Branded vs generic drugs: Two sides of health care
Abu Dhabi Government’s move directing pharmacies to dispense generic medicines as a first choice is a win-win situation for all. Here’s how it will benefit consumers
Dubai: The Abu Dhabi Department of Health’s decision to have pharmacies dispense generic medicines to patients is not only going to dramatically bring down health expenditure but also boost the prospects of local and regional pharmaceutical companies that make generic drugs.
The health regulation, which came into effect on September 1, directs that patients who still want to opt for branded formulations will have to pay the difference in prices which can be upto 70 per cent more.
This move is being hailed by the industry as a win- win situation for all – the insurance companies reeling under huge annual bills, local pharmaceutical companies trying to establish a strong presence and end user or patient who will have the benefit of getting the same efficacious drug at minimum price thereby conserving the allowance on the pharmacy limit in his insurance. If for example, the pharmacy limit was Dh 2,000 in his insurance and he was spending nearly Dh 1,500 or more on his medication for diabetes or kidney disease, he will now have a considerable saving to be able to buy medicines in case of other illnesses and not have to pay out of his pocket.
In the US, for example, nine out of ten medicines prescribed are generic saving the government at least $1 trillion in the last decade, according to health care experts.
The UAE health care sector is poised to have an annual average growth of 12.7 per cent which is marginally higher than the rest of the GCC countries according to a recent health care report by Alpen Capital published in 2016.
The annual health care expenditure per person in the UAE is estimated to $1,200 (Dh 4320) which is higher than the per capital expenditure of the top countries around the world.
Dr Sanjay Paithankar, director of Global Net, a Third Party Administrator (TPA) for settling Insurance claims and founder of Right Health, a chain of affordable health care clinics for blue collar workers in Dubai, feels this is a sign of maturity of the health care sector. “The Insurance sector will receive a boost with generic medicines. Right now the bleeding points in health care insurance are diagnostic tests, radiology tests and medicines. Reducing the medicine bills will reduce the overheads and make the health sector more sustainable.”
Dr Arun Kumar Sharma, neurologist and clinical director of Medeor 24/7 Hospital, Dubai, also welcomed the deicison. “It is definitely an economically sagacious step to move away from brand names. Now the consumer sector has to show some maturity.”
What is the difference between a branded drug and a generic drug
Branded or innovative drugs are manufactured after years of Research and Development by big pharmaceutical companies that pump in billions of dollars into the process. It starts with the biologists researching the efficacy of various salts for a particular disease, then based on the research, the chemists formulate the medicine after additional research. Once a drug is created, it undergoes several stringent trials before the company applies to a body such as the US Food and Drug Authority (FDA) or European Medical Association (EMEA) or similar bodies for approvals.
Once a drug is FDA-approved, a huge amount is further spent in the marketing, bulk manufacture and distribution of the drug. Therefore, the FDA provides a patent cover to the pharmaceutical so that no one else can replicate the manufacture and the company enjoys its exclusive manufacture rights for 10 -20 years. After the patent is lifted, other companies use the same formulation to make medicines.
Dr Arun Kumar Sharma explained: “Generic medicines are exact bio-equivalents of the branded ones. In other words, they yield similar blood concentrations after intake. The USFDA, the governing authority, has set a strict range of 5 per cent difference in the blood concentration of the generic metabolite compared to the branded medication. In accordance with FDA rules, most countries that have their own regulatory bodies have laid down very stringent criteria about dose, indications, benefits, adverse effects, pharmacokinetics of the drug and its elimination from the body.”
There is a third category of drugs which are the branded-generic drugs where many smaller marketing and distribution pharma companies pay the intellectual fee to get the knowledge about a particular formulation, replicate it and sell. These medicines are priced midway
Are generic drugs less efficacious?
In a study conducted between 1996 and 2007 by the US FDA, over 2,070 people were evaluated where the absorption of a branded and generic drug into the human body was studied . It concluded that there was no significant difference in the absorption rate between the two categories.
Another study evaluated the results of 38 published clinical trials that compared branded cardiovascular drugs with their coinciding generic counterparts and concluded that there was no significance difference.
Dr Sharma added: “I prescribe generic drugs all the time and find that not only they are as efficacious as the branded one but the compliance of the patient enhances dramatically due to ease in the affordability factor, especially in the case of chronic diseases.”
“Factually, from my experience, nearly 80 per cent of the so-called new generations branded drugs are almost, if not less efficacious, than the prototype drug. It is just some fancy interplay of organic chemistry on the same molecule and some promotional hype,” said Dr Sharma. However, he cautioned on the general manner of the absorption of a drug: “The absorption of any medication whether branded or generic may be erratic in people who have undergone gastric bypass surgery or colon resection.”
Branded drugs are still as a norm in cancer treatment. Dr Mohanand Diab, oncologist from NMC speciality hospital, Abu Dhabi, said.
“We find that in cancer treatment, most generic drugs contain biosimilars – salts that mimic the patented chemical formulation – that are not as effective as the branded ones. Besides, many patients report several side effects on treatment with biosimilars. So far, in my consultation, I prescribe only branded drugs.”
Dr Atul Aundhekhar explained that there could be a marked difference in the efficacy of generic drugs due to the manufacturing processes.
“The molecule of a branded drug goes through very stringent R&D and several trials and is very efficacious. This is a sort of a best practice followed and is an international benchmark in production. As a result the generic medicine is always not as efficacious as the branded one. What we do is take an informed decision on a case by case basis.”
He added, “The rule is that if it is a Critical Illness (CI), then it is safer to prescribe a branded drug therapy for best results. If it is a Non-Critical Illness (NCI) which means it is not life-threatening, where the patient can afford to wait for slower results, we tend to prescribe generic drugs,” said Dr Aundhekar.
CI s could include paralysis, heart arrhythmias, cardiovascular disease, leukemia, kidney disease, epilepsy, while NCIs could be cough, fever, diarrhoea, unspecified pain in the body and so on.
A survey of medicines available at any of the UAE pharmacies reveal the dramatic price differences in the branded and generic medicines categories. Most generic medicines are nearly 25-90 per cent cheaper than the branded drug containing the same active chemical ingredient.
1) Metformin, which is effective in controlling Type II diabetes and also prescribed for polycystic ovaries, in its generic form costs Dh3 for 10 tablets.
Same medicine in branded versions cn be priced between Dh 8-25 for 10 tablets.
So if a diabetic patient on Essential Basic insurance package of Dh 550 annually requires 60 tablets of metformin in a month which means he requires 6 strips of the tablet for a month, he would exhaust his pharmacy limit of Dh1,500 within 10 months if he were to buy the Dh 25 Metformin. This would leave him without any pharmacy limit in his insurance in case he were to fall sick or have any other affliction in the year.
2) Amoxcyllin: The antibiotic in its generic form is priced at Dh 10.05.
Branded version: Dh 45.50.
3) Ciproflaxin: Antibiotic formulated by a local pharmaceutical costs Dh 33 for 10 tablets.
Branded version: Dh 116 for 10 tablets.
According to information provided by insurance providers and the health industry, pharmacies have a 20 per profit share in medicines. For instance, if a medicine is priced at Dh100, the pharmacy stands to make a profit of Dh 20. Therefore, if a generic medicine costs only Dh30, the profit margin of the pharmacy shrinks too.
Insurance companies say
Insurance companies argue that doctors prescribing only branded drugs is raising the intrinsic cost of health care as the component for medicines is just 1/3rd of the total premium paid. “If this continues, most insurance companies who are incurring losses are likely to raise the premium,” he added.
They have now installed a system of seeking approvals on their 24-hour phone and web portal for every medicine prescribed to introduce a system of checks and balances. “In the end, if the patient exhausts his medicine limit within the first 6-7 months, he will end up paying the rest of the amount from his pocket if he falls ill after the limit is over. If the doctor is prescribing only branded drugs for a patient with preexisting illness like diabetes and blood pressure it means the patient needs medicines worth 500 every three months. What if he falls sick or has another medical issue?” questioned the pharmacist who said he had to deal with at least ten cases of rejection of approval by the insurance provider of the prescribed medicine.
What consumers say…
Mohammad Jaffar, 37, Pakistani expatriate who works as a mechanic in Dubai
He was diagnosed with Type II diabetes and taken to the emergency. “I have no health insurance and the doctor prescribed Amaryl 3 mg. Luckily, there was a generic version of the medicine which I was able to afford. The branded medicine would have cost me Dh400 per month but the generic one costs only Dh 60 per month.”
Joy Vamdev, 48, works in a cargo company
Vamdev had no health insurance and developed a nasty skin allergy. “Luckily, the generic medicine the affordable clinic offered cost only Dh100 for the whole month and I have recovered after a month-long treatment.”
Rajeevan Niravath, 38, works as a Public Relations Officer for a Dubai-based industry
He said that all the 50 employees visit one of the affordable clinics in Sonapur. “This includes me and the doctors there only prescribe generic medicines which are very effective. The clinic does not charge more than Dh15 for consultation. So our insurance bills do not inflate.”
Mushtaq Hussain, 40, Pakistan, works for a construction company
“I have been in the UAE for 19 years and even before health insurance coverage was provided, I was on treatment for high cholesterol being prescribed only generic medication. Each strip of my cholesterol medication costs Dh 6. I was able to sustain my health because I could afford the price of the medicine.”