Pharma sector needs a RERA-type law
Why was in news?
In a widely publicised speech given at the opening of a hospital in Surat, Prime Minister Narendra Modi indicated that his government may bring in a legal framework under which doctors will have to prescribe generic medicines.
Importance of regulatory framework:
- A landmark act introduced in the US in 1984, “the Drug Price Competition and Patent Term Restoration Act” transformed the drug market in that country by allowing a generic medicine, that has demonstrated mere bioequivalence with the branded drug, to be dispensed as a substitute for a prescription of the branded drug.
- The generic drug would not have to undergo a complete clinical trial to be proved equivalent. Subsequently, this model has been followed in other countries and today most OECD and other developing countries accept the substitution of a branded medicine with a generic equivalent.
- The need of the hour is not a piecemeal legislation mandating the doctors to prescribe generic medicines, but a holistic legislative and regulatory framework that addresses both the quality and affordability aspects. It is commendable that the government, recognising the need to protect the rights of a home buyer, has enacted RERA to regulate the real estate sector.
Need a better regulator:
The DRA should serve the dual purpose of making the rules simpler yet stricter, while having the required resources to enforce them effectively. At a minimum:
- Every drug manufacturer should publish details of its manufacturing facilities, specifications, capacity, certifications, all subsequent inspection reports to a central portal.
- Products should be approved as generics based on whether they are pharmaceutically equivalent, bio-available, and bio-equivalent. The bio-equivalence study should be as per the protocol defined by the DRA, and all the results of such studies should be made publicly available prior to releasing it to market.
- All new products or new combinations of existing products should be subjected to a more extensive clinical study to prove safety as well as effectiveness. A mere bioequivalence may not be enough in this case.
- Facilities which do not comply with GMP should be immediately barred from production until such compliances are in place and products made in such a facility should be immediately recalled.
- All products should be tagged with a unique RFID, barcode or such similar identification to ensure traceability from manufacture to consumption.
- Generics should be labelled and sold as such in order to prevent a brand to brand substitution rather than a brand to generic substitution at the retail level.
With the above regulatory framework in place, additional steps required to ensure widespread dissemination and adoption of generics would be:
- A government maintained portal with information about all licensed branded and approved generic equivalents searchable by product name or composition, freely accessible to consumers, pharmacists and retailers including the price. The portal will also provide an ability to verify the authenticity of the product based on the unique product code.
- Capping the maximum sale price of the generic taking into account the cost of making the drug and distribution and retail margins.
- Mandating all public sector organisations and governmental healthcare institutions to dispense generics only for all drugs where such equivalents are available.
- Modification of the drugs and cosmetics act to allow dispensing of generic as a substitute for the branded drug at the hospital pharmacy and retail level.
- Mandating the retailer to maintain at least one generic equivalent wherever available for every brand name drug in his inventory. This will ensure that the customer always has an option to buy a generic and incentivises the manufacturer to produce them in the first place due to guaranteed widespread distribution.
- Mandating the retailer to dispense medicines along with an invoice mentioning the unique product code to ensure traceability and transparency.
- Mandating the doctor to write an accompanying reason with the prescription if he or she feels that the patient should take only the branded drug, in the absence of which a generic substituion would be the norm.
Enforced with punitive fines for non-compliance, these measures will not only make medicines affordable to all, but also give the customers the choice without fear of compromising the quality of their care.
It will also ensure that the organisations who play by the rules are not undercut by rogues.