Branded drugs and generic drug

Branded drugs and generic drug

Dr Sanjay Agrawal

Leading Pharmaceutical Consultant and Editor-in Chief of IJMToday

Several pharmaceutical trading agencies such as wholesalers & retailers, and drug manufacturers describe branded generic drugs are superior to unbranded generic drugs through advertising and promotion. But, patients are drawing attention to safety, quality and cost effectiveness of medicine and it does not matter to them whether it is branded or unbranded. Drug manufacturing companies in India market same molecule under many brand names at various prices. Medical experts have added to this confusion by indicating they trust drugs made by reputed pharma companies.

The medicines are available in three names: common name (generic name), branded generics and brand names. The brand name in true sense, is the name given by the innovator company who holding a patent for that product. On expiry of patent, the drug molecule is free to be manufactured by other companies and sell them in generic name. The medicines available as generic drugs after the expiry period of patent must be bioequivalent, so that they can be interchangeable. These generic drugs are cheaper than the brands. So, there are no differences between the generics and their brands except the price. The branded drugs are priced at higher level because the pharmaceutical companies spend huge amount to build the brand value. There are few innovators’ brands in Indian market. It is believed about 7 per cent. Most of the pharmaceutical market is dominated by the branded generic drugs accounting to approximately 70 per cent of the market. This is something unique to India where the off-patented drugs sold in brand names called branded generic drugs. As far as pharmaceutical market is concerned, there is no difference between brands and branded generic drugs. Both groups are sold in brands only. The common name or generic name is the name of the drug molecule for which no ownership exists. This name for a molecule is given as international non-proprietary name by the WHO.

The drug which is safeguarded by patent is called branded drugs or medicines and the drug which is a copy of branded drug and is equivalent in terms of safety, efficacy, dosage and use is known as a generic drug. Generic drugs are known only by the chemical name and not by a trade name. Generic drug manufacturing companies do not have to spend expenses on R&D to find out for a new chemical entity (NCE) and that is why these generic drugs are less in cost compared to branded medicines. Branded medicines have a name given by a company for the purpose of advertising and the names of branded medicines are different from the international non-proprietary name, also known as the generic name. Branded medicines may be the original medicine developed by a pharmaceutical company, which may make the same generic drug to which each company gives its own brand name. A branded drug is the original product that has been developed by a pharmaceutical company. When a company develops a new drug, their product must undergo tests and evaluations to ensure that it is both effective in curing the condition it claims to treat and safe for human use. As pharmaceutical companies invest large amount of money to develop a new drug, they are given the sole right to manufacture and market the drug for a certain period of time. When a pharmaceutical company is given sole rights of manufacture and market, the drug is said to have a patent on it. For a period of time after the patent is granted, no one else can produce a drug that is the same as the patented drug; the medicine belongs exclusively to the original company. For this reason, branded drugs are the most well known and most trusted type of that particular drug.

Brand name drug

A branded drug is protected by a patent and has a trade name. The drug cannot be manufactured or sold by any other company. The rate is fixed by them. New drugs are generally developed under patent protection. Branded drugs are manufactured by conforming to international standards. Brand name drugs are usually given patent protection for 20 years from the date of submission of the patent. This provides protection for the innovator of such drugs to make good the initial costs incurred by the company, viz., R&D and marketing expenses to develop the new drug.

Generic drugs

A generic drug is a pharmaceutical product, usually intended to be interchangeable with an innovator product that is manufactured without a license from the innovator company and marketed after the expiry date of the patent or other exclusive rights. Generic drugs are marketed under a non-proprietary or approved name rather than a proprietary or brand name. Generic drugs are frequently as effective as, but much cheaper than brand-name drugs. Because of their low price, generic drugs are often the only medicines that the poorest can access. Generic drugs are marketed without brand names and are normally less in price compared to branded generic drugs. Both generic drugs and branded generic drugs are chemically identical and meeting the same norms and standards of the US Food and Drug Administration in its safety, purity and effectiveness.
According to a recent study, India’s trade margin for many branded drugs varies from 200 per cent to more than 2000 per cent. Not only this, the practice of self-medication is widespread in the country among many socioeconomic groups is similar to the practice of OTC drug dispensing.

In developed nations such as the US, UK only patented drugs are sold under a brand, which is marketed through their understanding with the medical doctors. Off-patent drugs are sold only as pure generic and without using any brand name. It helps in making pure generic drugs with low cost. But, in India, the most of the generic drugs are sold as their brand generic drugs. Margins on sales of brand name drug is much higher for everyone in the supply chain. Since the generics are priced considerably low price, the income earned by everyone in the supply chain is lower. Despite stringent price control, the big pharmaceutical companies manage to spend exorbitantly on branding of their drugs. Since advertisement of prescription medicines are not allowed in the country, companies or medical representatives push their products through medical doctors, chemists and distributors in lieu of freebies. In India, quality of generic drugs is not considered at par as brand name drugs. For obtaining quality standard of brand drugs, generic drug manufacturers will have to invest in equipments and necessary approval process which may increase the cost of generic drugs.  Also, in developed countries, the 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.

In developing generic drugs, the manufacturer must prove the bioequivalence of the drug with that of branded drug. The purity, consistency and strength have to be maintained. In this process there is no involvement of lengthy and other expensive clinical trial process except the bioequivalence tests. Thus generics can take only about maximum of three years as compared to the branded drugs which takes about six to seven years for the development. Generic drugs are often manufactured by companies that also make brand-name drugs. The US FDA regulates and inspects all generic drug manufacturers as that of branded drugs. If any marketed products fail to meet their production standards, they will be recalled by company.

The generic prescribing is proved to have many positive points. It avoids the medication errors both at prescribing points and dispensing points. It would most likely reduce the medication cost in a drug therapy. The likely word is used because there are several concerns on generic name prescriptions. There are several companies making generics or branded generics. The prices vary widely at least for drugs which are not under the domain of price control mechanism. In such cases, which one the pharmacist would dispense. It is obvious that the variety which gives the maximum profit would be the choice for the pharmacist. The choice of brand just gets shifted from the medical doctor to the chemist and the drug seller.

Give a Reply