New Delhi: According to Ashok Kumar Gupta, Chairman of the Competition Commission of India (CCI), consumer perception of variation in efficacy is driving a brand war in the pharmaceutical retail market, diluting the chilling effect on the prices of drugs sold under their chemical or generic names.
Gupta highlighted the role that generic drugs can play in creating the competitive pressures needed to lower prescription drug prices, reduce health care costs and improve access. However, Indian consumers are ostensibly paying a premium for brands, Gupta said at a CCI-hosted workshop on Friday on competition issues in the pharmaceutical sector. His comments were based on an interim market study conducted by the regulator.
The pharmaceutical market is different from other markets as consumers often do not deviate from the brand prescribed by the doctor or opt for the same drug sold under its chemical name. This distorts competition in the market. Also, drug manufacturers market their products through physicians rather than directly to consumers.
In India, generic drugs promoted by companies under their brand names are called branded generics and those sold under their chemical name are called “generic generics”, although both categories are off-patent drugs.
On this issue of the prevalence of branded generics in the pharmaceutical retail market in India, Gupta highlighted the key role that quality expectations and the perception of efficacy variation between drugs play in fueling brand competition. and dilute the generic price reduction effect in India. India, said an official statement after the workshop. Apart from the quality aspect, he alluded to the important role that Janaushadhi and the emerging private generic retail chains in the country can play in increasing the availability and improving the uptake of generic generics, says the statement quoting Gupta.
Vinod K. Paul, member of NITI Aayog, who spoke on the occasion, said that access to medicines without financial hardship and quality assurance were essential for universal health coverage.
Considering that expenditure on drugs accounts for 70% of out-of-pocket healthcare expenditure in India, he stressed the importance of improving accessibility of drugs, according to the statement.
Paul pointed out that streamlining the commercial margins of 42 cancer drugs on a pilot basis in 2019 led to cost savings of ₹984 crores for over 500 brands across 42 formulations. Paul further cited instances where margin rationalization resulted in a 90% price reduction on certain drugs, according to the release.
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