Home / Opinion / Views /  Indian generic makers need to crash drug prices at home too
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As another major drug, Azmarda from Novartis, goes off patent, a number of Indian pharma firms are launching versions of it at reduced prices. The cardiac drug, developed as Entresto by the Swiss company and approved by the US Food and Drug Administration in 2015, has dominated its segment of the market despite its steep 40 per tablet price. Now JB Pharma, which acquired its Indian marketing rights from Novartis earlier this year, is slashing the price by half, in an effort to grab a share of the burgeoning market. Others like Natco, Cipla, Torrent, Lupin and Sun Pharma will also join the fray with similarly priced versions.

While the drop in price is welcome, it still raises the question of why a drug that's gone off patent should still cost 50 percent of the innovator's price in India. Even at 20 each, the drug will remain unaffordable for the majority of patients in the country suffering from cardiovascular diseases which, according to the Global Burden of Disease, now account for nearly a quarter (24.8 per cent) of all deaths in the country.

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Indeed, the steep pricing of generics may be the one factor holding back their penetration in India. What’s galling is that the dominance of Indian generics in markets like the US and UK has been driven by crashing prices the moment a drug came off its protected period. Take Celebrex 200 mg, a brand name drug given for arthritis, which costs $391 per month in the US while its generic or non-prescription version Celecoxib is priced at $10 to $20. 

Or take Imitrex, another brand name drug, given for relief from migraine, which costs $615-650 for nine tablets. Its generic version, Sumatriptan, made by several Indian companies including Lupin, Dr Reddy's and Aurobindo Pharma, by contrast, sells for between $10 and $30 for nine tablets. Significantly, in India the same medicine, Rizact 10 made by Cipla, costs nearly a dollar each, almost the same price as in the US.

With unbranded generic medicines not being prescribed by doctors on grounds of a lack of trust and the perception that they are less effective, the Indian market is dominated by branded high-priced generics, an oxymoron. 

India is one of the largest suppliers of generic drugs in the international market. Yet, at home, one in three drugs prescribed by doctors is still these branded and exorbitantly priced versions. Indeed, the more critical the need, the higher the prevalence of branded drugs. That contrasts sharply with the US where, according to FDA's 2021 annual report, 90 percent — 9 out of 10 — of all prescriptions dispensed are for much cheaper, generic drugs.

For long, Big Pharma has argued that the high cost of branded drugs is justified by the enormous investments in research and development, as well as the high failure rate of under-trial drugs at various stages of trials. Governments across the world have tended to accept the trade-off giving companies a certain secure period to sell their latest molecules at prices which can allow them to amortize such costs. As a result, margins on branded drugs range from 200 to 2,000 percent reflecting in the balance sheets of their developers. In 2021, for instance, gross margins at major pharma companies ranged from 75.9 percent at Gilead Sciences, to 69.3 percent at Novartis. 

That logic, however, cannot apply to generics where companies don’t have to incur any such costs.

Over the years, successive governments in India have tried to make quality generic medicines more affordable. In 2008, the Jan Aushadhi scheme was launched which was then revamped and rebranded as Pradhan Mantri Bhartiya Jan Aushadhi Pariyojana (PMBJP) in 2015. The scheme hasn’t been very successful. A research paper titled “Improving access to medicines by popularising generics: a study of ‘India’s People’s Medicine’ scheme in two districts of Maharashtra" authored by Sonam Lavtepatil and Soumitra Ghosh, found that while unbranded generics offer great opportunities for substantial cost savings, they need further policy actions to realise their full potential. These include the need to ensure that the Bureau of Pharma Public Sector Undertakings of India (BPPI) procures only those drugs that pass the bioequivalence test as well as pushing for compulsory de-branding of generics.

If Indian pharma companies, now facing intense competition as well as scrutiny in global markets, want to develop the vast domestic market, they need to reconsider their pricing strategy as well as ensure quality. In India bioequivalence studies were not compulsory till 2017 and even after that biowaivers have allowed major exceptions which runs the danger of insufficient quantities of the drug reaching the bloodstream to be of therapeutic value. 

Such anomalies as well as steep prices are a disservice to patients in a country dubbed the pharmacy capital of the world.

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