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Apr 18, 2017 02:45 PM IST | Source: CNBC-TV18

Prescribing generic medicines may commoditise entire pharma industry: Experts

To break the nexus between pharmaceutical companies and doctors pushing expensive branded medicines, Prime Minister Narendra Modi yesterday, announced a major step. He said the government will soon put in place a legal framework to ensure doctors prescribe low-cost generic medicines to patients.

Kewal Handa, Former MD, Pfizer and Chaturya Aggarwal, Pharma Analyst at IDBI Capital discuss the impact of the above decision on the healthcare and pharma industry.

Handa says, for this to be a success the first thing government has to see is that the companies that will manufacture generic-generic drugs are aligned to global manufacturing practices. The quality will be a big issue and doctors may not have confidence in prescribing a generic-generic drug and may not take responsibility for the patients care, he says in an interview to CNBC-TV18.

Currently, India has three kinds of categories – patented products, branded-generic and generic-generic drugs/medicines.

“The biggest challenge is we will be moving from the doctor’s controlled to hands of retailers (e-commerce), which will be a big risk,” says Handa.

According to him, the risk of this shift in control to retailers would mean that they would push only those products that give higher margins and not quality products necessarily and this could over longer period of time reduce prices.

The drugs will be sold as commodities, says Handa, adding that this will commoditise the entire pharma industry, which would be unfair.

The cost of manufacturing a branded-generic and generic-generic drug may be the same for manufacturer unless it is manufactured in an USFDA approved plant compared to maybe a plant that has been locally approved, says  Handa. The government should instead look at universal health policy, he said.

Chaturya Aggarwal says shifting the business from branded-generic to generic-generic will take a long time to happen.

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