Getting Narendra Modi’s generic medicines policy right

Rolling out a half-baked populist agenda is likely to backfire and be detrimental to the public health agenda

In what has come to be recognized as his signature fashion, Prime Minister Narendra Modi recently put forward another disruptive policy prescription—this time in healthcare. Doctors will now be required to prescribe generic formulations of medicines, as opposed to specific brands. This is an initiative that goes beyond attempts by institutions like the Medical Council of India to encourage the prescription of generic names, and instead works towards creating a formal legal framework for such a practice. Broadly, this is expected to bring down drug prices and expand access to affordable health solutions. The push towards generics is lauded by many stakeholders, and rightly so. However, Modi’s policy must move beyond rhetoric—for in a sector such as health, faulty policy design will directly affect the country’s mortality statistics.

As per the latest National Sample Survey Office survey on healthcare, in 2014, medicines emerged as a principal component of total health expenses—72% in rural areas and 68% in urban areas. For a country with one of the highest per capita out-of-pocket expenditures on health, even a modest drop in drug prices will free hundreds of households from the widespread phenomenon of a medical poverty trap.

In addition to the social benefits, the generics-only policy also makes economic sense. It is the government’s responsibility to keep the growth engine running. By promoting generic drug consumption, the government safeguards the health of its generic drug manufacturing industry—one of the largest suppliers of low-cost medicines in the world. With increasing pressure from the “Big Pharma” companies in developed countries, Indian generic manufacturers must now operate under a markedly restrictive intellectual property rights (IPR) regime. The new policy can ensure that—at least in the Indian market—generic manufacturers retain an advantage. Big Pharma’s access to Indian consumers will have to be routed through generic companies using channels such as voluntary licensing. Last year, US-based Gilead, for instance, licensed out its Hepatitis C drug, Sovaldi, to 11 Indian generic companies at a drastically reduced price. A generic-only policy is expected to mainstream such practices. In a global economic environment that is turning increasingly hostile to generic drug production, this is a bold move—indicative of the government’s categorical support for one of its key industries.

Low-cost medicines, apart from their attribute as a commercial commodity, have far-reaching implications on public health and international human rights. India has unambiguously subscribed to the pro-public health argument, and has articulated its position several times at home and in international forums. Public health, however, encompasses quality as much as affordability of pharmaceutical drugs. While Modi’s push for a generics-only policy is a step in the right direction, it is important to assess and ensure that Indian generic companies are competent enough to take on the task before institutionalizing such a policy.

Indian generic manufacturers have come under the spotlight due to the inferior quality of their products. Major export destinations—like the US and the European Union—have raised this issue several times. The US food and drug administration (FDA) issued warning letters to 27 manufacturing plants in India between 2011 and 2016, and banned drug imports from several of them, including some of the biggest names in Indian generics manufacturing. The European Medicines Agency (EMA) and the UK’s Medicines and Health Regulatory Authority (MHRA) have issued similar sanctions. This highlights the fallacy in equating brand names with quality—a common justification by Indian doctors for favouring certain brands over others.

Some may argue that such sanctions are merely a manifestation of the general hostility towards generic drugs. However, the problem of substandard quality is further supported by the findings of India’s own regulatory authority. The March 2017 edition of the Central Drugs Standard Control Organization’s (CDSCO) surveillance report shows that a range of commonly consumed drugs, such as the Cipla-manufactured antibiotic ofloxacin tablets or the Cadila-manufactured Cadilose, fall short of standard quality-control criteria.

There are three fundamental areas of concern. The first relates to the efficacy of Indian-made drugs. Oftentimes, such drugs have been found to contain less than the required amount of active pharmaceutical ingredient (API), rendering them ineffective. The FDA’s inspection of Avandamet tablets, used to treat type 2 diabetes, found that some tablets lack the proper dosage of rosiglitazone, an active ingredient.

Closely linked to the issue of efficacy is the lack of data integrity. The poorly managed documentation practices of Indian generic firms featured as the primary criticism flagged by foreign regulatory authorities. The lack of reliable and complete data on the test results of specific drug batches, along with inconsistencies in the records presented, meant that inspection and verification of drug quality was extremely difficult. In fact, in 2013, Ranbaxy pleaded guilty and paid fines amounting to $500 million for fabricating drug-related data in the US.

The third aspect relates to the hygiene standards of the manufacturing plants. Individuals suffering from illness are especially susceptible to infections, and inspections of generic drug plants 
reveal pest infestations and dilapidated infrastructure. Many a manufacturing unit has become home to stray pigeons and lizards. Gaping holes in building walls and rusted pipes have become sources of infectious parasites, in what ideally should be a sterile environment.

Healthcare should be accessible to all, irrespective of purchasing power. The government’s leadership on this issue is welcome. Rolling out a half-baked populist agenda, however, is likely to backfire. Unlike demonetization, one cannot afford to wait and watch for the full impact of a generics-only policy to unfold. The current government has invested heavily in creating institutions to promote evidence-based policymaking, and it must leverage these in crafting an effective generic medicine policy.