In April 2017, the Medical Council of India made it mandatory for physicians, healthcare providers to prescribe and dispense drugs carrying generic names. The move to replace branded medicines with generic substitutes was deemed necessary by Indian health authorities, in lowering the overall out-of-pocket expenses incurred by households for basic healthcare needs.

The implementation of mandatory prescription of generic medicines somehow alleviated the distrust of households over the quality of generic medications. Generally, Hindustan households perceived the generic brands as poor quality imitations of the proprietary medicines produced by pharmaceutical companies.

A study performed by the Journal of Drug Delivery and Therapeutics revealed that 92% of India’s adult population know of generic drugs, of which 92.70% comprehend the distinctions that set apart the branded from the generic medicines. However about 47.8% of those who know what generic brands are, prefer to believe in proprietary pharma-branded drugs.

Yet a survey conducted by the National Sample Survey Office (NSSO) in 2014, revealed that of the majority of Indian households, 82% in urban areas and 86% in rural locations have no support to alleviate their health expenditures.

Government studies showed that lowering the cost of medicines will prevent several households from going into medical poverty. Although many practicing physicians in India were not confident in the efficacy of generic drugs, 62% of healthcare providers in the country supported the mandatory implementation of generic drug prescriptions in all sectors across India. Those who do not comply with the mandate stand to lose their license as medical practitioners.

Understanding the Real Nature of Generic Medicines

Generic drugs started out as proprietary medicines that earned the manufacturers a patent to name the medicine by a specific brand. However, after a period of ten years, the patent held by the pharma company expires. Unless the patent is renewed, the pharma company cannot market the medicine using the patented brand.

An expired patent affects only the right to use the brand name but not the exclusive right to manufacture, distribute and sell the medicine under a generic name; usually using a name based on its salt component.

The FDA allows the sale of the generic brand as long as it’s sold for a lower cost and has different color, size and packaging. What is important is that the generic and the original brand are bio-equivalent; having the same formulation and using the same ingredients whilst using the same manufacturing method in their productions. That is why generic drugs must be available in the same dosages as the original branded medicine. .

Regulation of Generic Drug Distribution and Sale via the PCD Franchise System

Inasmuch as India is a leading manufacturer and supplier of generic medicines in the global pharmaceutical market, the government ensures that the sale of generic drugs in the local market will be maintained at the lowest possible cost.

Through a system called Propaganda Cum Distribution (PCD) system, operators of generic drug stores can buy generic medicines at low prices by using the services of PCD pharma franchise companies. Moreover, generic drugstore operators who hold PCD franchise agreements with a PCD franchise company will have a monopoly in the sale of specific generic medicines included in the franchise agreement and in a particular geographical location.

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