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GENERIC PRICING BY HARYANA
P A Francis | Wednesday, February 18, 2004, 08:00 Hrs  [IST]

The global market for generic drugs is estimated to be 70 billion US dollars and is growing at the rate of 10 to 15 percent annually. A major part of this market is in North America and India is going to be one of the main beneficiaries of this great opportunity. More than two dozen top Indian companies are all set to capture this market by establishing alliances in the US and Canada. High growth of generics market is mainly on account of two factors. 1.Patents of a large number of widely used molecules got expired in recent years. 2.The governments of these countries are encouraging the use of generic drugs. Branded drugs are becoming increasingly expensive and unaffordable to a large number of senior citizens and poor people of these counties. And generics are available not only in these markets but also worldwide at one third or on one fourth of the prices of branded products. It is expected to be like that as the generics enter the market only after expiry of the drug patent. The very concept of generics manufacturing is to make available the expensive branded drugs at lower prices in the market, as there is no brand promotion involved. Highly unethical brand promotion by pharmaceutical companies is perhaps the sole reason for high prices of branded drugs world over. In India, the practice of unethical promotion of branded products mainly by large pharma companies has crossed all limits of ethics and decency. No control on this activity has been ever thought of by authorities yet.

Still worse is the overpricing of generics in India, again led by large pharma companies claiming to be third or fourth largest. While worldwide generics drugs are sold far below the branded products, only in India generics are sold almost at the same prices of branded products. And the huge margins ranging from 300 to more than 1,000 percent are passed on to the trade by the pharmaceutical companies at the cost of the ultimate consumer. The drug companies also make their profit with huge volumes but they mainly do this trade enrichment activity for building their market share. The issue has been brought to the notice of NPPA and was also discussed in various forums in the past but profiteering in generics continues nationwide with no check. The initiative took by the Haryana government with the support of Haryana State Chemists' and Druggists' Association to cut prices of 254 widely used generics drugs by 20 percent early this month is the first progressive step took by any authority in this regard. As the NPPA has not been able to bring any check on this unfair trade practice, the governments of other states should also come forward and bring an end to this generic looting.

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