EU trade deals risk affordability of generic medicines for Global South

Typically, a claim for reimbursement of a new pharmaceutical product requires a valid prescription from a registered medical practitioner. Further, it is required to be covered under the reimbursement schemes, which are listed in formularies approved by the respective authorities. The beneficiary or healthcare provider is required to submit its claim to the respective authority, along with the prescriptions and relevant documents pertaining to the insurance or health scheme authorities. Thereafter, such claims are processed, and reimbursement is provided based on the scheme’s guidelines and approval procedures.

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The purpose of this research is to anchor the debate on the relationship between the cost of medicine and the availability and affordability of quality generic medicines in mid to low-income countries. FDA Commissioner Robert Califf admitted as much last year, when he warned that “there’s not enough reserve and supply” of generic drugs in the United States. Califf admitted that the stakes are too high (i.e. patients are sicker for longer and some are even dying due to drug shortages) he said the economics of the industry need to be altered to boost domestic production of generic drugs. Finally, the study has revealed in a current and future scenario analysis that the overall situation of the Indian pharmaceutical industry is positive at the economic, business and commercial levels, even though with many concerns. Most likely, however, the real challenge of the sector will entail a sustainable compromise between the legitimate expectations of innovative growth from the business point of view and the fundamental exigencies of affordable health from a social point of view.

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This is because in India, there is an inadequate R&D infrastructure and lower industry-academia connection for research. As mentioned above, DPCO establishes the various pricing parameters according to which the price is to be decided, and this policy reduces the profitability of the companies that would invest in innovative drugs, which requires huge capital. This sector has been hamstrung by a lack of product patents, due to which foreign companies do not introduce new drugs in the Indian market, discouraging innovation and drug discovery.

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Moreover, the margins that Indian suppliers can earn in the United States are higher than those they can achieve in the more saturated Indian market. There are also ample opportunities presenting themselves across Asia for India’s pharma players, especially as talks of a free-trade agreement (FTA) with the Eurasian Economic Union and Regional Comprehensive Economic Partnership in Asia progress. Although the market continues to diversify with new players springing up from within India as well as internationally, a handful of national players continue to have a sizeable footprint in the domestic and international generics industry. Piramal, Torrent, Cipla, Sun Pharma, Aurobindo, Dr. Reddy’s and Glenmark, to name a few, represent a number of the success stories in India’s pharma industry landscape. With the biopharmaceutical industry rapidly evolving across the globe, inorganic growth has been an important part of company strategy for expanding footprints, retaining market share and moving into new areas of the value chain. For example, Torrent acquired Bio-Pharma Inc. (BPI) in early 2018 – its first acquisition of a manufacturing site outside of India – to diversify and strengthen its product pipeline.

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In addition to modern medicine, Ayurveda and the other mentioned treatments are highly popular in India. Patanjali, Himalaya, Vicco Laboratories and Dabur are the major companies manufacturing in the field (Mehrotra et al., 2017). Indian companies engaged in AYUSH production and distribution will have to consider a long-term perspective; in the near future, positive results are likely, but in long-range planning, with the tremendous increase of technology, focusing on this segment could be very risky.

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The rise of drug shortages, the unreliable quality of the output of Chinese and Indian facilities, and the increasing concentration of the industry to one or two manufacturers for many drugs or key ingredients raises real questions over the FDA’s ability to address the shortage problem. Following the Covid-19 pandemic, pharmaceutical supply chains have evolved to become more agile, transparent, and resilient. They have embraced advanced technologies like machine learning and artificial intelligence. There is a significant ongoing investment in automating manufacturing and packaging processes to enhance productivity, operational cost efficiency, and labeling precision.

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Particularly, the country exports generic medicines on a large scale, with a major impact in the American and European markets. Assessing the availability and affordability of generic medicine at PMBJP outlets is important, but perhaps it is even more important to know the physicians’ attitude towards generic drugs and PMBJP scheme, as they play a key role in prescribing generic medicines. Most of the physicians argued that generic and branded medicines have the same active substance(s). Table 6 shows the cost of standard treatments, as recommended by WHO, with surveyed medicines at PMBJP price and at branded generic price for a number of health conditions [22, 23]. We find that for all selected disease conditions, the drug cost of the thirty-day treatment reduce by 6–1129% if PMBJP’s unbranded medicines are used instead of their largest selling branded-generic counterparts. For the treatment of Type 2 diabetes, the monthly expenditure on the PMBJP medicine (Glimepiride) was estimated to be almost 50% lower compared to its equivalent branded-generic counterpart.

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• Because the active chemical substance is the same, the medical profile of generics is believed to be equivalent in performance.
• Besides affordability, we did cost comparison of unbranded and branded generic equivalents of some commonly used medicines.
• The generic landscape is rapidly changing with cost pressures slowing down domestic offtake, pricing pressures in developed markets such as the United States and Europe, as well as pricing pressures being introduced in India.
• We will not dispense any prescription medicine without a valid prescription from a licensed/certified doctor physician.
• Be at the forefront of data-driven decision-making with a new generative AI tool that enables you to interact with our products and solutions like never before.
• Remarkably, 36% of China’s exports are to the EU and North America, where regulations are the most stringent, compared to 19% in 2009.
• Starting in 2014 in India, a Ministry of AYUSH was established, indicating the extraordinary relevance in the country of these specific items.

“The two major reasons for the cost pressures are slowing down of the domestic offtake and pricing pressures in developed markets such as the United States and Europe, in addition to some of the pricing pressures also being introduced in India in the domestic markets,” commented Raisinghani. “This is further compounded by regulatory bodies demanding stricter compliance, which are leading to higher compliance costs,” he added. If sponsors, healthcare providers, and regulators work together effectively, then effective use of generic drugs will make medical costs cheaper and also ensure sound treatment options for the patients. Early issuance of guidance notes on the prescription of generic medicines, clarity in dispensing rights, state notification of FDSI, and mandated display of EML at the facilities heighten the awareness of both providers and community members. In line with this, irrational prescriptions and poor adherence to STPs/STGs and EML may be attributed to lack of awareness.

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There is a concrete risk of confusion in the minds of patients/consumers regarding which drug should be considered due to this price variation. Therefore, price controls were effective at analyzing this price variation and are attempting to decrease the difference even more (Jhanwar and Sharma, 2018). With specific reference to single commercial relationships, the USA and other developed countries are major trade partners as far as exports are concerned, while India depends significantly on imports of APIs from China (Rbi.org.in). More broadly, the Indian pharmaceutical industry has major exports to North America and Europe and major imports from Asia and Europe.

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Chinese pharma has also placed much emphasis on using AI and genetics for developing new drugs. This enables firms like XtaIPi to identify thousands of molecules which could be used to treat a disease with fewer resources and time. Jean Lee is a content expert with a background in journalism and marketing, driven by a passion for storytelling that inspires and informs. As the managing editor of The Intake, she is committed to supporting independent practices with content, insights, and resources tailored to help them navigate challenges and succeed in today’s evolving healthcare landscape. For many Americans, the decision between generic and brand-name medications often comes down to cost.

• We conducted a total of 16 in-depth interviews (IDIs) – 10 with pharmacists and 6 with physicians.
• By leveraging its strengths, embracing technological advancements, and fostering collaboration, the Indian pharmaceutical industry can continue to play a pivotal role in shaping the future of healthcare delivery both domestically and internationally.
• Table 1 shows America’s top ten sources of pharmaceutical products last year by weight.
• One silver lining is that China is proposing a new regulation that would give its firms exclusive control over their clinical test data.
• From a theoretical point of view, the contribution of intellectual capital to the financial stability and economic prosperity of the pharmaceutical industry, most of all due to patents as immaterial assets deriving from human, structural and/or relational capital, seems indispensable (Festa et al., 2020).
• When Health Canada launched a new “Inspection Tracker” website this month listing concerns about standards at pharmaceutical factories, 11 of the 15 plants on the list were in India, seven of them now subject to import restrictions.
• However, it instead tipped the balance in favor of the pharmaceutical industry’s commercial interests, and away from access to affordable medicines.

While the upward revision of drug prices is positive for their respective producers, patients must increase their out-of-pocket (OOP) spending to cover the increased prices. This is also the case in India, where OOP healthcare expenditure accounts for more than 50% of total healthcare expenditure, despite India having among the lowest drug prices in the world. Making medicine accessible at affordable prices to the masses will require more than the somewhat piecemeal approach to generic drug promotion that currently exists in the form of PMBJP scheme.

• “We are ready to prescribe generic only, but there is no mechanism to ensure that private pharmacy shop chemists would dispense right and cost-effective generic medicines.
• But doctors from private health care facilities hardly mention the generic or chemical names of drugs on the prescription slips and only 60 percent of the prescriptions from public health facilities contain generic names [27].
• “When we write any generic medicines and if it is not available in hospital pharmacy, patients have to go to other pharmacies to buy it.
• Following informed consent, the interviews were audiotaped while the first author also took notes.
• There was ample availability of multiple brands for identical drugs in India, and therefore, after DPCO was revised in 2013, a so-called tug of war between these branded drugs began.
• The scheme envisaged to sell generic medicines at affordable prices through exclusive outlets namely JAS stores across the country, starting from the district to sub-divisional headquarters and to towns and villages.
• This country’s ability to produce affordable, generic drugs has led to its reputation of being the “pharmacy of the world.” By export volume, India is currently the largest provider of generic medicines globally, supplying 18 percent of global generic medicines.

On top of all these problems is the large and growing national security risk as more and more drugs become dependent on suppliers from China. Even the common knowledge that we are becoming dependent on a small number of large drug companies for generic drugs understates the dependency on China. Qyobo is a software startup that collects pharmaceutical data from dozens of national and international databases to provide a picture of the drug supply chain that is not only superior to what the patient or the doctor sees, it is probably superior to the knowledge of the FDA.

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A challenge is also posed by the exponential growth in population, and epidemiological changes in the population resulting from shift in lifestyles. Thus, there is a continuous boost in the demand for pharmaceutical products and a consequent strain on the supply chain. The growth in population also affects reimbursement policies, since the Government has to allocate an increasing number of funds to public health insurance schemes and may be affected by budgetary constraints.

In fact, AYUSH represents a mass-niche market, requiring peculiar attention mostly in terms of competitive strategies that would have a focus orientation. This study provides a global overview of the potential growth and development of the Indian pharmaceutical sector, comparing it with internal trends and external competition. The most relevant contribution of the research relies on the shift to innovative production that Indian companies must adopt (after years of focusing only on generic drugs), and in this vein, appropriate industrial marketing solutions are indispensable. In order to collect data in an accurate and reliable manner, one of the researchers personally visited the selected PMBJP outlets to check the availability of generic medicines. The researcher cum field investigator is trained in both pharmacy and public health with previous experience of conducting primary data collection for health systems research.

Further, the private physicians underlined the need for developing strong regulatory mechanisms to ensure that generic drugs meet high standards of quality. “We are ready to prescribe low cost generics, but it becomes difficult for me to convince my patients to take such a low-cost generic medicine. Most of the time patients want relief from pain as quick as possible and thus they are ready to pay even high for medicines. We first examined the selected medicine list of PMBJP to assess the extent of coverage of essential medicines. NLEM, 2015 has 376 essential drugs whereas the PMBJP list contains 214 essential medicines.

• Addressing these infrastructure gaps requires substantial investment and collaborative efforts between the public and private sectors.
• To empirically carry out the investigation, secondary data have been extracted from the authenticated databases of the Centre for Monitoring Indian Economy (Cmie.com) and the Reserve Bank of India (Rbi.org.in), particularly to respond to RQ1 and RQ2.
• Information was obtained on the availability of essential medicines at PMBJP outlets across primary, secondary and tertiary levels of health care delivery system against the basket of 22, 28 and 35 medicines respectively selected according to therapeutic category.
• Hence, N X P gave the total number of drugs in that therapeutic category which were surveyed at all PMBJP pharmacies at PHC level in Palghar.
• There is less emphasis on R&D in pharmaceuticals, which have a major focus on generics.
• In August, President Trump issued an executive order that called for the elimination of drug imports, both as active ingredients and formulations.

Canadian, Australian and European regulators also gave passing grades to Ranbaxy, despite the company’s guilty plea to seven offences in the U.S., notes Dinkar Saran, a pharmaceutical-industry consultant with PriceWaterhouseCoopers in Boston. The national regulator reportedly has fewer than 400 staff to police more than 1,300 factories, and does not even oversee many of the drugs exported revolade price philippines to places like Canada. That job falls to state-level officials, who have a reputation for being under-trained and corrupt. We will not dispense any prescription medicine without a valid prescription from a licensed/certified doctor physician. A bottle of 21 capsules costs between 5000 and 6000 Indian Rupees, depending on the strength of the medicine, making it very affordable.

(2016), “R&D, technology transfer and productivity in the Indian pharmaceutical industry”, International Journal of Innovation Management, Vol. The infrastructure of the industry and the R&D capabilities of domestic businesses have improved considerably in recent years, but many challenges remain, mainly related to pricing regulation, sector fragmentation and intellectual property. Not surprisingly, all of them, directly or indirectly, concern patents, which are central issues of debate in the national industry. Tiered pricing, also known as differential pricing , is often practised by pharmaceutical companies based on the ability of countries to pay, but Hill was unavailable to comment. Several factors have contributed to this significant growth of the healthcare industry in India – which includes a combination of public sector initiatives and expansion of private-sector enterprises.

In other words, the overall coverage of essential drugs in PMBJP list is just 57%, when compared to the total number of essential medicines included in NLEM. We have used a mixed-methods approach, with the survey-based quantitative component supplemented by a qualitative component consisting of in-depth interviews (IDIs). Data were gathered on the availability, stock-outs, price and affordability of 35 essential medicines and 2 consumables. Our unparalleled team of in-house experts monitor P&R policy developments, outcomes and data analytics around the world every day to give our clients the edge by providing critical early warning signals and insights. With the availability and usage of generic drugs, the experience with these drugs will increase and it will be possible to compare the real-time effectiveness of generic drugs vis-à -vis brand drugs.