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LITERATURE REVIEW

2. INTRODUCTION TO PHARMACEUTICAL INDUSTRY

2.1 Global Pharmaceutical Industry:-

“The Global Pharmaceutical Industry is one of the multinational industries which gained a
high cycle of growth especially in 1960s and the industry is in high risk, regulated and driven by
lengthy R&D expenditures. The industry can be different in medicinal chemical, biological,
ethical, proprietary product and private formula manufactures by their backgrounds and
operation sectors and does not cover consumer or animal healthcare. In 2018 total revenue of
global pharmaceutical industry was $1,226.0 billion and expected to reach $2,022 billion at the
end of 2022. United States, Europe and Japan are the largest pharmaceutical market.”[1] The
report critically analyse the Global Pharmaceutical Industry, importance and growth with the
expect of internal and external environment analysis, plausible views of industry in the future
and moral values.

Table No. 2.1:- Top 10 Global players

Sr. No. Company 2018 ($m) 2019 ($m) Growth ($m) Growth (%)

1 Pfizer 47878 51214 -3336 -7


2 Novartis 47468 46732 736 2
3 Roche 39163 38006 1156 3
4 Merck & Co. 37437 40601 -3164 -8
5 Sanofi 37124 39511 -2387 -6
6 GlaxoSmithKline 33330 33335 -5 0
7 Johnson & Johnson 28125 25351 2774 10
8 AstraZeneca 25711 27925 -2214 -9
9 Lilly 20962 20567 395 2
10 AbbVie 18790 18380 410 2
Source - http://www.pmlive.com/top_pharma_list/global_revenue

[1]- http://www.ukessays.com/essays/international-business/global-pharmaceutical-industry.php
“Market research firm Evaluate Pharma, in its annual World Preview report, projects a global
growth rate for the pharma industry of 6.3% CAGR through 2022, up from the 5% CAGR it
predicted last year for the 2014-2020 period.

Nevertheless, for investors, the “spectacular four-year bull run” of pharma and biotech valuations
during 2011-2015 might be coming to an end, with uncertainties over Brexit and the US
presidential election, in an atmosphere of rising skepticism over the worth of pharma products at
ever-escalating prices[3].

The overall $1.12 trillion market in 2022, says Evaluate, will rise at a faster clip during 2016-
2020, then slow down a bit as major patent expirations take hold. (Evaluate says that the global
market actually declined by 1.0% in 2015, but will grow by 4.8% this year. Prescription sales
excluding generics will rise 4.4% this year, and will reach $1.006 trillion in 2022. Generics sales
will increase from $73 billion in 2015 to $115 billion in 2022, and constitute 10.2% of
prescription sales at that point (only 0.3 percentage points more than it is now)” [3]..

Among global companies, Roche could overtake Novartis by the slimmest of margins by 2022,
with sales of $52.6 billion versus $52.5 billion. Pfizer will drop to No. 3, with sales of $49.1
billion (this analysis preceded that company’s bid to acquire Medivation.

[3] - https://pharmaceuticalcommerce.com/business-and-finance/global-pharma-market-will-reach-1-12-
trillion-2022/
“During the 2008-2015 period, the compound annual growth rate of global R&D spending was
1.7%; during the 2016-2022 period, the rate will grow at 2.8%. The year-over-year increase,
however, will remain around 3%, versus some dramatic jumps seen in 2013, 2014 and 2015.
Overall spending will reach $182 billion in 2022. Top spenders in 2015 were Roche and Novartis
($8.5 billion each in 2015), Pfizer ($7.7 billion), J&J ($6.8 billion), Merck ($6.6 billion), and
Sanofi and AstraZeneca ($5.6 billion each). However, in 2022, J&J will overtake Pfizer, and
Sanofi will overtake Merck[4]..

By 2022, the biggest-selling global branded drug will be Opdivo (nivolumab) from BMS and
Ono Pharma, with sales projected to go from $1.119 billion in 2015 to $14,634 billion, and
overtaking the current No. 1 drug, AbbVie’s and Eisai’s Humira (adalimumab), currently at
$14.359 billion and dropping slightly to $13.645 billion in 2022. However, among the Top 50
drugs in the market currently, the largest growth will be seen by J&J’s Darzalex (daratumumab),
an anti-CD38 antibody for multiple myeloma, projected to rise from $9 million now to $4.9
billion by 2022, a 146% growth[4].

2 Indian pharmaceutical industry

The Indian pharmaceutical industry currently tops the chart amongst India's science-
based industries with wide ranging capabilities in the complex field of drug manufacture and
technology. A highly organized sector, the Indian pharmaceutical industry is estimated to be
worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high amongst all the
third world countries, in terms of technology, quality and the vast range of medicines that are
manufactured. It ranges from simple headache pills to sophisticated antibiotics and complex
cardiac compounds; almost every type of medicine is now made in the Indian pharmaceutical
industry. Indian pharmaceutical industry has been witnessing significant growth over past few
years. The size of the Indian pharmaceutical market increased from USD 6 Billion in 2005 to
USD 18 Billion in 2018 by 2022, India‘s pharmaceuticals market is expected to reach US$45

billion and become the sixth largest pharmaceutical market in the world.”[4]

[4] - The Indian Pharmaceutical Industry Business, Legal & Tax Issues, April 2018.

[4] -https://pharmaceuticalcommerce.com/business-and-finance/global-pharma-market-will-reach-1-12-
trillion-2022/
“The Indian pharmaceutical sector is highly fragmented with more than 20,000 registered
units. It has expanded drastically in the last two decades. The Pharmaceutical and Chemical
industry in India is an extremely fragmented market with severe price competition and
government price control. The Pharmaceutical industry in India meets around 70% of the
country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals,

tablets, capsules, orals, and injectibles.”[4] “There are approximately 250 large units and about

8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5
Central Public Sector Units).

―They (sales) are expected to rise to $23.6 billion in 2019 and reach $27.0 billion in 2020. As a
percentage of health care expenditures, pharmaceutical sales were 22.6 per cent in 2018; they are

expected to reach 23.6 per cent in 2020 and 27 per cent by 2022.”[5]

Financial Performance of the Drugs and Pharmaceuticals Industry

The Annual Turnover of the Indian Pharmaceutical Industry is estimated to be about Rs.
2197551 Crores during the year 2016-17. The share of export of Bulk Drugs, Drug Intermediates
and Drug Formulations, Biologicals is Rs. 1076182 Crores for the year 2016-17.This segment of
Industry has shown tremendous progress in terms of infrastructure development, technology base
and wide range of products[5]. The industry has developed excellent GMP (Good Manufacturing
Practices) compliant facilities for the production of different dosage forms.

The strength of the industry is in developing cost effective technologies in the shortest possible
time for drug intermediates and bulk activities without compromising on quality. This is realized
through the country’s strengths in Organic Chemical Synthesis and Process Engineering. The
domestic Pharma Industry has recently achieved some historic milestones through a leadership
position and global presence as a world class cost effective generic drugs manufacturer for
lifesaving drugs used for life threatening diseases for eg. AIDS, cancer etc.

[4] - The Indian Pharmaceutical Industry Business, Legal & Tax Issues, April 2018.

[5]-https://pharmaceuticalcommerce.com/business-and-finance/global-pharma-market-will-reach-1-12-
“Along with Brazil & China, India has carved a niche for itself by being a top generic Pharma
player. Many Indian companies are co-partnering with foreign voluntary organizations for
making available cheap generic drugs to lesser developed countries like Mozambique, Rwanda,
South Africa and Tanzania which have about 33% of all people living with AIDS in Africa. USA
is also sourcing anti-Retroviral drugs from Indian Companies which are approved by USFDA,
under many schemes.[6]
This is because the Indian Pharmaceutical companies maintain highest standards in purity,
stability and safety, health and environmental Protection. Top Indian Pharma companies have got
various international regulatory approvals for their plants, from agencies like USFDA, MHRA-
UK, TGA-Australia, MCC-South Africa etc. Outside USA, India has the highest number of
USFDA approved plants for generic drugs manufacture. Major share of Indian Pharma exports is
sourced to developed western countries especially USA”[6].

[6]- http://www.vccircle.com/news/pharmaceuticals/2018/02/17/india%E2%80%99s-pharma-sales-reach-
27b-2018-deloitte-report
“The country‘s Pharma industry accounts for about 1.4 per cent of the global Pharma industry in
value terms and 10 per cent in volume terms. Both domestic and export-led demand contributed
towards the robust performance of the sector”[7]. An increase in insurance coverage, an ageing
population, rising income, greater awareness of personal health and hygiene, easy access to high-
quality healthcare facilities and favourable government initiatives are some of the important
factors expected to drive the Pharma industry in India. The Government of India has unveiled
‗Pharma Vision 2022‘ aimed at making India a global leader in end-to-end drug manufacturing.

Demand for Healthcare Infrastructure

(a) Currently, the healthcare delivery system has an acute shortage of availability of
hospital infrastructure. India has an estimated 1.1 beds per 1,000 people, which is well behind
the 3.5 beds per 1000 people recommended by the WHO. The Indian healthcare system needs
additional 3.6 mn beds in the country to reach the recommended capacity.
(b) In July 2015, Government of India has announced a plan of having a medical college
in every district. Additionally, five new AIIMS are proposed to be set up in J&K, Punjab, Tamil
Nadu, Himachal Pradesh and Assam, and one AIIMS like institute to be set up in Bihar. These
measures would significantly increase the demand for medical devices, since nearly 30% of the
total project cost of such institutions constitutes medical devices.
(c) In the last two decades, the healthcare provider segment in India has witnessed
increased number of private players setting up chain of hospitals, diagnostic centres and
specialized care facilities. Such spread of private healthcare providers to Tier II and Tier III cities
creates a huge demand for medical devices[7].
(d) Similarly, emerging new formats in healthcare services like single specialty facilities,
home care, dental chain, diagnostic chain, dialysis centres, day care surgical centres, and others.
The emergence of new formats in healthcare has provided boost to the medical device sector in
India.(vii) Quality and Accreditation of Hospitals - Nearly 400 hospitals have received the
NABH accreditation in the last one decade. Apart from this, India has more than 20 JCI
accredited healthcare facilities.

[7] – Indian Pharmaceutical Annual Report 2018


2.2.1 Current Scenario

“Indian pharmaceutical industry is expected to grow at 19% in 2020. India is now among
the top five pharmaceutical emerging markets. There will be new drug launches, new drug
filings, and Phase II clinic trials throughout the year. On back of increasing sales of generic
medicines, continued growth in chronic therapies and a greater penetration in rural markets, the
domestic.

Moreover, the increasing population of the higher-income group in the country will open
a potential US$ 8 billion market for multinational companies selling costly drugs by 2022.
Besides, the domestic Pharma market is estimated to touch US$ 20 billion by 2020, making India
a lucrative destination for clinical trials for global giants”[8].

“The Indian pharmaceutical industry accounts for over 8 percent of global


pharmaceutical production. The industry has over 60,000 generic brands across 60 therapeutic
categories and manufactures more than 400 different active pharmaceutical ingredients
(APIs).The Indian Pharma industry has been growing at compounded annual growth rate
(CAGR) of more than 15 % over the last five years and has significant growth opportunities.

Medicine spending in India is projected to grow 9-12 per cent over the next five years,
leading India to become one of the top 10 countries in terms of medicine spending.

Going forward, better growth in domestic sales would also depend on the ability of
companies to align their product portfolio towards chronic therapies for diseases such as
cardiovascular,

The Indian government has taken many steps to reduce costs and bring down healthcare
expenses. Speedy introduction of generic drugs into the market has remained in focus and is
expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health
programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical
companies.”[9]

[8] – Indian Pharmaceutical Annual Report 2018

[9] - http://www.ibef.org/industry/pharmaceutical-india.aspx
Market Size

“On improved utilization of manufacturing facilities, the domestic pharmaceutical market


is likely to see high revenue growth and profit margins. Pharmaceutical sales in India are
expected to grow by 14.4 % to US$ 27 billion in 2018 from US$ 22.6 billion in 2015, according
to a report ‗2018 Global Life Sciences Outlook‘. India‘s pharmaceutical exports stood at US$
14.84 billion in FY 2018–19. The United States (US) is the country‘s biggest market for Pharma
exports accounting for about 25 %, followed by the United Kingdom (UK). ―India has been
able to make its name as a quality supplier of affordable medicines across the globe.
Pharma exports from India will be more than the size of the domestic sales by FY 2018,
according to a report by India Ratings & Research. The country provides generic medicines to
almost 200 countries”[9]. “It is responsible for about 40 per cent of the generic and over the-
counter drugs consumed in the US. Indian generics market is expected to grow to US$ 26.1
billion by 2020 from US$ 11.3 billion in 2011.

Table No. 2.2 Leading Indian players by sales (INR Billion)”[10]

Company name Sales in INR billion

Ranbaxy Lab 76.86

Cipla 69.77

Dr Reddy's Labs 66.86

Lupin Ltd. 53.64

Aurobindo Pharma 42.84

Sun Pharma 40.15

Cadila Health 31.52

Wockhardt 26.50

Jubilant Life 26.41

Ipca Labs 23.52

[09] Source-http://www.pharmaceutical-drug-manufacturers.com/articles/top10-pharmaceuticals-companies-in-india

[10] - http://www.ibef.org/industry/pharmaceutical-india.aspx
“Challenges: Over the past decade, pharmaceutical companies have entered a difficult period
where shareholders, the market, and regulators have created significant pressures for change
within the industry. The core issues for most of drug companies are declining productivity of in-
house R & D, patent expiration of number of block buster drugs, increasing legal and regulatory
concern, and pricing issue. As a result larger pharmaceutical companies are shifting to new
business model with greater outsourcing of discovery services, clinical research and
manufacturing.”[10]

“Future Growth:- India will see the largest number of merger and acquisitions (M&A) in the
pharmaceutical and healthcare sector. A survey conducted across 100 companies has revealed that
one- fourth of the respondents were optimistic about acquisitions in the pharmaceutical sector.
The Indian pharmaceutical market is expected to grow at a CAGR of 15.3 % during
2018-19 to 2021-22. The growth of Indian Pharma companies will also be driven by the fastest
growing molecules in the diabetes, skincare, and eye care segment.[11]

“Government policies:- The Indian government has been making efforts to improve nationwide
provision of healthcare.
It has launched policies that are aimed at:
• building more hospitals,
• boosting local access to healthcare,
• improving the quality of medical training,
• increasing public expenditure on healthcare to 2-3% of GDP, up from a current low of
1%. Some of the significant government allocations on healthcare spend include a five
year tax break for opening hospitals anywhere in India, with an added focus on tier II and
tier III markets, both in the 2018-19 Union Budget. Some of the significant government
allocations on healthcare spend include a five year tax break for opening hospitals
anywhere in India, with an added focus on tier II and tier III markets, both in the 2018-19
Union Budget”[12].

[10] & [11] - http://www.pharmabiz.com/ArticleDetails.aspx?aid=79940&sid=9


[12]- www.pwc.com/india
Growth of Import-Export
a) Imports:-
As per the Directorate General of Commercial Intelligence and Statistics (D.G.C.I.S.)
Kolkata, the value of imports of ―Medicinal and Pharmaceuticals Products‖ for the latest
period 2007-08 to 2010-11 is as under: In the year 2010-11 the import as shown declined in
growth compared to previous year. The country is almost self-sufficient in production of
most of formulations / pharmaceuticals products
India imports more than 75% of all its medical device needs. The import of medical
devices has grown from USD 2.46 bn (INR 15,990 crores) in FY12 to USD 2.87 bn (INR
18,655 crores) in FY16. The export of medical devices has grown from USD 0.78 bn (INR
5,070 crores) in FY12 to USD 0.98 bn (INR 6,370 crores) in FY16. Between FY12 to FY16,
the import trade of medical devices has increased by 16.8 per cent, whereas export trade has
increased by 25.7 per cent

It may be observed that the imports have shown a growth of 29.43% in the year
2011-12 compared to previous year. The country is almost self-sufficient in production of
most of formulations/ pharmaceuticals products. As such imports are being resorted to on
quality & economic considerations and not necessarily due to non-availability from domestic
sources. Manufacturers of Drugs & Pharmaceuticals are free to produce any drugs approved
by the Drug control authorities[13].

[13]- Government of India Ministry of Chemicals & Fertilizers Department of Pharmaceuticals, Annual Report
2012-13
Import of Drugs & Pharmaceuticals is regulated as per the Foreign Trade Policy of
Government of India. Import of some drugs and drug intermediates are restricted under
current Foreign Trade Policy. These restrictions are basically due to common HS codes
assigned to some narcotic substances or similarity to some Ozone Depleting Substances
(ODS) with pharmaceutical products.

EXPORTS:-[14]

The Indian pharmaceuticals market is the third-largest in terms of volume and


thirteenth-largest in terms of value. It has established itself as a global manufacturing and
research hub. A large raw material base and the availability of a skilled workforce give the
industry a definite competitive advantage. The Indian pharmaceutical industry is expected to
grow at a compound annual growth rate (CAGR) of 22.4 per cent to touch US$ 55 billion by
2020.

The Indian Pharmaceutical market is dominated by generic drugs which constitutes nearly 70
per cent of the market, whereas Over the Counter (OTC) medicines and patented drugs make
up to 21 per cent and 9 per cent respectively[14].

Pharmaceutical export from India stood at US$ 17.27 billion in 2017-18, and is expected to
grow by 30 per cent to reach US$ 20 billion by the year 2020.

 Exports of pharmaceutical* products together stood at US$ 10.80 billion during April-
October 2018.
 During April-October 2018, top importers of India’s pharmaceutical* products were USA (
US$ 3.21 billion), UK (US$ 383.30 million), South Africa (US$ 367.35 million), Russia
(US$ 283.33 million) and Nigeria (US$ 255.89 million).
 India is expected to rank amongst the top three pharmaceutical markets in terms of
incremental growth by 2020.
 India is the largest supplier of generic medicines globally (20 to 22 per cent of global export
volume)
 India has one of the lowest manufacturing costs in the world. It is lower than that of USA and
almost half of Europe.

[14]- Government of India Ministry of Chemicals & Fertilizers Department of Pharmaceuticals, Annual Report
2017-18
Growth in Indian Pharmaceutical Industry:-[14]

The domestic Pharma Industry has recently achieved some historic milestones through a
leadership position and global presence as a world class cost effective generic drugs‘
manufacturerof AIDS medicines. Many Indian companies are part of an agreement where major
AIDS drugs based on Lamivudine, Stavudine, Zidovudine, Nevirapine

2.2.7. Projected Growth:-[14]

[12] - Government of India Ministry of Chemicals & Fertilizers Department of Pharmaceuticals, Annual Report 2017-18
[13] & [14] - Government of India Ministry of Chemicals & Fertilizers Department of Pharmaceuticals, Annual Report 2018
GENERIC DRUGS

A generic drug is identical - or bioequivalent -- to a brand name drug in dosage form, safety,
strength, route of administration, quality, performance characteristics and intended use. Although
generic drugs are chemically identical to their branded counterparts, they are typically sold at
substantial discounts from the branded price. The determination of drug approval is made according
to whether it is pharmaceutically equivalent, bio-available, and bioequivalent. World Health
Organization (WHO) provided a definition for counterfeit drugs. After the patent is over, the same
drug can be copied by anybody and the costs reduce drastically. Many of the anti-diabetic,
antihypertensive and antibiotic drugs are available now as ‗Generic‘ formulations. [19]

After the expiry of patent of the patented drug, generic drugs are marketed. Generic drugs are
available at affordable prices with maintaining quality. These ‗Generic‘ formulations balance public
interest as critical disease like cancer, AIDS etc. Brand name and generic versions of medicines like
high blood pressure, diabetes, etc. Today about 50% of all prescriptions are filled with generic drugs.
The FDA has established standards for generic drugs that might seem complicated but are really
simple.
The most important advantage with generic drugs is less expensive than the branded
versions. They are cheaper as no R & D investments are involved as in the case of branded or new
drug. Generic manufacturers are able to sell their products for lower prices because they are not
required to repeat the costly clinical trials of new drugs and generally do not pay for costly
advertising, marketing, and promotion. In addition, multiple generic companies are often approved
to market a single product; this creates competition in the market place, often resulting in lower
prices. So Generics can cost between 20 and 80 percent less. [20]
According to the FDA, to substitute a generic for brand name drug must follow following
criteria - It must contain the same active ingredients (the chemical substance that makes the drug
work), the same dosage strength (the amount of active ingredients, for example 20 mg or 40 mg), the
same dosage form (that it, it needs to be available in the same form as the original – for example as
liquid, pill, etc.), have same route of administration (the way the medication is introduced into the
body)
[19] - http://www.who.int/trade/glossary/story034/en/
[20] - http://en.wikipedia.org/wiki/Generic_drug
The generic market reached 100 billion dollar in 2010. The generic growth is three times
higher than the overall growth of drugs. According to expectation of pharmaceutical industry,
percentage of generic drugs in the US market will rise from 14 to 21. [21] This growth will enhance
the export of pharmaceutical products from India will double every year. In future contribution from
the Indian pharmaceutical companies will increase due to low cost of worker, innovation, recent
success in track record in design operation of high tech manufacturing, testing, quality control,
research, clinical testing and biotechnology.
Availability of Generic drugs in the Indian Market is very low. It is only supplied to the
Government and other hospitals or to the physician‘s dispensary. For more profit, generally
branded drugs are promoted to doctors while branded generics are sold at the Maximum Retail
Price (MRP). But distributor‘s buys branded generic from companies at the discount of 10-15%
of the MRP. In present situation, consumer patients are not benefited and retail chemists earn
huge profit.

Generic Drugs are available all over the world at affordable prices with maintaining
quality. These ‗Generic‘ formulations balance public interest like critical disease like cancer,
AIDS etc. Most nations require generic drug manufacturers to prove their formulation exhibits
bioequivalence to the innovator product. A number of developing countries have made use of
compulsory licensing or government use orders to enable the supply of more affordable generic
drugs in recent years. India today has the distinction of producing high quality generic medicines
that are sold around the world. India tops in the world in exporting generic medicines and
currently, the Indian pharmaceutical industry is one of the world's largest and most developed
industry.

3.1.1. Scope of generic drugs [22]


In today‘s era, the scope of generic drugs is increasing day by day specially in several ill
health conditions such as diabetes, cardiovascular and in microbial diseases etc. When any patent
expires, new generics are introduced into the market. The scope is also increased due to Para IV
filings and Bolar provisions. Recently, Para IV filing strategy has been adopted by leading Indian
pharmaceutical companies to introduce generic drug of its own taking advantage of shortcoming
in patent application of patent holders.
[21] - shopper‘s guide to prescription generic drugs.
[22] - http://blog.oureducation.in/generic-drugs/
According to this, a generic manufacturer challenges the original patented drug and claims that
the generic version proposed to be launched by the manufacturer does not infringe the patent
holder‘s version. In case a patent challenge is won, it entitles the first to file Para IV generic
manufacturer a 180 days exclusivity, if company come up with an equivalent of the innovator‘s
branded formulation. ‗Bolar provision‘ allows generic manufacturers to prepare and develop
regulatory procedures before patent expires, so that, products are ready for market as soon as the
patent ends. With these provisions, in India, the scope of generic drug manufacturing has also
increased.
[23]
3.1.2. Basic Generic Drugs Requirement:-
 Same active ingredient(s)

 Same route of administration

 Same dosage form

 Same strength

 Same condition of use

 Inactive ingredient already approved in similar NDA


3.2. GENERIC INDUSTRY

The generic drug industry covers the marketing and sale of medication containing
the same active ingredients (API's) and dosages as brand-name drugs manufactured by the
pharmaceutical industry. Generic drugs are under the same governance as brand-name
drugs and must adhere to the same standards. When brand-name drugs come off patent, the
market opened up to generic versions. Patent protection generally protects a
drug'sintellectual property rights for about 20 years, butbecause the patent is effective from
the clinical trialstage.
Since the late 1970‘s the substitution of generic drugs for brand name drugs has
become a relatively common physician practice. By the late 1980‘s more than three in five
(62.5%)family physicians ―said they had enough confidence in generic drugs to prescribe
them intheir practices, but that only 26.9 percent said they actually prescribed mostly
generics‖ (Bower and Burkett, 1987). At the same time, several studies reported a
connection between physicians‘ sources of drug information, their attitudes toward generics
and their prescribing patterns.

[23] - http://www.fda.gov/downloads/Drug/SmallBusinessAssistance/ucm127615.pdf
By 2003 generic drug prescriptions represented 43 percent of all prescriptions
written and47 percent of new (non-refill) prescriptions Generic drugs were also one of the
fastest growing sectors of the pharmaceutical industry.2 Given the rise in direct-to
consumer advertising, the use of formularies to control costs, and continued concern about
drug safety, it is time to revisit physicians‘ opinions and practices regarding generic drug
substitution. [24]
Graph no: - 3.2.1- Leading Companies in the Generic Industry:-

Source: - new Pharma thinkers - The Generic Market Industry


3.3. GLOBAL GENERIC INDUSTRY:-

The availability of generic drugs will drive demand in developing countries.


Growing middle classes in Asia, the Middle East, and Latin America will seek affordable
versions of the best selling drugs. Central and South American governments are stepping
up healthcare efforts and with a growing 65-and-older population, the use of generic drugs
in the region is growing exponentially. Chinese and Indian drug manufacturers already
produce more than 80% of API's used in medication worldwide. With patent expirations,
the production and demand for generic drugs and APIs in China, India, Latin America, and
Central & Eastern Europe is expected to climb. [25]
[24] - (IMS Health, 2004).
[25] - New Pharma thinkers - The Generic Market Industry
Teva is the world's biggest generic company and is continuing to climb. During the course of
2010, Teva launched 18 generics that targeted drugs with 12.2 billion in U.S. Sales. Teva
reported that it accounts for 21.8% of total U.S. Generic prescriptions. [26] Teva manufactures 71
billion tablets a year in 77 pharmaceutical and API facilities around the world.
Sandoz is the number two generic company worldwide. It is Novartis' generic unit,
located in Germany with a 7.8 % market share. The company has strong results from the
U.S., Canada, Russia, Italy, Japan, and biosimilars. Sandoz has three strategic priorities:-
1. To be first-to-market as originators' substance patents expire of become unenforceable
2. To be cost competitive by leveraging economics of sale in development and production
3. To differentiate Sandoz based on its extensive global reach and advanced technical
expertise in the development [27]

3.3.1. An Economic Analysis of Generic Drug Usage:-This independent analysis, conducted


by the
IMS Institute.[28]
 The use of generic prescription drugs in place of their brand name Counterparts saved the
health care system more than $931 billion over the past decade.

 In 2010 alone, generic use generated more than $157 billion in savings.

 Savings from newer generic medicines—those that have entered the market since2001—
continue to increase exponentially and account for more than one-third of the total
savings.

Graph no. 3.3.2

Source - www.tevagenerics.com/assets/base/pdf/Savings,AnEconomicAnalysis.pdf

[26] & [27] - new Pharma thinkers - The Generic Market Industry
[28] - http://www.tevagenerics.com/assets/base/pdf/Savings,AnEconomicAnalysis.pdf
INDIAN GENERIC DRUGS INDUSTRY:-
India supplies 20% of generic drugs worldwide Posted 01/03/2013. Every fifth tablet,
capsule and injectibles generic drug being used in the world is manufactured in India, according
to India‘s Health Minister Ghulam Nabi Azad.
―Being a world leader in generics, India already has a huge presence in the highly
regulated markets in terms of Pharma exports. Almost two thirds of Indian generic exports are to
the highly regulated markets (e.g. the US and Europe), which speaks volumes about the quality
of Indian medicines.

Already this year, India‘s Dr. Reddy‘s, Lupin Labs, Sun Pharma, Ranbaxy and Cipla
have invested over $ 500 million in R&D, which is allowing increased innovation in
manufacturing processes and will ultimately help to lower the cost of medicines production.[29]

3.4.1. Growth of Generic Drug Industry:-[30]


In future contribution from the Indian pharmaceutical companies will increase due to
low cost of worker, innovation, recent success in track record in design operation of high tech
manufacturing, testing, quality control, research, clinical testing and biotechnology. Most of the
Indian companies have United States Food and Drug Administration (USFDA) approved plants,
about 20% of all Abbreviated New Drug Applications (ANDA) to the USFDA are field by
Indian companies. Now India‘s share of the generic market is about to 35%. Hence the
contribution of the Indian pharmaceutical industry for the growth of generic drugs in the world is
very high.
Over the next few years, an abnormally large number of blockbuster drugs are scheduled
to lose their patent protection, opening the doors to cheaper generic drugs. These drugs are
Blockbuster-brand products and offer tremendous scope to generic manufactures.
In December‘ 2011, Ranbaxy receives approval for the generic ‗Atorvastatin‘
tablets Of the original brand name drug ‗Lipitor‘ owned by Pfizer, Inc.

[29] - http://www.cci.gov.in/images/media/presentations/ComIssGenPharmIndusIndia_20100401142346.pdf

[30] - international journal of pharmaceutical, chemical and biological sciences.


In March 2012, Natco Pharma got compulsory License (CL) for ‗Sorafenib to sylate‘ of
the original brand name drug ‗Nexavar‘ owned by Bayer Corp. under the provisions of the
section 84 of the Indian Patent Act 1970. It is used for the treatment of Liver and Kidneycancer.
Its price now Rs 8,800 for 120 tablets (one month‘s therapy) as against Rs. 2,84,428 being the
cost of ‗Nexavar‘ sold by Bayer Corp.

Growth in the use of generics in India is being encouraged by instructions being issued to
governmental hospitals and doctors to prescribe and to pharmacies to dispense generics ‗to the
maximum extent possible‘.

3.4.2. Availability of Generic drugs in the Indian Market:- [31]


Availability of Generic drugs in the Indian Market is very low. It is only supplied to the
Government and other hospitals or to the physician‘s dispensary. For more profit, generally
branded drugs are promoted to doctors while branded generics are sold at the Maximum Retail
Price (MRP). But distributor‘s buys branded generic from companies at the discount of 10-15%
of the MRP. In present situation, consumer patients are not benefited and retail chemists earn
huge profit.
3.4.3. Exports of generic drugs by Indian Pharma companies:-[32]
India's pharmaceutical industry is gaining its position as a global leader. The Pharma
market in India is expected to touch US$ 74 billion in sales by 2020 from the current US$ 11
billion, according to a Price water house Cooper (PwC) report.
India has world renowned capacity in producing low cost, high quality bulk and generic
drugs. The share of Indian Pharma companies in the total pie of approvals for generic drugs
(called abbreviated new drug applications (ANDA) approvals in the US) has risen steadily. In
2011 itself, more than a third of the ANDA approvals were by Indian firms. As a consequence,
formulation exports from India, essentially generic drugs, have grown at 21 per cent
compounded annual growth rate (CAGR) between 2005-06 and 2010-11. With patents of about
US$ 150 billion worth of drugs set to expire between 2010 and 2015, it is expected that the
growth momentum in exports would continue over the next five years, with exports growing at
14-16 per cent CAGR,

[31] & [32] - www.ijpcbs.com/ THE IMPORTANCE OF GENERIC DRUGS IN INDIA


INDIAN GENERIC DRUGS [33]
Table No. - 3.5.1.

[33] - INDIAN DRUGS & PHARMACEUTICALS LIMITED w.e.f- 10.01.2018

Table Continues...
[33] - INDIAN DRUGS & PHARMACEUTICALS LIMITED w.e.f- 10.01.2018
c
Patent formula[34]

1. A chemical patent, pharmaceutical patent or drug patent is a patent for an invention in


the chemical or pharmaceuticals industry. Strictly speaking, in most jurisdictions, there are
essentially no differences between the legal requirements to obtain a patent for an invention
in the chemical or pharmaceutical fields, in comparison to obtaining a patent in the other
fields, such as in the mechanical field. A chemical patent or a pharmaceutical patent is
therefore not a sui generis right, i.e. a special legal type of patent.
2. In the pharmaceutical industry, the patent protection of drugs and medicines is accorded a
particular importance, because drugs and medicines can easily be copied or imitated (by
analyzing a pharmaceutical substance) and because of the significant research and
development spending and the high risks associated with the development of a new drug.

3. Chemical patents are different from other sources of technical information because of the
generic, Markush structures contained within them, named after the inventor Eugene
Markush who won a claim in the US in 1925 to allow such structures to be used in patent
claims. These generic structures are used to make the patent claim as broad as possible.
4. In the United States, patents on pharmaceuticals were considered unethical by the medical
profession during most of the nineteenth-century.[34]

Competitiveness of the generic medicine[35]

Much has been said in order to increase the competiveness of generics, for example, during the
year of 2018 the G10 reunion about medicines took place in Mumbai, India. The results to
promote generics competiveness were 9 ten measures to be implemented in a national context:

- Awareness of doctors to use active substances denomination;

- Help doctors in the perception of economic impact in the prescribing decision;

- Increase the usage of electronic receipt;

- Creation of substitution list;

[34] -https://en.wikipedia.org/wiki/PatentGenerics/drugs
[35]- Adriaen, M., K. De Witte, and S. Simoens (2008), ‘Pricing Strategies of Originator and Generic
Medicines Following Patent Expiry in Belgium’, Journal of Generic Medicines
- Increase incentives to dispense generic and replacement (seen as particularly important in
systems where doctors are not very sensitive to issues of economics and health);

- Improve consumer awareness about the offer and quality of generics;

- Improve the pharmacoeconomic evaluation of new products in comparison with existing


products;

- Creation of reimbursement systems and health insurance oriented to generics;

- Adoption of reference prices and free pricing systems;

- Reducing the waiting time between the receptions of the MA to a generic medicine, pricing,
reimbursement and/or substitution situation.

The fact that there are scarce resources, associated with the necessity to guarantee equal access
conditions independently of the paying capacity, constitute by itself, a strong rational basis for
generics usage.

The European Generics Association, 2013, agrees that Europe’s generic medicines companies
already have the scientific knowledge and technical experience to produce safe and effective
biosimilar pharmaceuticals, which are medicines derived from biotechnology (EGA, 2013). 9
Font: European Generics Medicine Association, 2003 Consumer Attitudes and Perceptions
towards Medicines Types: Brand Medicines versus Generic Medicines 43 Since 2006 the
European Commission has authorized several biosimilar medicines in Europe, sustaining that
each of them was compared to and matches the reference medicine in what concerns quality
(how it is made), safety (side effects that can occur when receiving treatment are similar), and
effectiveness. Europe’s healthcare systems are excited about the cost relief and the increased
patient access to the life enhancing treatments that biosimilar products will bring (EGA,
2013)[35].

[35] - Adriaen, M., K. De Witte, and S. Simoens (2008), ‘Pricing Strategies of Originator and Generic
Medicines Following Patent Expiry in Belgium’, Journal of Generic Medicines.
2.3 With prescription versus Without Prescription – OTC [36]

Over the counter (OTC) medicines, are those that can be bought from pharmacies even without
physicians or doctor’s prescription. There can be several sorts of those medicines in the market,
to relieve pains, itches and aches to cure diseases like athletes foot. In order to be considered an
OTC, drugs must be deliberated by a regulatory body to accomplish if they are safe for public
use to be sold over the counter, within a period of 3 to 5 years, they were proven to be safe and
effective as a prescribed medicine, they may already be regarded as an OTC drugs. Consumers
should pay attention to the fact that OTC drugs have contraindications with drinks, foods,
supplements and other medicines. OTC medicines are to be used even without supervision from
a medical practitioner or doctor, although manufactures should abide by concept that OTC’s
should have little potential or no potential at all of being used excessively .

Distribution circuit chain [36]:

Figure 1 shows how a manufactured product passes through the company-owned central
warehouse, which supplies it to the CFA or super stockist. From the CFA the stocks are supplied
either to the stockist, substockist, or hospitals. The retail pharmacy obtains products from the
stockist or substockist through whom it finally reaches the consumers (patients). Certain small
manufacturers directly supply the drugs to the super stockist.

[36]- : https://www.pharmaceutical-technology.com/features/featurethe-worlds-
biggest-generic-pharmaceutical-companies-4853429/
Safety, quality in Generics [38]

Due to the fact that generic medicines are cheaper than the branded, many patients are attracted
by this powerful argument (Weber, 2008). Although people are still concern about why these
medicines are less expensive, wondering if the quality and effectiveness are compromised when
using generics (Stoppler & Hecht, 2009). Nevertheless, the answer, according to theses authors is
simple, this medicines are less expensive due to the fact that manufacturers have no expenses in
the development, research, marketing and promotion, because this issues have already been done
by the company that possess the patent. When the medicines patent protection ends, the
molecular formula becomes a matter of public, and by this time other pharmaceutical companies
are allowed to manufacture the medicine as well. In the end the only investment necessary for
generic manufactures are the costs of setting up a production line (Weber, 2008).

When a pharma company invest & develop any new drug & earn patent rights for it, then is
called branded drug(BD). The duplicates of branded drugs are known as generic drugs. They
have following differences:

Production: Only Company with patent rights are allowed to manufacture Branded Drug. Once
patent lapses, other companies are allowed to produce generic drugs.

Cost[38]: Unlike generic drugs, branded drugs incur high cost due to high investment research &
development.

Ingredients: The active ingredient (the one which cure the disease) of both drugs are same but
the differs in colour, shape or taste

Affordable, effective & easy drug access important for "universal healthcare”. So, India has
decided to bring a law for doctors to prescribe generic medicines which have certain issues:

[38]- https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4519587/
[38] -https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4519587/
Implementation[39]: Lower awareness and corruption have given rise nexus between Doctors
chemists & pharma sector. So, public awareness via digital

1. media along surveillance mechanism to curb nexus


2. International pressure: Big western pharmaceutical lobbies may back stringent IPR rigme
& compulsory licensing. They may blame India to breach TRIPS agreement and drag into
WTO. But recent UN report has given precedence to human rights over patent rights which
support India's move for affordable generic price to improve health care
3. Supply side challenge: India is import driven country for active pharmaceutical ingredient
and already facing challenge of substandard quality of generic drugs. Along with this current
move may reduce FDI inflow in pharm sector and slowdown research & development in
domestic pharma companies. However, India has taken steps like ‘India Pharma & India
Medical Device 2017’ and new IPR policy that offer incentive & ease of doing business in
India. India should adopt stricter accreditation and inspection rules for generic drugs.

Worldwide Generic Sales[40] :

[39] - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4519587/
[40]- https://www.sunpharma/annual/report/
Generic sales in world Leading Indian companies[41]

Teva Pharmaceutical Industries

Reported revenues in 2016 were $9.8 billion. Teva regularly records more than $9 billion in sales
and purchased the rights to Allergan's generics division in 2015.

Mylan Inc.

Reported $9.4 billion in revenue for 2016. In 2014, it took on a large part of Abbott
Pharmaceutical's business, purchasing the rights to more than 100 specialty and branded generic
pharmaceuticals. Headquartered in the United States, it has more than 20,000 employees
worldwide.

Sandoz, the generics division of Novartis [41]

Reported $9 billion in revenue in 2016. Sandoz employs more than 25,000 employees worldwide
and runs 30 manufacturing sites.

Pfizer

Reported $4.5 billion in revenue in 2016. Best known for developing Viagra, Pfizer even began
selling its own generic version of the drug when its patent expired in 2017.

Sun Pharmaceutical Industries

Reported $3.6 billion in revenue in 2016 and saw a 68 percent increase in drug revenue, due in
large part to its $4 billion buyout of rival Ranbaxy Laboratories. The purchase added $2 billion
in revenue and solidified Sun as a leader in the generic marketplace. Sun has more than 30,000
employees.

Fresenius Kabi

Reported $2.8 billion in revenue in 2016. The Canadian company focuses on technologies for
infusions, transfusions, and parenteral (intravenous) nutrition.

[41] - https://www.fiercepharma.com/special-report/top-20-generics-companies-by-2018-revenue
[41]- https://www.fiercepharma.com/special-report/top-20-generics-companies-by-2018-revenue
Endo International

Reported $2.5 billion in revenue in 2016. Its generics division is Par Pharmaceuticals, with PAR
standing for

"People Achieving Results." The company began in 1997 after acquiring rights and assets from
the DuPont Merck Pharmaceutical Company.

Lupin [42]

Reported $2.5 billion in revenue in 2016. Lupin entered the generics market in 2003 with the
antibacterial drug Cefuroxime Axetil. As of 2018, Lupin produces more than 75 generic drugs.

Sanofi

Reported $2 billion in revenue in 2016. Operates worldwide generic brands Zentiva, Medley,
Genfar, Winthrop, and Globalpharma.

Aspen Pharmacare

Reported $2 billion in revenue in 2016. As one of the few pharmaceutical companies based in
South Africa, it has seen growth by focusing on emerging markets in Asia. It continues to look
for companies to acquire to add to its portfolio of medications.

Aurobindo Pharma [42]

Reported $1.8 billion in revenue in 2016. Aurobindo has seen considerable growth in recent
years and opened a 565,000-square-foot, fully automated state-of-the-art distribution center in
East Windsor, New Jersey, in 2017.

Dr. Reddy's Laboratories -

Reported $1.8 billion in revenue in 2016. Dr. Reddy's was founded by Dr. Anji Reddy in 1984
when he acquired Cheminor Drugs.

[42] - https://www.fiercepharma.com/special-report/top-20-generics-companies-by-2018-revenue
[42] - https://www.fiercepharma.com/special-report/top-20-generics-companies-by-2018-revenue
Cipla

Reported $1.6 billion in revenue in 2016. Based in India, Cipla also has a strong presence in the
U.S. and South Africa.

Sun Pharma [43]

SUN PHARMACEUTICAL INDUSTRIES LTD.

Sun Pharmaceutical Industries Ltd. (Sun Pharma)Sun Pharma is the world’s fifth largest
specialty generics pharmaceutical company. It is also India’s largest and most valuable
pharmaceutical enterprise by size and market capitalisation. A vertically integrated business,
economies of scale and a skilled team enable it to deliver well-timed quality products at
affordable prices.The Company is deepening its global footprint as a highly trusted
pharmaceutical company among consumers and healthcare professionals in over 100 countries. It
has multiple manufacturing facilities and R&D centres across the world. The Company has
32,000+ global employee base that comprises over 50 nationalities. As an innovation driven
enterprise, it has robust R&D capabilities with investments of over 8.6% of annual revenues.Sun
Pharma’s Global Consumer Healthcare (GCH) business is ranked among the top 10 across four
emerging markets.

Its API business footprint is strengthened through 14 world-class API manufacturing


facilities around the world.The Company has operations spanning segments like specialty
products, branded generics, complex and pure generics, over-the-counter (OTC) products, anti-
retrovirals (ARVs), and active pharmaceutical ingredients (APIs). It also manufactures
intermediates for specialty APIs, offering a full range of dosage forms, including tablets,
capsules, injectables, ointments, creams and liquids. In India, Sun Pharma enjoys leadership
across 13 classes of doctors with 32 brands featuring among the top 300 pharmaceutical brands.
Internationally, the Company has a strong presence in the US, emerging markets, Western
Europe, Japan, Canada, Israel, Australia and New Zealand (A&NZ). It has multiple production
units approved by various regulatory authorities, including the USFDA[43].

[43] – ANNUAL REPORT SUN PHARMA 2016-17


[43] - ANNUAL REPORT SUN PHARMA 2017-18
Progress in FY18

• Revenue from emerging markets grew by 7% to `48,392 Million in FY18. The growth is broad-
based among emerging market[43].

Progress in FY18

• Revenue from APIs Active Pharmaceutical Ingredients (API) business and other sources
declined by 12% to `13,993 Million in FY18

Research & development –

Delivering through innovation Sun Pharma services both regulated and emerging pharmaceutical
markets with its diverse product range of branded and generics products. Its robust research and
development (R&D) capabilities has helped the Company develop technology-intensive products
and deliver them at affordable prices to international markets. It has a wide-ranging portfolio of
2,000+ products across the world.The Company’s capable team of research scientists underpins
its research and development capacities. It has many state-of-the-art research centres located
across the world that provide facilities for developing generic drugs, Active Pharmaceutical
Ingredients (APIs) and Novel Drug Delivery Systems (NDDS). Moreover, it is focussing on
development of New Chemical Entities (NCEs) for global markets and has made significant
investments in this field. Sun Pharma’s R&D centres have been successfully audited and
approved by international regulatory authorities, including the USFDA and European
authorities[43].

The Company has commercialised a formidable product pipeline with successful offerings in
liposomal products, lyophilised injections, nasal sprays, ointments, liquids and oral products
among others. R&D is critical for Sun Pharma and remains a key determinant of its future
growth. Thus, Sun Pharma spent 8.6% of its sales on R&D during FY18. The Company is
focussing more on developing specialty products and technically complex offerings to
differentiate itself from competition. It also has a robust Intellectual Property Rights team,
enabling it to patent its innovations globally and develop non-infringing products.

[43] - ANNUAL REPORT SUN PHARMA 2017-18


Sale of Sun Pharma :-

source – annual report 2018

Dr Reddy’s Laboratory

Dr. Reddy’s operates through three key core business segments: a) Global Generics (GG), which
includes branded and unbranded prescription medicine as well as over-the-counter (OTC)
pharmaceutical products. It also includes the biosimilars business; b) Pharmaceutical Services &
Active Ingredients (PSAI), which comprises Active Pharmaceutical Ingredients (APIs) and
Custom Pharmaceutical Services (CPS); and c) Proprietary Products (PP), which mainly
comprises the differentiated formulations business, focused on dermatology and neurology.
Through its portfolio of products and services, Dr. Reddy’s operates in multiple therapeutic
areas. The major ones cover gastrointestinal, oncology, cardiovascular, pain management,
Central Nervous System (CNS), anti-infective, respiratory an
d dermatology. The company has a presence in many countries across the globe, the key
geographies being the US, Europe, India, Russia, Commonwealth of Independent States (CIS)
countries, China and other emerging markets.

[43] - ANNUAL REPORT DR REDDY’S LABORATORY 2016-17


[43] - ANNUAL REPORT DR REDDY’S LABORATORY 2017-18
FY2018 has been a difficult year for the company, largely on account of two factors. The
extremely difficult market conditions in the US were exacerbated by intense price competition
and channel consolidation. The other roadblock was the inability to supply key molecules to the
US because of three plants being issued warning letters by the US Food and Drug Administration
(USFDA) in November 2015 – a matter that is yet to be resolved till date. But before delving
into these and other details, it is useful to highlight the company’s key consolidated fi nancial
results for FY2018.

GLOBAL GENERICS (GG)[43]

Revenue from GG in FY2018 was ` 114 billion, representing a decline of 1% compared


to the previous year. This was primarily on account of lower contribution from North America
and lower than usual growth witnessed in the India business; Revenue from North America
Generics was ` 59.8 billion, a decline of 6% versus FY2017. This was largely due to significant
adverse price erosion witnessed in some key molecules, such as Azacitidine, Decitabine,
Valgancyclovir, and Esomeprazole DR. As explained earlier, the price erosion was due to
increased competitive intensity coupled with channel consolidation that led to higher purchasing
power in the hands of the limited number of buyers[43].
This decline was partly offset by new products launched during the year and the full-year
impact of products launched during the previous year; During the year, Dr. Reddy’s launched 15
new products in North America – the major ones being Liposomal Doxorubicin,
EzetimibeSimvastatin, Sevelamer, Palonosetron injection and Bivalrudin injection; In FY2018,
we filed 19 new Abbreviated New Drug Applications (ANDAs) and one New Drug Application
(NDA) with the USFDA.
As of 31 March 2018, we had 110 generic fi lings pending approval from the USFDA,
comprising 107 ANDAs and three NDAs fi led under the 505(b)(2) route of the US Federal
Food, Drug and Cosmetic Act. Of the 107 ANDAs, 63 are Para IV applications, of which we
believe 30 have ‘First to File’ status; Revenue from Europe was ` 8.2 billion, representing a
growth of 8% versus FY2017. As mentioned earlier, the growth would have been higher had we
not faced temporary supply restrictions due to the BfArM audit of FTO-2. This matter has been
satisfactorily resolved

[43]-ANNUAL REPORT DR REDDY’S LABORATORY 2017


[43]-SALES OF DR REDDY’S GENERIC MEDICINE
Revenue from Emerging Markets was ` 22.7 billion, a growth of 8% versus FY2017. The
expansion was primarily driven by new product launches and entry into new markets. – Revenue
from Russia was ` 12.6 billion, year-on-year growth of 9%; – Revenue from other CIS countries
and Romania was ` 3.9 billion, year-on-year growth of 6%; and – Revenue from Rest of the
World (RoW) territories was ` 6.1 billion, year-on-year growth of 5%. Revenue from India was `
23.3 billion, a growth of 1% versus FY2017. As mentioned earlier, the growth was muted due to
channel de-stocking witnessed during the transition to the GST regime, impact due to higher tax
rate, and the fact that the indirect tax component is no longer included in gross sales. Adjusted
for these transition-related impacts, the business grew by 8%, thanks to volume uptake and new
products launched during the year

PHARMACEUTICAL SERVICES AND ACTIVE INGREDIENTS (PSAI)

Revenues from PSAI stood at ` 22.0 billion, representing a growth of 3% versus FY2017.
During the year, we fi led 73 Drug Master Files (DMFs) worldwide

PROPRIETARY PRODUCTS (PP)

Revenue from PP was ` 4.2 billion. This included a milestone payment of ` 1.5 billion from
Encore Dermatology Inc. as part of the out-licensing agreement pertaining to IMPOYZ™
(clobetasol propionate) cream 0.025%, which was approved by the USFDA during the year

LUPIN[44]

Lupin is the 4th largest pharmaceutical player in the US by prescriptions (IQVIA NPA, March
2018). Headquartered in Baltimore, Maryland, the Company’s US marketing arm, Lupin
Pharmaceuticals Inc. (LPI), is dedicated to delivering superior quality branded and generic
medicines trusted by healthcare professionals and patients across the region. Over the last five
years, the Company has made strategic investments in the US-based Research & Development
infrastructure and manufacturing facilities.

[44]- ANNUAL REPORT LUPIN 2018


[44]-http://genericdrugs/leadingpharma/lupin/
The Research & Development centre for Inhalation, located in Coral Springs, Florida, was
established in 2013 and commenced full operations in early 2014. The Somerset, New Jersey-
based manufacturing and research operations were acquired in 2016 as part of the GAVIS
transaction. This enabled the Company to broaden its pipeline in Controlled Substances,
Dermatology, Women’s Health and other niche therapeutic areas[45]. In October 2017, Lupin
acquired Symbiomix Therapeutics, LLC and its FDA approved brand, SolosecTM. SolosecTM is
the first and only approved single-dose oral treatment for Bacterial Vaginosis (BV) – the most
prevalent gynaecologic infection in the US, a‰ecting 21 million women between the ages of 14
to 49 annually. The acquisition of the Solosec™ franchise significantly expands Lupin’s
Women’s Health specialty business.

The Company’s Net Sales for the US in FY2018 experienced a 27% decline from the prior year
to close the year at USD 879 million. The Brands business contributed USD 90 million i.e. 10%
of the total US sales and grew 16% from the previous year. The Generics business contributed
USD 789 million i.e. 90% of the total US revenues which was a decline of 30% from the
previous year. The overall decline in US revenues were a result of loss of exclusivity on two key
molecules and price erosion coming in the wake of channel consolidation and intensified
competition[45].

US Generics LPI is currently the 5th largest Generics company in the US with a 5.3% market
share by prescriptions (IQVIA NPA Audit). LPI’s strength in the Generics market is best
characterized by its ability to achieve leading market shares. As of March 2018, 51 of the 157
Generic products marketed by LPI in the US were Ranked No. 1 by market share and 109 of the
157 were in the Top 3 by market share (IQVIA Generics Module, March 2018).

The Company has leveraged its strengths to focus on increasing its market shares not only via
new launches but also through consolidating its position in existing products. Importantly,
constantly engaging with trade partners, customers and world-class execution has fortified the
Company’s supply chain to ensure industry leading service levels

[45]-ANNUAL REPORT LUPIN 2017-18


[45]-ANNUAL REPORT LUPIN 2018
Lupin’s India business has been a dynamic front-runner despite the challenges presented by the
impact of the GST implementation, regulatory challenges and pricing pressures. The
implementation of GST impacted our price realization by ~3% by subsuming all other taxes into
a single consolidated tax. The first quarter which was the period just before GST
implementation, saw a significant impact on volumes as the trade de-stocked resulting in
Industry de-growth. However, the Industry recovered post the GST scenario and Lupin’s
performance was impressive[45].

[45]- ANNUAL REPORT LUPIN 2018


For the year ended 31st March, 2018, our Domestic Formulation Revenue stood at ` 41,253
million, representing a growth of 8% over the previous year as compared to the market growth
rate of 6%. With a 3.5% Market Share (as per IQVIA MAT, March 2018), Lupin’s India
business moved to 5th rank in sales this year from the 6th rank in Indian Pharmaceutical Market
(IPM) last years.

source – sale data lupin worldwide

Generic Pharmaceutical and API Research For Lupin's Generic Pharmaceutical Research team at
its Global R&D hub in Pune, India, FY2018 has been another year of strong performance in
terms of the number of ANDA filings in US and other advanced markets. The year also marked a
successful foray into the injectable space with the filing of our first injectable ANDAs in the US
in addition to ANDA filings in the Oral, Ophthalmic, Dermatology and Inhalation space. The
Company’s generic pipeline in the Oral Space holds key focus on developing complex products
in view of upcoming patent expirations or market needs. This is complemented by a
comprehensive pipeline of high entry barrier products with complexities linked with a delivery
system, device design and clinical trial requirements in the inhalation and injectable space. Our
constant quest is to design a balanced pipeline of products to establish Lupin as a meaningful
Complex Generics player while continuing to hold its leadership generic position in markets like
the US. In process research, the Company is developing APIs for Complex Generics and is
preparing for development of peptides and Hormonal APIs in the coming year[45].

[45]- ANNUAL REPORT LUPIN 2018


The Company is vigorously pursuing its initiative in Biocatalysis and Fermentation based
processes for APIs. The Company’s Analytical Research facility is fully automated and equipped
with state-of-the-art technology. Apart from the newly established Extractable & Leachable
laboratory, the facility is equipped with latest equipments ranging from Di§erential Scanning
Calorimetry, Dynamic Vapor Absorption System, Scanning Electron Microscope, Raman
Spectroscopy System and Automated preparative HPLCs to name a few.

Key Highlights – FY2018

Filed 20 generic products in other advanced markets including the EMEA region (Europe,
Middle East and Africa), APAC region (Japan & Australia), Canada and Latin America (Brazil
& Mexico) and received 22 approvals in these geographies. In FY2018, the Company launched
16 new products in these markets

AUROBINDO[46]

Aurobindo is one of the largest vertically integrated pharmaceutical companies in India. It has
carved a niche for itself in developing high-quality Active Pharmaceutical Ingredients (APIs) and
finisheddosage forms. The Company is the market leader in semi-synthetic penicillin. Moreover,
it has established a firm foothold in key therapeutic segments such as anti-biotics, Central
Nervous System (CNS), cardiovascular (CVS), anti-retrovirals, diabetics, anti-allergies and
gastroenterology, among others. Aurobindo’s state-of-the-art manufacturing facilities have been
approved by the US Food and Drug Administration (FDA), UK Medicines and Healthcare
products Regulatory Agency (MHRA), Medicines Control Council-South Africa (MCC-SA),
EMA and ANVISA-Brazil for both APIs and formulations. Leveraging on this, the Company has
Joint Ventures (JVs) and strategic alliances with 56 subsidiaries. Aurobindo exports to over 150
countries across the globe, with around 90% of its revenues being derived from international
operations. In the last fiscal, the Company focused on increasing the complexity and diversity of
the portfolio, while retaining the core business and augmenting capability and capacity to
strengthen it. The Company is now addressing the prescription, biopsy and consumer healthcare
[Over-the-Counter (OTC) and Dietary Supplements] segments. From a long-term growth
strategy perspective, the Company is working on differentiated technologies and segments,
including biologics, vaccines, and peptides[46].
[46]- Annual report Aurobindo pharma 2017-18
Aurobindo pharma sales and growth –

India has among the lowest spends on healthcare, at about 4.5% of the GDP against the global
average of 9%. This gap has prompted the Government of India to actively focus on policies that
provide impetus to the healthcare sector.

The Government has taken a hallmark step of launching a National Health Protection Scheme
(NHPS) to cover over 100 million poor and vulnerable families. The scheme provides an annual
coverage of `5 lakh per family for secondary and tertiary care hospitalization. Such measures by
the Government saw India attract a record Foreign Direct Investment (FDI) of $747 million in
the healthcare sector during the fiscal. Further, spending on medicines is projected to grow by 9-
12% in the next five years compared to China’s 5-8%, according to IQVIA. This growth will
thrust India forward to reach the list of the Top 10 countries in the ongoing financial year[47].

While this domestic growth is a massive opportunity for the Indian domestic pharma industry, it
is also well-poised to serve the international markets. India is the largest maker of generic
medicines, with the Indian pharma industry contributing to 20% of the global generics exports.
By 2020, the Indian industry revenue is expected to touch $55 billion. New drugs being brought
under Drug Price Control Orders (DPCO); a price cap on stents, implants, and procedures; and
an increasing number of licenses being withdrawn by the regulators are among the challenges
faced by the industry.

[47]-Annual sales Aurobindo pharma 2017-18


Cipla[48]

2018 Generics Sales : $1.4billion+17%


Worldwide Market Share : 1.9%

India's Cipla grew its 2014 generics sales 17% to $1.4 billion, and it has done so aggressively.
But what distinguishes Cipla from other Indian generics companies is its geographic focus.
Rather than targeting the U.S. market, it has concentrated on India, challenging the patents on
Big Pharma's top drugs. And its generics revenue reflects that: 42% of its revenue came
fromIndia, while 8% came from the U.S.

The company has also put together partnerships and operations in many developing countries,
like Iran and Yemen, where other drugmakers are leery of entering. For example, in July 2014,
Cipla expanded in Yemen, where it was already selling 200 products. It agreed to buy a 51%
stake in a pharmaceuticals manufacturing and distribution business there for $21 million. And in
a cagey October statement, Cipla said it was tapping "its existing Iranian distributor for setting
up a manufacturing facility in Iran," without giving further details.

In September, Cipla bought two manufacturing facilities in India from Okasa for $16.7 million,
and earlier in the year it reported it would spend $14 million to acquire a 60% stake in a Sri
Lankan company that would distribute its products there. The company has successfully
incorporated its subsidiaries in Sri Lanka and Morocco, and integrated its front-end teams in
Myanmar, Nepal and Malaysia, among other markets.

As for the U.K., Cipla announced in July that it would invest $172 million to beef up sales of its
respiratory, oncology and antiretroviral drugs there[48].

In 2014, it launched sofosbuvir--generic Sovaldi--in India, where it has about 5% of the generics
market share. But the real star of the show is its flagship product: fluticasone-salmeterol MDI, or
generic Advair. The GlaxoSmithKline ($GSK) blockbuster went off patent in the U.S. in 2009
and in Europe in 2013. Cipla's Advair copy was rolled out in Germany and Sweden in September
2014. By then, it was already being sold in Croatia and approved in 10 countries. Its licensing
agreement for sofosbuvir allows Cipla to market it in 91 countries[48].

[48]-Annual Report Cipla 2017-18


Cipla made 12 new regulatory filings in North America in 2014 and launched several new
products in that market, including amlodipine, doxycycline, meloxicam and valacyclovir.

Cipla is known for its willingness to tangle with Western drug companies in India over patents

and prices, and that sometimes means court battles. Cipla petitioned the Indian government to
revoke 5 patents for Novartis' ($NVS) COPD drug Indacterol but rolled out a copy without
waiting for a decision. It claimed there was a public healthcare need and not enough local access.
It priced its version at about a fifth of the cost of Indacterol. But Novartis didn't see it that way
and sued Cipla in December[48].

Cipla is waging other patent battles in India, most notably with Roche ($RHHBY) over a lung
cancer drug. A court ruled in 2012 that Cipla's knockoff didn't infringe Roche's patent, but
thanks to a Roche appeal, the case is still floating around the courts.

More recently, Cipla has been convinced to do more in the U.S. This year it agreed to pay $550
million for New Jersey-based InvaGen and a marketing subsidiary, getting a small portfolio of
drugs and its first U.S. manufacturing facility.

GENERIC MEDICINE GOVERNMENT SCHEME[49]

PRADHAN MANTRI BHARTIYA JANAUSHADHI PARIYOJANA (PMBJP)

Introduction:
The Jan Aushadhi Scheme was launched in the year 2008 with the aim of selling affordable
generic medicines through dedicated sales outlets i.e. Jan Aushadhi Stores in various districts
across the country.

Some of the objectives of the scheme are as follows:-


• Ensure access to quality medicines.
• Extend coverage of quality generic medicines so as to reduce and thereby redefine the unit cost
of treatment per person.
[48]-Annual report cipla 2017-18
[49]- Department of Pharmaceutical Annual report 2017-18
• Create awareness about generic medicines through education and publicity so that quality is not
synonymous with only high price

• Be a public programme involving Government, PSUs, Private Sector, NGO, Societies, Co-
operative Bodies and other Institutions
• Create demand for generic medicines by improving access to batter healthcare through low
treatment cost and easy availability wherever needed in all therapeutic categories.

The first Jan Aushadhi Store was opened at Amritsar in Punjab in November 2008.
The original target of the campaign was to establish Jan Aushadhi Stores in every district of our
country.Recently, “Pradhan Mantri Jan Aushadhi Yojana” (PMJAY) has been renamed as
“Pradhan Mantri Bhartiya Janaushadhi Pariyojana” (PMBJP) and “Pradhan Mantri Jan Aushadhi
Kendra” (PMJAK) as “Pradhan Mantri Bhartiya Janaushadhi Pariyojana(PMBJP) Kendras”[49].

Bureau of Pharma PSUs of India (BPPI)[49]:

BPPI is an independent society set up by the Department of Pharmaceuticals, Ministry of


Chemicals & Fertilizers in December, 2008. BPPI’s mission “Is to make generic medicines
available for all”. BPPI is responsible for proper monitoring and functioning of PMBJP Kendras.
BPPI is working under the administrative control of Department of Pharmaceuticals, Ministry of
Chemicals & Fertilizers, Government of India

Progress during 12th Five-year Plan period[49]:

As on end March 2012, only 112 PMBJP Kendras could be opened. To have an accelerated
growth of the campaign, a New Business Plan was released during August 2013 with an
ambitious target of opening 3,000 PMBJP Kendras by the end of 2016-17. The plan also
contained certain changes in the scheme. Still by the end of previous financial year 2015-16, the
number of PMBJP Kendras could reach a level of 269 functional PMBJP Kendras only.

[49]- Department of Pharmaceutical Annual report 2017-18


Revamped Jan Aushadhi Scheme 2015[49]:

Effective implementation of PMBJP has been analyzed through organizing brain storming
sessions and discussions with various stake holders and BPPI submitted their Strategic Action
Plan (SAP 2015) to achieve the objectives set by the Government. Key areas of significance
identified are Availability, Acceptability, Accessibility, Affordability, Awareness and Effective
Implementation of the Scheme. Accordingly, a new Strategic Action Plan was prepared and the
same was approved during September, 2015.

Major changes in Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) Action


Plan:

BPPI have simplified the application format so that a common man can easily fill up the same.
Besides above, the application fee of Rs. 2000/- which was charged earlier have been waived of
to make the scheme popular.

Financial support to PMBJP Kendras[49]:

• For opening PMBJP Kendras in Government Hospital / Medical College / any Government
owned building premises, one-time financial assistance upto Rs. 2.50 lakh is provided.

• For PMBJP Kendras run by pharmacists / NGOs / Charitable Societies / Institution / Self-Help
Groups that are linked with BPPI headquarters through internet (using BPPI provided software)
will get incentive upto Rs. 2.5 lakhs. This will be given @ 15% of monthly sales subject to a
ceiling of Rs. 10,000/ per month upto a total limit of Rs. 2.5 lakhs.

• For north eastern states, naxal affected areas and tribal areas, the rate of incentive will be 15%
and subject to monthly ceiling of Rs. 15,000/- upto a total limit of Rs. 2.5 lakhs.

[49]- Department of Pharmaceutical Annual report 2017-18


• The applicants belonging to weaker sections like SC/ST/Differently abled are provided
medicines worth Rs. 50,000/- in advance within the incentive of Rs. 2.5 lakhs in the form of 15%
of monthly sales subject to a ceiling of Rs. 10,000/- per month upto a total limit of Rs. 2.5 lakhs.

Trade margins to retailers and distributors[49]:

Trade margins have been revised from 16% to 20% for Retailers and from 8% to 10% for
Distributors.

Progress achieved during 2017-18 as on 31st December, 2017:

Availability:

Our basket of products and services is now augmented by adding more medicines reaching a
level of 600+ medicines and 154 surgicals and consumables. Apart from procurement of
medicines from CPSUs, BPPI is supplementing supply by direct purchase of medicines from
private sector companies through open tendering process so as ensure availability of adequate
medicines and to avoid any stock-out situation. BPPI has initiated the required action to take this
figure to 1000 by the end of March 2018.

Supply Chain[49]:

From Suppliers →CWH →C&F Agents →Distributors → PMBJP KendrasIn addition to the
Warehouse at IDPL Complex, Dundahera, Gurgaon, BPPI has established a central warehouse at
HAFED Complex, Near Anaz Mandi, Gurugram to store adequate stock of medicines and also
appointed C&F agents in 8 States and 53 Distributors spread over different states through an
open tendering process. Recently, BPPI appointed M/s. Ethics Infinity Pvt. Ltd. for providing
End to End supply chain management solution system so that direct supplies shall be done
directly from CWH to PMBJP Kendras. BPPI is putting their best efforts for removing stock out
situation at each and every points across the country.

[49]- Department of Pharmaceutical Annual report 2017-18


Acceptability:

To ensure the quality of medicines procured from the CPSUs and private manufacturers for
supplying to PMBJP Kendras, each batch of drugs is tested at BPPI’s empaneled NABL
accredited laboratories thereby ensuring quality, safety and efficacy of medicines and
conformance with required standards. Only after being certified by these laboratories, medicines
are dispatched to C&F agents, Distributors and PMBJP Kendras.

Accessibility:

Number of PMBJP Kendras functioning as on 05.01.2018 has reached 3,041 (spread over 26
States/UTs), out of which 1969 PMBJP Kendras have been opened during the current financial
year 2017-18 i.e. 01.04.2017 to 05.01.2018.By the end of this financial year, BPPI is putting all
out efforts to have its presence in all the States in our country. BPPI is trying to achieve a figure
of 3,000 PMBJP Kendras by the end of March 2018.

Awareness:

The awareness among common people regarding the PMBJP Kendra is very poor. Media
campaigns would play an important role in educating people about use of generic medicines[49].

In this context, BPPI has initiated various steps, especially in those States where the PMBJP
Kendras are now functioning so that people take full advantage of the availability of generic
medicines at affordable prices at the PMBJP Kendras. There are 3,041 PMBJP Kendras
functional at present (as on 05.01.2018), few of which were established earlier[49].

These PMBJP Kendras need to be promoted in an organized way as the awareness is very less.
Limited and non-availability of the medicines was another challenge. It is most important to
create awareness among all stakeholders about the scheme, the business opportunity.

[49]- Department of Pharmaceutical Annual report 2017-18


The store locations and the medicines available with PMBJP Kendras.BPPI intends to create
awareness about PMBJP and its PMBJP Kendras in the towns where PMBJP Kendras are
already established using integrated media platform. Facelift of the PMBJP Kendra is required
with standardized branding across all old stores as well as in the new PMBJP Kendra.Various
publicity channels like print media, visual media, SMS and other direct communication methods
will be taken up. BPPI has already taken part in many exhibitions/workshops, seminars, etc.BPPI
participated in India Pharma, 2016, 2017 and planning to participate with full energy in 2018 to
popularise the noble pariyojana and also to contact many large scale manufacturers for PMBJP
under one roof at Bangalore.

Other factors in ensuring success of the scheme:

The success of this initiative is dependent on other agencies too, such as Ministry of Health &
Family Welfare, different State Governments, active co-operation of Hon. Members of
Parliament, Hon. Members of different Legislative Assemblies, IMA, Hospitals run by Private
Groups and Charitable Institutions, NGOs, Practicing Doctors, etc. State Governments are
having their own schemes like free distribution of medicines. Non-prescription of Generic
Medicines by the doctors is another critical factor. BPPI is continuing its efforts to persuade
Doctors to prescribe only generic medicines. For this BPPI is working in close association with
other Organizations and Government Departments. Seminars/Workshops inviting Doctors,
Scientists, Government Officials and other Stakeholders will be also organized.

Indian Medical Association (IMA) initiative for Pradhan Mantri Bhartiya Janaushadhi
Pariyojana (PMBJP)

Indian Medical Association (IMA) is the collective consciousness of our 3 lakh doctors spread
over 1700 local and 30 State branches. Indian Medical Association (IMA) is for
affordable,accessible and quality healthcare. IMA policy is to prescribe cheapest quality drugs.

[49]- Department of Pharmaceutical Annual report 2017-18


IMA promotes usage of drugs from NLEM and recommends non-NLEM drugs if NLEM choice
is not available. To promote Pradhan Mantri Bhartiya Janaushadhi Pariyojana, IMA has opened a
PMBJP Kendra in its head quarter premises and recomonds such kendras should be opened in all
the IMA building in India[49].

Budgeted Sales:

In the financial year 2016-17, BPPI has done Rs. 33.00 Crores sales at MRP and in the current
financial year 2017-18, BPPI has done Rs. 112.00 Crores sales at MRP till 31.12.2017 and the
projected sale shall be more than Rs. 120.00 Crores sales at MRP by end of this financial year,
which corresponds to approximately Rs. 600.00 Crores of the branded products. PMBJP
ahead:The endeavour of BPPI is to make available at PMBJP Kendras all the commonly used
generic drugs covering all the therapeutic groups. In the coming years, PMBJP shall provide the
complete spectrum of Health care products and services, starting from making available all the
generic drugs covering all the therapeutic groups.

GOVERNMENT ASK DOCTORS TO PRESCRIBE MEDICINES UNDER GENERIC


NAMES [50]

On April 17, while inaugurating a charity hospital in Surat, Prime Minister Narendra Modi
announced that the government intended to move a law to ensure that doctors prescribe
medicines by their generic names only. The proposal has generated a heated conversation in the
media and in the pharma industry

The suggestion that doctors must write prescriptions in generic names is based on the idea that
products sold as unbranded generic medicines are cheaper than others. This premise itself is not
true for all generic medicines all the time. Retail pharmacists, in turn, have little incentive in
stocking and selling low-price generic medicines since they have lower profit margins. Retail
pharmacies have also no interest in selling low-priced branded medicines unless they are fast
moving too.

[50]- https://scroll.in/pulse/835207/indian-government-may-ask-doctors-to-prescribe-medicines-
under-generic-names-is-it-practical
In 2008, the government launched a chain of pharmacies called Jan Aushadhi to supply
inexpensive generic medicines. In the last nine years, only a few such stores have been
operational and they often have had stockouts and other problems. India has seven lakh retail
pharmacy shops and still many rural areas are underserved. There are fewer than 10,000 Jan
Aushadhis. A person seeking these medicines in a city would likely have to go to one of these
few Jan Aushadhi stores negotiating dense traffic in an urban jungle or travel from a village to
the nearby town – all to save a few rupees. This would only make sense for someone buying
medicines for three to six months for a chronic condition like diabetes or hypertension.

GENERICS, BRANDS AND QUALITY

The size of a company does not necessarily ensure that the quality of its drugs is better or is as
per regulatory norms. Quality is a function of how much a pharmaceutical company cares for the
patient and for its reputation. Big products of well-known companies routinely get hauled up by
state food and drug administrations for poor quality or for failing in some parameter listed in the
pharmacopeia [50].

Drug quality can also be affected by factors outside the manufacturer’s control – the transport
from the factory through the warehouse to the trade chain and onwards to storage facilities at the
hospital or at the patient’s home.

The only way that a regulatory authority can systematically ensure good quality of medicines
over a sustained period of time is strict quality control, audits and deterrent punishment of
companies violating regulatory standards. Neither prescribing doctors nor patients can, normally,
second guess the quality of branded or generic medicines without actual testing. .

[50]- https://scroll.in/pulse/835207/indian-government-may-ask-doctors-to-prescribe-medicines-
under-generic-names-is-it-practical
PRICE DIFFERENCE [50]

It is generally true that generic name products are less expensive than their brand equivalents.
Big companies also make generic name products at very competitive prices. Generic medicines
of quality compliant companies work as well as their big branded equivalents, and indeed they
do and why not – for the process of manufacture is the same.

The total domestic pharmaceutical formulations market is about Rs one lakh crore. The market
for generic name medicines is worth about Rs 10,000 crore or 10% of the domestic
pharmaceutical formulations market. Medicines on the National List of Essential Medicines 2015
that are under price control constitute less than 12% of the total market of Rs one lakh crore. A
another four percent of the market are useful medicines that have been put under price control by
the government under Para 19 of the Drug Price Control Order 2013.

At least 90% of the domestic Indian pharmaceutical market, therefore, consists of sale of branded
products. If the government does institute a rule that doctors must prescribe only generic names,
a patient will, in most cases, still end up buying a branded drug because as already pointed out
generic medicines have low margins and therefore unlikely to be stocked by the retail
pharmacist. “This therefore does not ensure that the cost of his medication will come down by
generic name prescriptions” [50].

Doctors could end up writing an “official” prescription of only generic names and write an
“unofficial” one recommending particular brands.

Also the pharmacist cannot legally substitute a generic for a brand, or brand for a generic, or
brand for another brand. This law needs to be changed.

The market for fixed dose combinations is about 45% of the total market and worth about Rs
45,000 crores. To prescribe these medications under generic names, a doctor will have to write
explicitly the generic constituents of the fixed dose combination in every prescription.

[50]- https://scroll.in/pulse/835207/indian-government-may-ask-doctors-to-prescribe-medicines-
under-generic-names-is-it-practical
For example, a doctor writing a prescription for Corex, will have to write chlorpheniramine
maleate and codeine phosphate, or amoxicillin plus clavulanic acid instead of Augmentin. These
are simpler medications. Many fixed-dose combinations like multivitamin products have
between three and 10 ingredients. So for at least for 45 % of the market, the move to get
prescribing doctors to write prescriptions in generic names will be a non-starter.

Duties of doctors [50]

It is for some of these reasons that the September 2016 amendment to the Indian Medical
Council’s Code of Conduct that advises generic prescription by doctors as part of their “duties
and responsibilities”, has gone nowhere. If the intention of the amendment was serious, it should
have stated upfront that it is mandatory for doctors to prescribe by generic names failing which
they would be liable for prosecution. The amendment also does not state that doctors should
prescribe only in generic names.

“In the eight months since September 2016, no doctor has been hauled up for not prescribing in
generic names and not complying with their prescribed duties and responsibilities. Presumably
because nobody made a complaint to the Medical Council of India”[50].

The other requirement of the September 2016 amendment that as part of their duties, doctors
must “ensure that there is a rational prescription and use of drugs” also seems to be a non-starter
again because a significant part of sales are irrational fixed dose combinations.

[50]-https://scroll.in/pulse/835207/indian-government-may-ask-doctors-to-prescribe-
medicines-under-generic-names-is-it-practical
Consumers views on generic medicines :-

Methods -

A literature search was performed from May to October 2008 to identify published studies
related to the views of consumers or patients on generic medicines. In this narrative review, only
studies which measured consumers’ views and perceptions towards generic medicines were
included. Studies that utilized either qualitative or quantitative approaches, or both, were
included in the review. However, we excluded quantitative survey studies with fewer than 50
respondents as their sample. The retrieved literature was abstracted using a standardized data-
abstraction form in a table format containing most of the elements presented in Table 1 and our
selection criteria. “Each study was reviewed by all five authors and a consensus meeting was
convened to ensure quality assurance”[52].

The search strategy involved using Boolean operators for combinations of the following terms:
brand, generic, multisource and medications, medicines, medications, drugs, pharmaceuticals
and consumers, customers, patients. Equivalent terms in thesauruses or Medical Subject Heading
(MeSH) browsers were used whenever possible. The search was limited to full paper articles
published in English between 1970 and October 2008. However, our search was not limited to
prescription-only medicines, but also covered studies involving consumers’ perceptions of non-
prescription medicines. (Electronic databases searched included Medline, Inside Web, ISI Web
of Knowledge, Science Direct, Springer Link, JSTOR, Proquest, Ebsco Host and Google
Scholar)[51]. These searches were supplemented by a hand search of the reference lists in the
reports identified. To determine whether or not reports met the required criteria, the lists of titles
and abstracts from the searches were examined and where doubt remained, the whole paper was
examined. Reports that were identified were arranged chronologically starting from the 1970s
and ending in the 2000s.

[51]-Figueiras JM et al. People’s views on the level of agreement of generic medicines for different
illnesses. Pharm World Sci 2008; 30: 590–594

[52]-Karim SS et al. Potential savings from generic prescribing and generic substitution in South Africa.
Health Policy Plan 1996; 11(2): 198–205.
Results -

Three hundred and eighty two titles and abstracts were identified by three authors from
electronic searches of the nine databases and, wherever possible, a review of the reference lists.
Of these, 313 titles and abstracts not related to consumers’ views on generic drugs and duplicated
citations were examined and excluded. “The full text of 69 articles was retrieved and distributed
among the five authors for further assessment”[53].

All authors agreed that 41 of the 69 manuscripts did not really assess consumers’ or patients’
knowledge of and views towards generic medicines and therefore were not suitable for inclusion
in the review. The majority of these were largely looking at the clinical effectiveness of generic
medicines or other clinical perspectives. Thus, 28 studies were potentially appropriate for
possible inclusion in the review. However, eight observational quantitative studies with a
relatively small sample size (less than 50) were also eliminated. In the final review, 20 studies
which satisfied the selection criteria were included in the analysis. The quorum flow chart for
this review is shown in Figure 1.

Here we provide a narrative review of the studies conducted during the last four decades in a
chronological order.

Inclusion criteria –

To be eligible for inclusion in the review, studies had to include quantitative data presented as
proportion of participants holding perceptions about generic medicines along any of the relevant
dimensions. Studies could be either cross-sectional, mixed method or prospective in design.
“They also had to be in English, published in or after 1980, and had to include self-report
measures to evaluate general perceptions about generic medicines, presented as percentages of
the total sample assessed”[53].

[53] - Dunne SS, Shannon B, Cullen Wetal. Perceptions and attitudes of community pharmacists towards
generic medicines. J Manag Care Pharm 2014;20:1138–46. [PubMed]

https://onlinelibrary.wiley.com/doi/pdf/10.1211/ijpp.17.02.0002
Data sources and searches –

A systematic search of databases (MEDLINE, EMBASE, PsycINFO, Scopus) was conducted on


6 September 2015, to retrieve relevant peer reviewed articles. The search strategy (see online
supplementary appendix 1) employed for this review drew on common phrases and terms used in
the literature concerning generic medicines, and included input from a specialist librarian.
Keywords (appropriately truncated to allow a wide search) were combined with medical subject
headings (MeSH) to comprehensively search four databases. “The strategy was modified for
Scopus due to a different search platform. Hand searching was not performed, but reference lists
of identified systematic reviews and narrative reviews were reviewed to identify further
studies”[54].

Data Collection –

One author (SC) reviewed the titles and available abstracts for all identified citations, to
determine relevance. Following the initial review, two of the authors (SC and MHS)
independently reviewed full-text publications to make a final selection of included studies. A
structured Excel spreadsheet was used to record relevant information and ensure uniformity of
evaluation for each study. Extracted data included study characteristics including country of
origin, sample type (doctor, pharmacist or lay population), sample size and proportions of
participants with negative perceptions of generic medicines. The primary outcomes of this
review were the proportions of participants reporting perceptions about generic medicines in
terms of generic substitution, effectiveness, quality, side effects and safety.

Quality assessment –

Two reviewers (KF and LRM) independently examined the full-text publications to complete a
quality assessment. Raters independently categorised the articles as high, acceptable or poor
quality, based on an evaluation of study design, participants (N, and type), demographics,
recruitment method (random or other), exclusionary criteria, method of assessing perceptions
(interview, questionnaire) and question quality (clarity, appropriate response options) (see online
supplementary appendix 2). Consensus between the two reviewers was used to resolve any
disagreement. Studies that were classified as being of poor quality were subsequently
excluded.”[54]

[54]- https://onlinelibrary.wiley.com/doi/pdf/10.1211/ijpp.17.02.0002
In line with Cochrane recommendations, we chose not to use a standardised scoring system to
assess study quality. “Calculating a summary score was not carried out so as to avoid assigning
‘weights’ to items on the scale that were unlikely to accurately reflect their relevance and that
may have changed across different studies”[54]

The 1970s –
Early studies on generic drugs examined attitudes, perceptions of risk and knowledge of and
satisfaction with generic medications, and compared the views of consumers, physicians and
pharmacists. Most of these studies were conducted in the United States.

The first study retrieved and included in the review was by Lambert et al.[11] This study was
done in Florida to assess the predisposition of 510 consumers to acceptance of generic drugs. In
this study, it was observed that approximately 66% of the respondents rejected lower-cost
generic alternatives, regardless of the amount of savings suggested. Those rejecting generic
drugs were older and had higher incomes, and they perceived generic medicines as less effective
than did those accepting the drugs. The researchers examined the effect of 18 variables on the
predisposition towards generic drugs and found only two variables to have significant effect. The
first was age, which showed that older respondents were more reluctant to switch to generic
alternatives. “The second was perceptions of effectiveness, with rejecters perceiving low-priced
drugs to be less effective in relieving an illness”[55].

Bearden and Mason,[10] in a study published in 1978, surveyed 105 consumers regarding their
attitudes towards the risks involved with the use of generic medications. As a framework for this
study, the investigators used Fishbein and Ajzen’s theory of reasoned action, which postulated
that an individual’s attitude towards an action is based on the summation of his or her beliefs
about the consequences or risks of the behaviour and weighted by the perceived value of these
consequences. “Risks were represented by the probability and importance of loss across six
dimensions: financial, social, drug performance, psychological, physical and convenience. The
investigators examined consumers’ beliefs about and evaluations of the quality, price, safety,
adverse effects and efficacy of generic medications, as well as the reputations of generic drug
manufacturers”[55].

[55]- https://onlinelibrary.wiley.com/doi/pdf/10.1211/ijpp.17.02.0002
Approximately one-third of the consumers surveyed were negatively inclined towards the use of
generic drugs, one-third were positively inclined and the remainder were neutral. Those opposed
to generic substitution perceived higher risk levels for each of the six dimensions and considered
those risks to be more important than did those favouring generic substitution practices. “The
latter believed that generic drug products were high in quality, safe and produced by reputable
manufacturers, and that they would have the intended results. Further analyses indicated that
consumer preferences (negative, positive and neutral) regarding the purchase of generic drugs
were influenced by their concerns about drug performance, potential financial loss and
safety”[56].

[56] -https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4679988/
The 1980s –

To supplement the findings from their previous research,[10] Mason and Bearden conducted
another study to explore salient issues affecting prescribing, dispensing and use of generic
medicine.[12] Consumers did not feel that they would face greater risks if prescribing generic
drugs became a practice[57]. Although neutral on generic substitution practices by pharmacists,
they believed that prescribing generics would maintain a steady and continued supply of drugs.
They endorsed the idea that generic drugs would produce the intended therapeutic effects, but
showed hesitancy in utilizing drugs produced by unknown manufacturers and agreed that the
high prices of branded drugs were due to high expenditure on advertising to encourage
physicians to prescribe brand-name products.

Overall, consumers seemed supportive of generic drug prescribing and substitution because they
believed this would result in them saving money. The authors concluded by emphasizing the role
of educating physicians early in their career about generic prescribing and the viable role other
health professionals, such as pharmacists, can play in health care[57].

In a 1988 study involving 621 consumers in Austin and San Antonio, Texas, USA, 33% of those
interviewed had never purchased generic prescription medications.[13] Consumers felt that,
compared with branded drugs, generic drugs were of lower quality, more risky, less effective and
less healthful. Yet, contrary to findings from previous studies, individuals older than age 55
years thought that generic drugs were of higher quality than did younger respondents.

A study conducted by Tootelian et al. in 1988,[14] which focused on 389 college students and
their perceptions of eight types of prescription medication, found that branded drugs were
viewed as being more effective, having less potential for adverse effects and providing greater
value than their generic counterparts. The greater the perceived risk of the prescription drug, the
greater the respondent’s inclination to view the brand medication more favourably. Age may
have influenced the views of this group, since more than 85% of individuals in the sample were
30 years or younger.

[57] - Ferner R, Lenney W, Marriott J et al. Controversy over generic substitution. BMJ 2010;340:c1341–
3. 10.1136/bmj.c1341 [PubMed] [CrossRef]
Furthermore, in a study of 100 consumers in the Chicago area, published in 1989, the majority of
consumers replied that generic medications were equal in quality to their brand-name
counterparts.

Almost all the consumers surveyed said they would feel confident about a generic drug if a
physician or a pharmacist recommended it. Although consumers knew what generic drugs were,
had positive experiences with them and thought they were equal in quality to brand-name
products, they were less likely to take them for chronic and serious conditions. The authors
concluded that the influential variable in consumers’ attitude towards generic drugs may have
been their perception of their illnesses and not that of the generic products[58].

The factors that influence generic substitution, satisfaction and intention to purchase generic
drugs surfaced again in a field experiment involving 295 patients who had obtained prescriptions
for one of two brand-name products at one chain pharmacy in Vancouver, British Columbia,
Canada.[58] More than 80% of the patients offered a generic substitute for one of the study drugs
accepted it. Patients who were older, less educated and had prescription drug coverage were less
likely to accept a substitute. Satisfaction with generic drugs was lowest for those who had no
choice in their use and did not have to pay anything to receive the medication[58].

Intention to purchase another generic drug product in the future was influenced by having
recently accepted a generic substitute, perceiving that the cost savings would be high and having
to pay some or all of the cost of the medication. As did previous authors, Kendall et al.
concluded that having pharmacists actively promote generic drugs and having patients pay some
part of the cost of the medication would increase the rate of generic substitution.

[58] - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4679988/
The 1990s -

A study conducted by the American Association of Retired Persons (AARP) and published in
1994 found that more than 84% of consumers were familiar with the term generic drug.[17] The
author of the study estimated that approximately 33% of Americans aged 45–65 years had asked
their physician for a generic medication and asked their pharmacist to fill a prescription with a
generic medication. However, a slightly lower proportion (29%) of those aged 65 and older were
likely to request a generic version of a drug from their physician or pharmacist.

In 1994, a survey by Muirhead examined how 876 consumers across the USA viewed managed
care and generic medications. Approximately 40% of respondents reported that they were likely
to request generic substitution. The findings indicated that 34% of pharmacists and 36% of
physicians had initiated generic substitution on consumers’ behalf. Generic products were
considered ‘equal’ in quality to brand-name products by 29% of consumers, and 45% indicated
that the two were ‘about the same’. Patients with lower incomes were more likely than higher-
income individuals to view generic drugs as lower in quality[59].

A study of consumers conducted in 1995 but published in 2000 rekindled the concept of risk
with the use of generic medicines. Ganther and Kreling surveyed 355 adults in central
Wisconsin, USA, and found that consumers’ perceptions of the risks of generic prescription
drugs depended on the medical condition being treated. Study participants were asked to assess
the comparative risk associated with purchasing a generic drug instead of a brand product for
heart problems, high blood pressure, streptococcal throat infection, pain and cough. Respondents
thought that substituting generic prescription drugs was riskiest when treating heart problems
(54%) and least risky when treating streptococcal throat infection (14%). Respondents also
indicated the amount of savings they would require before they would accept a generic version
of a drug instead of the branded product. As the risk rating for the medical condition decreased,
more respondents were willing to take the generic product for less than a US$2 cost saving. As
the risk rating increased, so did the percentage who wanted a cost savings of more than $15
before they would buy the generic drug or who would not buy the generic product at any cost
saving. The authors concluded that financial incentives might be important to increasing
consumers’ use of generic products.

[59] -Muirhead G. How consumers see managed care. Drug Topics 1994; May: 40–54.
The 2000s –

Momani et al., [20] in a study published in 2000, investigated consumer awareness of drug-
management strategies (formularies, drug co-payments, prior authorization and generic
substitution)[60]. This mail survey was sent to 303 members of managed care organizations in
Maryland, Pennsylvania and West Virginia, USA. Approximately 51% of the respondents
indicated that their health plan mandated generic substitution. Consumers agreed that generic
substitution affected their compliance with medications. In addition, consumers were neutral in
regard to the following statements: ‘generic substitution makes it more convenient to get my
medicines’ and ‘generic substitution limits my chances to get the best medicine’. Consumers
agreed mildly with the statements ‘generic substitution results in less effective medicines’ and
‘generic substitutions compromises the quality of my medicines’. Although these statements
reflected a slightly negative view towards generic substitution, when consumers were asked a
general question regarding their overall attitude towards generic substitution, a somewhat
positive response was obtained (mean ± SD = 4.6 ± 1.99 on a seven-point scale where 1 is
negative and 7 is positive). “The authors concluded that, overall, this group of consumers held a
slightly positive attitude towards generic drugs and were most aware of generic substitution and
drug co-payments as means to manage drug costs” [60].

In Spain, where the implementation of drug patent legislation was introduced in late 1997 and
generic drugs shared only 0.15% of the Spanish drug market, Valles et al.[21] assessed patients’
acceptance of the substitution of brand-name drugs for generic drugs for chronic conditions in
primary health care practices. A prospective randomized multicentre study was conducted over a
12-month period in which patients taking medications for chronic disorders received an
educational intervention on generic drugs at the time they attended different general practices in
the city of Barcelona for repeat prescribing. Twenty-seven public primary care centres were
randomized to the intervention group (eight centres) or the control group (19 centres). Of 4620
patients in the intervention group who received verbal information and handout materials on the
advantages and disadvantages of generic equivalents and brand-name drugs, 98.9% agreed to
receive a generic formulation.

[60] - Dunne SS, Shannon B, Cullen W et al. Perceptions and attitudes of community pharmacists
towards generic medicines. J Manag Care Pharm 2014;20:1138–46. [PubMed]
The primary care centre and the class of drug were associated with statistically significant
differences in the percentage acceptance of generic drugs. In the overall population, generic
prescribing in the intervention practices increased to 5.9% as compared with 2.8% in controls.
Individual educational intervention in patients with repeat prescribing resulted in a high rate of
generic acceptability.

In the context of developing countries, only one study, which was conducted in Brazil, was
retrieved.[61] In this study, the authors estimated the proportion of generic drug use from the total
of medicines used, assessed the population’s knowledge of generic drug characteristics and
studied the most common criteria used by consumers for purchasing medicines. A representative
household sample was selected, making a final sample of 3182 individuals. Data were collected
using a structured interview. Interviewees were asked about the utilization of any medicine in the
previous 15 days and requested to show the packaging and prescription, and according to these
packages drugs were classified as branded or generic. Population knowledge of generic drug
characteristics were assessed by asking the following questions:

(a) Does the generic drug cost more, the same or less than the brand-name drug? (b) Is the
quality of generic drugs better, the same or worse than that of brand-name drugs? (c)
What does the generic drug packaging contain that differentiates it from other drugs?
Strategies for choosing preparations when purchasing a medical prescription were
investigated for the last purchase in the previous 15 days, or the habitual strategy for
interviewees who had not purchased medicines during that period. Interviewees were
asked whether they (a) buy (or always buy) exactly the prescribed medicine, (b) replace
(or usually replace) the prescribed drug with the corresponding generic one, (c) replace
(or usually replace) the prescribed drug with a formulated product and (d) replace (or
usually replace) the prescribed drug with a lower-priced alternative, regardless of whether
it was a generic, formulated or similar drug[61].

[61] -https://onlinelibrary.wiley.com/doi/pdf/10.1211/ijpp.17.02.0002
(b)
“Findings showed that the proportion of generics in total medicines was 3.9%. While
86% knew that generic drugs cost less and 70% knew that the quality is similar to brand-
name medicines, only 57% knew any packaging characteristics that distinguish generic
medicines from other ones. The authors concluded that the most important determinants
in choosing medicines are price and the medical prescription, as the majority of
individuals reported buying exactly what was prescribed”[62].

“In a recent Australian study,

[23] the researchers used a qualitative approach to explore consumers’ perceptions and opinions
of generic medicines and to identify barriers to their use of generic medicines. The researchers
interviewed 16 consumers aged 22–80 years, living in the metropolitan area of Melbourne,
Australia, and using thematic content analysis they identified four themes related to generic
medicine utilization[62].

These were: knowledge about generics, acceptance of generics, non-acceptance of generics and
educational needs pertaining to generics. In this study, it was found that most patients were not
familiar with the term generic medicine but they were more familiar with the term cheaper brand
of medicine. The major reason for acceptance was cost, and the major barriers to acceptance
were influence from medical practitioners, side effects from generic brands and confusion from
using different brands. Finally, the authors concluded that consumers generally had positive
attitudes towards the use of generic medicines and suggested that direct patient education by the
health care providers on issues relating to safety and efficacy of generic medicines could further
enhance their uptake”

[62] -Carroll NV. Impact of generic and therapeutic interchange incentives on community pharmacy. Am
Pharm 1995; NS35(7): 27–34.

[62] -Kirking DM et al. Economics and structure of the generic pharmaceutical industry. J Am Pharm
Assoc (Wash) 2001; 41(4): 578–584.
Discussion –

“This review encompassed 20 studies on consumers’ views and their perceptions of generic
prescription and non-prescription medicines. Based on the review undertaken, the majority of the
consumers have mixed reactions towards the acceptance of generic medications. Although a
positive attitude seems to have remained fairly stable across the years, as approximately 40–60%
of consumers from the studies reviewed held favourable views about generic medications, a
positive attitude does not necessarily translate to increased use of generic drug products. In a
Florida-based study”
“[11] irrespective of the cost savings, 66% of the older respondents, even those with lower
incomes, rejected lower-cost generic alternatives and cited them to be less effective. The studies
we reviewed indicated several probable reasons for this discrepancy. For example, differences
were found according to the economic development of the country, whether a developed or
developing nation. Except for two studies from Brazil[22] and Malaysia,[29] no other studies
were retrieved regarding consumers’ views about generic medications in developing countries. In
developing countries where approximately 77% of medicine expenditures are out of pocket,[30]
low cost is an important advantage of generic drugs[31]”

This review has managed to contribute substantial additional information on consumers’ views
about generic medicines, depicting the diversity across different countries, in addition to what
has not been reported in the literature.[32] The narrative review was not intended to be
exhaustive, but merely an attempt to examine the general trend of consumers’ views towards
generic medicines over time. However, the review has a number of limitations. Most notable was
the limitation of access to databases subscribed to by our university library; as a result, important
studies available through other databases might have been missed. Another major drawback was
that studies published in languages other than English were excluded from the review.

This review has reaffirmed that the pharmaceutical reimbursement system implemented in a
particular country has an effect on consumers’ use of generic drugs. If a third party pays for the
medication or if there were no differences in co-payments between branded and generic drugs, a
branded product is preferred. Consumers tended to look more favourably on generic medications
as the difference in co-payments increased.

[63] -
“It is worthwhile to mention that implementation of policy changes, such as the adoption of new
legislation for drug patenting in Spain[21] and the adoption of a policy on generic drugs in
Brazil,[22] would result in more positive views of consumers towards generic medicines.
Likewise, the findings from the study conducted in Portugal[27] are in line with the study of
Ganther and Kreling[19] which showed less inclination towards and acceptance of generic drugs
by patients with serious illnesses.”

“Furthermore, demographic and socioeconomic characteristics of consumers have an effect on


their views of generic drug products. Among these characteristics we identified the following:
income, education level, ethnicity, age, gender and chronicity of the medical condition. In
general, individuals with lower incomes and less education held more negative attitudes towards,
and were less knowledgeable about, generic drugs than were those with higher incomes and
more education. Also, low-income non-white seniors mistrusted generic medicines.[28] The
influence of age was mixed. Several studies indicated that older consumers held more negative
views, but others found that younger individuals held more negative views. This may mean that
there is a segment of the population (young and old) that is brand-conscious and will always
view non-branded (generic) drug products with some suspicion[64].

In addition, drug product characteristics have important influences on consumer views of generic
drug products. Among these characteristics are price, perceived quality, perceived effectiveness
and manufacturer reputation. Price of generic drugs is the reason for them to be considered in the
first place and the potential savings by consumers play the main role in the spread of generic
drugs.[31] Perceived quality, safety, effectiveness and manufacturer reputation are
proportionately related to the acceptance of generic drugs and therefore to their increased usage.

Similarly, consultation with health care professionals regarding generic medications seems to
influence their use. When consumers had talked with their health care professionals about a
generic substitute, and these had positive views about generic medicines, the drugs were more
likely to be accepted or used.”

[64] -https://onlinelibrary.wiley.com/doi/pdf/10.1211/ijpp.17.02.0002

[64] -https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4679988/
“It was also found that past experience and knowledge of generics, and the risks associated with
them, were all important influences on consumers’ views of generic drug products. Several
studies found that the use of generic products (non-prescription drugs, groceries, etc.) in the past
and knowledge or awareness of generic drugs were important influences on current or future use.
Also, the more serious or risky a consumer believed a medical condition to be, the less likely he
or she would be to choose or accept a generic drug product for treatment.[27,32] Finally, the
prescription itself has a substantial effect on use of generic drugs, especially in developing
countries where patients seek to buy exactly what is prescribed.”[65]

[65] -http://www.who.int/trade/glossary/story034/en/ (accessed 18 Mar 2014).

Wong ZY, Hassali MA, Alrasheedy AA et al. Patients’ beliefs about generic medicines in
Malaysia .Age 2014;12:474. [PMC free article] [PubMed]
Perceptions of Generic Medicines :-

Effectiveness -

“A significantly greater proportion of the general population held the view that generic drugs
were less effective than their brand name equivalents (5274/14 817; 35.59% (95% CI (34.83% to
36.37%)), compared to doctors (1450/5056; 28.68% (95% CI (27.45% to 29.94%)),
χ2 (1)=80.22, p<0.0001) and pharmacists (264/1119; 23.60% (95% CI (21.20% to 26.18%)),
χ2 (1)=65.57, p<0.0001). The proportion of physicians who held these negative views was
significantly greater than pharmacists, χ2 (1)=11.57, p=0.0007 (see figure 2 for graphical
representation of results)”[66].

[66] -https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4679988/
Quality –

“At least 25% from each group reported the belief that the quality of generic medications is
lower than that of branded drugs. Pharmacists reported the highest proportion of negative
perceptions about quality (465/1392; 33.39% (95% CI (30.96% to 35.91%)), a significantly
greater proportion of negative perceptions than in either the physician sample (625/2406; 28.04%
(95% CI (26.28% to 29.87%)), χ2(1)=11.76, p=0.0006) or the general population (2290/9119;
25.11% (95% CI (24.23% to 26.01%)), χ2(1)=42.51, p<0.0001). Physicians and general
population participants did not differ significantly from one another (after applying the
Bonferroni correction), χ2 (1)=8.47, p=0.0036”[67].

Safety –

“A greater proportion of doctors (836/2928, 28.54%, 95% CI (26.93% to 30.20%)) and


pharmacists (103/404; 25.44%, 95% CI (21.43% to 29.91%)) held the perception that generic
medicines were less safe to use than branded drugs than did the general population (942/5242;
17.97%, 95% CI (16.96% to 19.04%)), χ2 (1)=122.93 and 13.59, respectively, p<0.0001 and
0.0002. Physicians and pharmacists did not differ from one another with regard to negative
perceptions of safety of generic drugs, χ2 (1)=1.49, p=0.22.

Side effects –

Physicians were the most likely to hold negative beliefs that side effects are more frequently
caused by generic drugs in comparison to brand name alternatives, with one in four (316/1292;
24.43%, 95% CI (22.17% to 26.85%)) endorsing these views. Physicians held significantly more
inaccurate beliefs about side effects than did the general population groups (1054/5618; 18.76%,
95% CI (17.76% to 19.80%)), χ2(1)=21.09, p<0.0001, and pharmacists (174/991; 17.56% (95%
CI (15.31% to 20.06%)), χ2 (1)=15.43, p<0.0001. There was no significant difference between
the proportions of members of the general population and pharmacists reporting the perception
that the side effects of generic drugs are higher than branded, χ2 (1)=0.73, p=0.3934”[67].

[67] - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4679988/
Drug substitution –

“Pharmacists had the lowest rates of negative perceptions about substitution of generic drugs for
their brand name alternatives (179/1622; 11.04%, 95% CI (9.60% to 12.66%)). The general
population were most likely to report unfavourable attitudes towards substituting a branded
medication with its generic equivalent (3874/11 386; 34.03%, 95% CI (33.16% to 34.90%)),
followed by physicians (341/1414; 24.11%, 95% CI (21.95% to 26.41%)). Pharmacists had
significantly lower rates of negative perceptions about generic drug substitution than both,
members of the general population and doctors, χ2 (1)=348.72 and 90.14, respectively, p<0.0001.
The general population samples held more negative perceptions of drug substitution than did
physicians, χ2 (1)=55.46, p<0.0001”[68].

Perceptions of generic medicines over time –

“There was no significant overall relationship between publication year and the percentage of
participants reporting negative perceptions of generic medicines across all participant groups and
perception domains, r=−0.04, n=115, p=0.641. Similarly, the percentage of negative perceptions
held across the five domains did not demonstrate a significant correlation with publication year
for beliefs about effectiveness, r=−0.03, n=37, p=0.853; quality, r=−0.02, n=25, p=0.919; safety,
r=−0.20, n=18, p=0.424; side effects, r=0.08, n=20, p=0.742; or appropriateness of substitution,
r=−0.11, n=15, p=0.693. Finally, the change in the percentage of negative perceptions over time
was assessed separately across the three participant groups. There was no significant correlation
between negative perceptions and publication year for general population samples, r=0.10, n=60,
p=0.431; or physicians, r=−0.04, n=37, p=0.794. There was a trend (after applying the
Bonferroni correction) towards a significant correlation in pharmacists’ overall negative
perceptions and publication year, r=−0.50, n=18, p=0.034. Although the result is not statistically
significant, it indicates a possible reduction in overall reported negative perceptions in
pharmacists over time”[68]

[68] -Brust M, Hawkins CF, Grayson D et al. Physicians’ attitudes toward generic drug substitution by
pharmacists. Tex Med 1990;86:45–9. [PubMed]
“The Indian pharmaceuticals market is the third largest in terms of volume and thirteenth largest in terms
of value, as per a report by Equity Master. The Indian Pharmaceutical market (IPM) accounts for
approx.1.4% of the global pharmaceutical industry in value terms and 20% in the volume terms.1,2
Generic drugs are currently the highest earners within India’s pharmaceutical industry, accounting for
70% of market share by revenues. Over-the-counter drugs follow at 21% of revenues and patented brand
name drugs at 9%.3 Brand name medicine is originally discovered and developed by a pharmaceutical
company. Brand name medicine is approved by FDA by submitting a New Drug Application along with
data regarding proof of characteristics of dosage form, manufacturing, chemistry, stability, efficacy,
safety, labeling and packaging. After approval by FDA only, the innovatory
company can exclusively market this brand name medicine for a period of patent protection (about
20years or as specified). Brand name medicine is generally sold at high cost to cover expense in research
and development of drug. Branded medicines are strongly promoted through doctors and chemists, which
add to their retail prices”[70].

“A generic medicine is one that is comparable to an innovator medicine in dosage form, strength, route of
administration, quality, performance characteristics and intended use. When patents or other periods of
exclusivity on brand-name drugs are near expiration, manufacturers can apply to the FDA to sell generic
versions by separate name called branded generic. If drug is manufacture and sold by its original name is
called pure generics. For both, submission of Abbreviated New Drug Application with data regarding
bioequivalence study as a proof that the generic version deliver the same amount of active ingredients into
a patient’s bloodstream in the same amount of time as the innovator drug.

All other data require are same as innovator drug product except preclinical and clinical data regarding
safety and efficacy of medicine. Generic and branded drugs may be identical in formulations but differ in
certain other characteristics such as shape, release mechanisms, packaging, excipients, expiration
date/time and minor aspects of labeling and storage conditions. Drug Price Competition and Patent Term
Restoration Act of 1984, also known as the Hatch-Waxman Act allowed for the approval of generic
copies of many approved drug after the patent had expired. As the cost of development is not involved
Generic medicine is much cheaper than the branded one. In India, 90% of branded generics share in the
~1-lakh-crore market.4 India is the largest provider of generic drugs by exporting in more than 200
countries with the 20 per cent of global exports of generics in terms of volume. With flourish of generic
market, now battle for better drugs is going on in India”[70].
“The global generic drugs market is expected to grow at a compounded annual growth rate of 10.53%
from 2016 through 2020. In fact, according to a report, the global generic drugs market will benefit from
the patent expiry of drugs worth $150billion by 2020.6 This will attract pharma companies all over the
world to produce generic medicines. Prescribing by generic names is justified because if brand names are
used and that particular brand is not available in the drug store, the pharmacist will have to refer drug
indexes like CIMS etc.”

“When patents or other periods of exclusivity on brand-name drugs are near expiration, manufacturers
can apply to the FDA to sell generic versions by separate name called branded generic. If drug is
manufacture and sold by its original name is called pure generics. For both, submission of Abbreviated
New Drug Application with data regarding bioequivalence study as a proof that the generic version
deliver the same amount of active ingredients into a patient’s bloodstream in the same amount of time as
the innovator drug”.

[69] - Friedman D, Jaffe A, Steinhardt S. Physicians’ attitudes toward and knowledge about generic drug
substitution. N Y State J Med 1987;87:539–42. [PubMed]

[70] - . https://www.equitymaster.com/research-it/sector-info/pharma/Pharmaceuticals-Sector-Analysis-
Report.asp
“(CIMS-Current Index of Medical Specialties) to find out the ingredient and then
dispense from the available stock. This will lead to waste of time and may also lead to errors in
case the wrong drug ingredient is dispensed.7 India is densely populated country. Drug pricing is
a major issue in India. In India, where very few people have health insurance, 70% of Indians
pay for healthcare expenses out of their own pockets. With the rising healthcare costs, the
interest in generic drugs has increased almost all over the world whether it is a rich or a poor
country[71]”.

“Also, there is a big difference between generic and brand name drugs in India. India is well
known for importing low cost quality generic medicines to more than two hundred countries in
the world. At home, however, India faces the challenge of equal access to affordable and quality
essential medicines for its own population. Drugs and Cosmetics Act, 1940, Drug Price Control
Order 1995 regulate quality and price control of drugs respectively in India. National
Pharmaceutical Pricing Authority (1997), which is presently working under the Department of
Pharmaceuticals (DoP) in the Ministry of Chemicals and Fertilizers has been entrusted the
responsibilities of drug policy, medicine price control, monitoring of drug prices and related
affairs. Central Drugs Standard Control Organization (CDSCO) under Ministry of Health and
Family Welfare is the main authority controlling drug related issues in India”[71].

“In India, poor accessibility and affordability of people, impose use of generic drugs to minimize
cost of treatment. Government of India started several attempts in this direction. Department of
Pharmaceuticals, Government of India, had launched the ‘Jan Aushadhi Campaign’, in April,
2008, to provide quality generic medicines at lower prices than their counterpart branded ones
available in the market. In the 2016- 2017 budgets, Government of India has made the goal of
opening of 3000 “Jan Aushadhi Stores” across the country. On October 12, 2012 Government of
India issued directions that the drugs will be sold under their generic name rather than their brand
names.

This directive created confusion regarding choice of branded generics because almost 90%
drugs in India are known by their branded generic name. Narendra Modi, Prime Minister,
government of India plans to make it mandatory for doctors to prescribe puregeneric drugs,
instead of branded generics as they do now. The health ministry of India has now started
working on amending the Drugs and Cosmetics Act to this effect. The health ministry has
recently issued a draft gazette notification making it mandatory for pharma companies to carry

.
generic name of drugs on packs that is at least two fonts larger than the brand name. Besides, the
ministry has also issued orders to the Medical Council of India (MCI), state governments and all
central government hospitals asking them to ensure that doctors write prescriptions with generic
names of medicines in legible hand writing.9

Government of India started several attempts in this direction. Department of Pharmaceuticals,


Government of India, had launched the ‘Jan Aushadhi Campaign’, in April, 2008, to provide
quality generic medicines at lower prices than their counterpart branded ones available in the
market. In the 2016- 2017 budgets, Government of India has made the goal of opening of 3000
“Jan Aushadhi Stores” across the country. On October 12, 2012 Government of India issued
directions that the drugs will be sold under their generic name rather than their brand names”.

[71] – Generic drugs form the largest segment, Indian Pharmaceutical Industry, India.
Barriers to move towards generic drugs in India

A) “In developed countries such as the US, only patented drugs are sold under a brand, which is
marketed through their ties to doctors. Off-patent drugs are sold only as pure generic, without
using any brand name. It helps in making pure generics cheaper. But in India, most of the generic
drugs are sold as their brand name (brand generics)”[72].

B) “Commission on sales of brand name drug is much higher for everyone in the supply chain.
Since the generics are priced considerably lower, the revenue earned by everyone in the supply
chain is lower. So brand sellers in India could prevent government’s move to generics.

C) Despite stringent price control, big pharma companies manage to spend exorbitantly on
marketing and branding of their drugs. Since advertisement of prescription medicines are not
allowed in India, companies or medical representatives push their products through doctors,
chemists and distributors in lieu of freebies, junkets and incentives.

D) In India, Quality of generic drugs is not considered at par as brand name drugs. For obtaining
quality standard of brand drugs, generic producers will have to invest in equipments and
necessary approval process which may increase the cost of generic drugs.

E) Also, in developed countries like U.S., community pharmacists play an important role in
dispensing medicines and hence their cost awareness becomes crucial. But in India, the concept
of community pharmacists doesn’t exist and hence the onus for cost reduction, from the point of
view of drug selection, lies with the doctors and doctors have poor knowledge of cost of
different brands. This can reduce sells of economic generic drugs.

F) If the doctor prescribes only a generic name, it will be left to the chemist to decide which
particular brand to push. Further, Generic producers may supply with questionable quality in
shortage unless government frame policy with appropriate penalties. Also, proposal of writing
generic name in prescription will make difficult to prescribe combination drugs or drugs with
multiple ingredients”[73].
“In addition to this, guidance of physician is required while patient switching to generic drugs
from brand name drug with narrow therapeutic index (antiepileptics, antiarrhythmic, thyroid
hormone, lithium, etc). Monitoring is also required for first couple of weeks afterwards. Some
patients may have allergies or intolerances to excipients such as lactose, gluten, sulfites or
tartrazine. Although the active ingredients are the same, the excipients (inactive ingredients) may
differ.

The concept of community pharmacists doesn’t exist and hence the onus for cost reduction, from
the point of view of drug selection, lies with the doctors and doctors have poor knowledge of
cost of different brands. This can reduce sells of economic generic drugs. Also, proposal of
writing generic name in prescription will make difficult to prescribe combination drugs or drugs
with multiple ingredients”[73].

[73] - http://www.mapsofindia.com/my-india/society/generic-drugs-in-india- -more-awareness-required .


http://timesofindia.indiatimes.com/india/law-soon-to-ensure-doctors- -prescribe-cheaper-generic-drugs-
assures-pm/articleshow/58231392. cms
“This is only important in rare cases when a patient has an allergy or sensitivity to one of the
excipients. In present scenario, Generic drug is looking best option for India but progressive
changes require in mentality of Indian people to adopt this truth. Besides this, there is greater
need for a harmonized drug regulation globally for overall growth of pharmaceutical sector.
Major goal of patient care should be accessibility and availability of quality health care service
and infrastructure. Incentive and tax relief to research are require to promote betterment of
human health. Through use of cost effective and sustainable technology and methods,
entrepreneurs must reduce the cost of drugs”.

“Critical appraisal and synthesis

While no papers were excluded based on a subjective assessment of the quality of the reports –
as per criteria described in the journal Nature Clinical Practice [74] (specifically, the
recommended criteria include: relevance of the paper to the topic; whether the paper contributes
new knowledge; type of research questions being asked; whether the study design is appropriate;
has the potential for bias been addressed; was the study completed as per protocol; did the study
test a stated hypothesis; was the statistical analysis appropriate; do the data justify the
conclusions drawn; and has potential conflict of interest been identified) and the Critical
Appraisal Skills Programme (CASP) checklist [75] – emphasis was placed broadly on what the
key results were, whether the results were valid and whether the studies were relevant to the
topic of stakeholder perceptions of generic medicines.

Data were extracted from the included articles. Patient, physician and pharmacist perspectives
were defined as first-order constructs, and the authors’ interpretations of these constructs were
defined as second-order constructs.”

[74] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4520280/

[75] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4520280/
“Review of reported methodologies
The methodological approach most commonly observed in the research appraised in this review
was the self-administered questionnaire or survey, where dissemination either by post or online
methods appeared to be the most frequent routes of questionnaire provision to participants. The
conducting of such research by qualitative means (for example, by interview or focus group) was
also identified, albeit that such reports were found in smaller numbers.

It is notable that only three physician-specific qualitative research papers were found: studies of
GPs’ views in Pakistan; Australia; and Ireland, which described the outcome of interviews with
11, 10 and 34 participants, respectively. [76]

In the case of pharmacists, only two interview-based studies were found: 16 participants were
interviewed for a study in Sweden; and 44 for a study in Ireland [77]. In research into patient
views, five interview-based studies of the opinions of patients were found from Iraq [78], The
Netherlands , Norway and Ireland, which interviewed 14, 106, 83, 174 and 42 participants,
respectively. Four focus group studies from South Africa, the USA and Australia, which had 73,
30, 50 and 104 participants, respectively, were found. Additionally, one mixed-subject
qualitative study, which conducted focus groups with 73 consumers and semi-structured
interviews with 15 healthcare professionals (six each of which were physicians and pharmacists),
compared consumers’ and professionals’ opinions, along with in vitro testing of a small number
of generic formulations in South Africa”[79].

“In summary, the greatest numbers of studies found were quantitative assessments focused on
the patient/consumer cohort. As is often found in quantitative studies, the number of participants
was comparatively higher than in the qualitative studies of patient and both professional groups.
However, when viewed collectively, the complementary methodologies employed by the various
research groups have provided a reasonable breadth and depth of insight into the knowledge of,
and perceptions, opinions and behaviours towards, generic medicines within the patient,
physician and pharmacist subject cohorts’.
Review of stakeholder opinions

“Physicians

One of the articles found was a comprehensive and clearly presented narrative review, by Hassali
et al. which collated international studies published between 1980 and 2008. This article
coalesced the collective views of physicians as accepting of generic substitution (GS) under
policy and economic pressures, but having concerns regarding the overall quality, reliability and
switchability of generic drugs. This review further theorised that those concerns may prevent full
adoption of generic drug prescribing and substitution by physicians, which could lead to
escalation in healthcare costs for governments, insurers or consumers directly”[80].

“This critical appraisal has gone further and has developed second-order constructs from the 17
included articles. During the appraisal process, it became clear that the articles could be defined
as belonging to seven specific, non-mutually exclusive groups related to:

a) physician reservations regarding generic medicines [81]

b) physicians’ confidence in their level of knowledge and understanding of generic medicines


and associated topics [82]

c) reference by physicians to use of pharmaceutical industry source of information regarding


generic medicines [83]

d) physicians’ perceived influence of the pharmaceutical industry and company representatives


[84]

e) physicians’ experience of financial incentives provided to physicians to influence prescribing


behaviour”[85]

[80; 81; 82; 83; 84; 85; 86] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4520280/


f) “physicians’ experience of pressure applied by patients regarding branded products [86]

g) physician belief that education (specifically regarding aspects of bioequivalence) is required


for greater use of generics in their market (all papers). This classification emerged only as part of
this appraisal; it was not commonly used before then by authors of any of the individual articles
or in the aforementioned review by Hassali et al. [87].

More specifically, with respect to a) above, in the studies describing reservations expressed by
physicians (and other healthcare professionals), specific references were made to: lack of
confidence in foreign manufacturers, particularly those in India and China doubts about
equivalence; and the expression of personal preference for branded medications if required for
themselves [88].

Other, less common attitudes expressed related to physicians reporting breakthrough seizures
associated with GS of an antiepileptic drug (AED) and as a result many were likely to prefer that
generic AEDs were not used [89]. Significant proportions of physicians express a preference for
brand name medications both generally and in the case of some specific medications (in this
instance, warfarin). Also, older physicians were more likely to have a poorer opinion of generics;
however, despite these stated misgivings, a majority of physicians were largely accepting of the
use of generic medicines [90]”.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4520280/ [88; 89; 90]


Conclusions :

“As per our literature review, which was focused on developed countries, consumer confidence
and knowledge about generic medicines use have increased steadily over time. Mass education
efforts, financial incentives and greater communication between patients and health care
professionals were seen as major influences on the uptake of generics among consumers. Safety
and efficacy issues were viewed as major barriers to the acceptance of generic drug substitutions.
The following conclusions and recommendations are provided on the basis of our analyses of the
literature published over the past three decades related to consumers’ views of generic drugs.
First, more research about consumers’ views on generic drug products should be carried out in
developing countries, where cost savings are needed more than in developed countries. This will
enable us to contrast the findings with those from the developed world and to reach a universal
view. Second, researchers should consider further study of consumers’ decision-making
processes regarding generic medications”.Third, better communication among patients and
health care professionals regarding the equivalency between most branded and generic products
should increase the use of generic medications. Finally, mass educational efforts should be
directed by consumer and health professional organizations and individual health care
practitioners (pharmacists, physicians, nurses and others) towards consumers to make them more
aware and to increase their knowledge about generic medications, and to encourage Consumers’
views on generic medicines Mohamed A.A. Hassali et al. 87 them to take an active role in
managing their medical conditions. Educational efforts should take into account the concerns of
specific groups, such as those with low levels of literacy, to overcome their fears or
misconceptions about generic medications”.