Corporate hospitals prescribe generics to rein in costs

When Anirbhan Banerjee (name changed), a 54 year old banker, visited a corporate hospital at Airport Road in Bangalore for a check up, he was prescribed amlodipine for hypertension.

The cardiologist gave Banerjee the choice between two brands—one by a well-known Indian manufacturer costing Rs 21 for a strip of 10 tablets of 5 mg each, and another by a US based multinational firm costing Rs 77 for the same.

The cardiologist explained that both the brands are equally good, and the patient can make the final choice, and Banerjee went for the less expensive one.

In a move to rein in growing healthcare costs, several corporate hospitals in the country are encouraging patients like Banerjee to go for low-cost generics against expensive innovator drugs.

Medicines manufactured by Indian drugmakers are copies of off-patent drugs (and are called generics), which are 30-40% cheaper than the innovator drugs of MNCs.

Medicines constitute 40-50% of the total healthcare expenditure.
However, the pricing differential between various brands of the same drug exists not only between an Indian and an MNC drugmaker, but also between two Indian companies on account of the various marketing costs that go into brand promotion.

For example, two brands of antibiotic ciprofloxacin from two reputed Indian drugmakers, both of which are not the inventors of the drug, cost Rs 39 and Rs 98 respectively for a strip of 10 tablets of 500 mg due to promotional expenses.

On the other hand, a strip of 10 tablets of 300 mg of epilepsy drug gabapentin from an Ahmedabad based company costs Rs 98, but the brand from the US based company which invented the drug sells at Rs 313 a strip.

Patients are being made aware of different brands of the same medicine, and usually most patients are on less expensive drugs, says Ajai Kumar, chairman and CEO of HCG Hospitals in Bangalore.

KM Singh, head of department, internal medicine, at Fortis La Femne, New Delhi, says, “When cheaper good-quality alternatives are available, why not use them. Though in critical cases, like those in the intensive care units, etc, we go by innovator brands, when it comes to other medications like antibiotics, painkillers etc, less costly brands are preferred.”

Milind Inamdar, group head, purchasing, at the Narayana Hrudayalaya Hospital, Bangalore,  says, “Even in the out-patient department (OPD), we encourage usage of less expensive drugs, as most patients are from middle class backgrounds, he says.
Dayanandan C, chief manager, pharmacy, Manipal Hospital in Bangalore, which sees 800-1000 out patients any given day, says, “About 40-50% of our drugs are purchased directly from the
manufacturers.”