ingredient (in pharma parlance, it’s called the “active pharmaceutical ingredient or API) in the medicine, but all drug firms give their medicines brand names in order to differentiate and profit.

NPPA also plans to force pharmaceutical firms to display the generic name of the drugs prominently, which would nullify attempts at aggressive branding.

The ministry of chemicals & fertilisers, if it concurs with NPPA, is expected to ask doctors in all government medical colleges, hospitals, primary health centres and other health dispensaries to prescribe drugs by their generic names instead of branded ones.
However, doctors could also resist such a move, says the industry executive. “They will lose favour with pharma companies,” he said.

It’ll also mean power shifting from doctors to chemists, says a general practitioner based in Bangalore.

“If doctors are told to write drugs by their generic names, the chemist will dispense that company’s product which gets him the maximum benefit. Chemists get more than 20-30% margins on some drugs,” the doctor said.

The finalisation of the new pharmaceutical policy, which has been in the works for over seven years now, is expected sometime this year and may include new rules on generics and branding, sources said.