Pharma quality is the key for competition

Live mint, July 16, 2018

By Ujjwal Kumar

The pharmaceutical market is an “imperfect market” where prescribers, and not end-consumers, are the decision makers. Therefore, despite the presence of many drug manufacturers in India—which is a pro-competition condition—real competition may not happen as it does in other products. Here, the mere availability of many substitutes is not sufficient for competition. To engender competition, the strategy would need to revolve around the prescription pattern. When it comes to health, the life of patients is at stake. Therefore, the policy focus must shift from the mere reduction of prices to ensuring quality and safe medicines. This is because real competition in the pharmaceuticals market depends on the quality assurance of substitutable products.

Prescriptions in India, for the most part, use brand names and not generic names, which could act as a hurdle to real competition. Why, then, do doctors not prescribe the generic names? Interactions with doctors reveal the real reason—their suspicion about the quality of most generic drugs.

In this context, the recent drive to get doctors to mandatorily prescribe using generic names seems a myopic approach that ignores the ground reality. Is India ready for such a scenario? The world over, healthcare decisions are driven by health outcomes that are based on epidemiological, clinical and health economics-driven data points. Therefore, healthcare decisions should carefully consider aspects of cost-effectiveness and patient safety.

In the given scenario, and until we have a robust quality-control regime, prescription of branded generics need not be frowned upon. Over the years, medicines manufactured and marketed under brands have earned the trust of physicians; for the most part, they maintain the same quality and efficacy as the patented drug. Most doctors would not like to risk their own brands by adhering to a “generic only approach”. We must reward quality excellence and penalize poor quality.

Furthermore, the decision to choose the generic version cannot be left to the whims of pharmacies. It must be noted, if doctors are made to prescribe only generics, pharmacy stores become the main decision makers. This affects the prescribing doctors’ confidence regarding the quality of the drug’s version sold to the patients—the ultimate consumer. The associated potential harm to their patients from substandard drugs could be irreparable. From the competition policy perspective, quality of all drugs, at the time of approval and beyond, must be ensured so that physicians are confident about their efficacy and safety.

Considering this, the April 2017 amendment to the provisions of the Drug and Cosmetics Rules, which require mandatory bio-equivalency testing for certain classes of generic drugs at the time of obtaining marketing approval, is a welcome step. Prior to this, the generic applicant was not even required to submit data to prove whether it was equivalent to the original/new drug if such approval was sought after the expiry of four years of the approval to the new drug. It is to be hoped that this requirement would steadily be extended to the remaining classes of drugs. How can a generic drug get marketing approval without even establishing that it is equivalent to the original drug? This should be the basic regulatory requirement that all drugs go through.

The government, reportedly, is also considering the introduction of penal provisions (including imprisonment) for companies manufacturing and/or marketing drugs that are found to be substandard. Similarly, there are also efforts underway to digitally track the movement of drugs from factories to pharmacies. Such moves would, hopefully, pressure drug companies and distributors to enhance their quality control measures.

There are other concerns vis-à-vis quality regulation that need to be addressed, including the definition of quality, adequate drug-testing facilities, adequate number of trained staff, post-market monitoring, drug alert and drug-recall mechanism.

Similarly, firm-level quality control needs tremendous improvement. A 2017 Federation of Indian Chambers of Commerce and Industry study has vividly culled out requirements to ensure quality at the firm level, which includes strengthening management systems to manage quality, embedding quality into product design, building a culture of quality across the organization, and expanding and upskilling the quality and operations talent pool. The onus is on the industry to implement its recommendations.

These all are preconditions for the “generic-only approach” to succeed. Else, it may end up doing more harm (in terms of health) to consumers than benefiting (in terms of price) them. Lessons could also be learnt from several recalls of medicines from Jan Aushadhi stores in the recent past and increased issuance of warning letters from the US Food and Drug Administration to Indian pharmaceutical manufacturing sites that have increased significantly.

The quality of the healthcare ecosystem, and especially the pharmaceutical market, is one issue where there can be no gambling. This is more pertinent when the country is betting big on greater innovation, accessibility and affordability in healthcare. Moreover, continued healthcare innovation is dependent on a sustainable environment, that recognizes and rewards quality. After all, quality is what the government, pharmaceutical firms and healthcare professionals are all striving for.

Ujjwal Kumar is a policy analyst at CUTS International.

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