The perceived difference in the quality of different brands of generic drugs that can be prescribed interchangeably is one of the main obstacles to effective price competition in the pharmaceutical market, found the Indian Competition Commission (ITC ) in a market study.
The study highlights the trend in the retail drug market – although low-cost generic copies of drugs are available for most brand name drugs, the skewed information on the quality of generics and the penchant for drugs brand names undermine price competition.
Unlike in Western markets, where patented drugs are branded and off-patent drugs are mostly generic drugs sold under their chemical names, Indian drug manufacturers give generic copies, known as brand-name generics, brand names. to gain an advantage in the market. Formulations sold by chemical name are referred to in India as “generic generics” or “commercial generics”, which make up only 10% of the generic segment and mostly form part of the public market. The CCI study found a large price variation between generic brands of the same formulations by different producers and even between two brands of the same formulation sold by the same producer.
CCI’s market research highlights anti-competitive trends and practices, which contribute to its advocacy work. It can also serve as a basis for policy or regulatory initiatives.
In the study, CCI found that the best-selling antibiotic formulation, amoxicillin and the 125 mg and 500 mg clavulanic acid tablets, are currently sold by 217 companies under 292 brands, with prices ranging from ??40 to ??336 for a box of six tablets. A notable price variation is also observed between two brands of the same drug sold by the same company in some cases. For example, the prices charged by a company for two brands of the combination anti-diabetic drugs glimepiride and metformin were ??10 and ??60 per pack of 10, CCI said.
Even in the presence of many companies and brands, market leaders charge relatively higher prices than other market players, especially those with lower market shares. For example, premixed human insulin, an anti-diabetic drug, is sold by market laggards to ??15.42 per cartridge vs. the market leader’s price of ??96.67 per cartridge, resulting in a 145% price difference, the competition watchdog said in the study.
“Evidence suggests that the price charged by the market leader, measured by the value of sales, remains the highest or among the highest, while the prices of the best-selling drugs remain the lowest, or among the lowest. “, he noted.
The study received mixed responses as to whether there are differences in the quality and effectiveness of different brands of the same formulation.
Some respondents said that because consumers are unable to make an informed choice and the quality and effectiveness of drugs is inherently unobservable, they follow doctors’ brand prescriptions, which are often allegedly influenced by aggressive promotion. branding by pharmaceutical companies. This, they say, reduces the price elasticity of demand, discourages price competition, and allows high prices to be set and surplus to be extracted from the consumer. Other respondents cited the physician’s clinical experience with the therapeutic benefit of a brand as a factor influencing the prescription of specific brands.
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