Mumbai: Last week, the central government announced that it is collaborating with states to promote the use of generic medicines in government hospitals. As per regulations set by the National Medical Council (NMC), all registered practitioners are required to prescribe medicines by their generic names.
Despite these directives, many doctors continue to favour branded drugs. As a result, patients rarely opt for generics on their own and often hesitate to accept cheaper alternatives suggested by chemists, largely due to strong brand loyalty linked to prescriptions.
Jan Aushadhi Success Story
At the same time, the government has significantly expanded the network of Jan Aushadhi Kendras—from just 80 before 2014 to around 18,000 today. These centres offer over 2,100 medicines, including treatments for cancer and diabetes, along with surgical items, at discounts ranging from 50% to 90%. The government estimates that this initiative has helped the public save nearly Rs 38,000 crore.
However, the share of generic medicines in India remains low, accounting for only about 4–5% of the ₹1.4 lakh crore pharmaceutical market. Prasad Danave, President of the Retail and Dispensing Chemist Association (RDCA), noted that generics contribute only a small fraction of overall medicine sales.
Escalating Enforcement and Backlash
In 2023, the government pushed for wider adoption of generics to make healthcare more affordable, with the NMC mandating prescriptions by generic names and warning of disciplinary action, including suspension of licences, for non-compliance.
The move, however, faced strong opposition from doctors and organisations such as the Indian Medical Association (IMA). They raised concerns about inconsistent quality, pointing out that not all generic medicines undergo strict bioequivalence testing. According to them, variations in manufacturing standards across companies could affect treatment outcomes.
The ‘Branded Generic’ Conundrum
Abhay Pandey, national president of the All Food and Drug Licence Holder Foundation (AFDLHF), said the issue involves multiple stakeholders with competing interests. He noted that many so-called generics in India are actually “branded generics.”
Pandey explained that pharmaceutical companies often market both branded and generic versions of the same medicine. When doctors prescribe, branded products are typically sold; when patients approach chemists directly, generic alternatives may be offered—often by the same company. While price differences are sometimes minimal, the incentives vary: companies may offer benefits to doctors for prescribing branded drugs and higher margins to chemists for selling generics.
The Role of PCD Companies in Market Distortion
He also highlighted the role of propaganda-cum-distribution (PCD) companies, noting that Maharashtra alone has around 800 to 1,000 such firms. These companies market medicines manufactured by third parties and allegedly rely on offering incentives to doctors and chemists to drive sales.
According to Pandey, some PCD companies allegedly provide gifts or sponsor programmes for doctors in exchange for prescriptions. Their products are often sold primarily through nearby chemist shops, sometimes at higher prices than comparable medicines from established pharmaceutical firms, with patients occasionally told that substitutes would be ineffective. He added that some healthcare professionals, including senior medical representatives, reportedly start their own companies, leveraging long-standing relationships with doctors and chemists to market their products.
He further noted that many such companies source medicines from lesser-known manufacturers, sometimes from other states, and may lack a proper online presence.
Health activists said that if medicines are prescribed strictly by their generic names, the business models of several stakeholders could be affected, which may explain the resistance to the policy.
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