Competitive edge of generic drugs

Judging from the exponential increase in the number of drug stores in urban areas that sell generic (or unbranded) medicines, it is apparent that these products have gained the public’s trust.

That confidence in the quality of generic drugs, which are usually lower in prices, has resulted in a rise in their patronage and, in the process, put pressure on branded medicines.

Once looked at as unreliable or of doubtful quality, generic medicines have ceased to be “second-class citizens” in the pharmaceutical market. By and large, they have earned a reputation as affordable quality products.

In a recent discussion paper, the Philippine Competition Commission (PCC) said that, based on market research data, the widespread availability of generic drugs had reduced the prices of all types of prescription drugs.

The coming of age of generic drugs is evident from the acquisition by Ayala Corp. and Gokongwei Group of Companies, through their subsidiaries, of controlling interest in Generika Drugstore and The Generics Pharmacy (or TGP, as it is now advertised), respectively.

The financial resources and managerial expertise of those business conglomerates would undoubtedly contribute to a more efficient production and distribution of quality generic drugs.

Since their corporate reputation is on the line, they have to make sure their products live up to the expectations of customers.

The acceptability of generic drugs by the public was iffy when the Generic Act of 1988 (Republic Act No. 6675), which required doctors to indicate the generic name of the medicines they prescribe, was enacted.

Two decades later, Congress passed the Cheaper Medicine Act of 2008 (Republic Act No. 9502) to encourage the manufacture and sale of those medicines by, among others, relaxing the rules on patents of prescription drugs.

During the congressional deliberations on those laws, foreign pharmaceutical companies raised strong objections to their enactment on the grounds that, among others, they violate the contract between doctors and patients, impair their patent rights and would discourage foreign investors from investing in the Philippines.

Although the Generic Act was primarily aimed at making the cost of certain drugs more affordable to the public, its effective implementation resulted in unintended consequences on the prices of branded medicines.

With the quality of generic medicines on a par with and less expensive than their branded counterparts, many financially challenged Filipinos, who constitute the majority of the populace, have been opting to buy the former.

Their confidence in doing that is bolstered by the fact that, as required by law, the generic name of the medicines their doctors had prescribed is written in the prescription slip.

It also helped that the government engaged in a massive information campaign to acquaint the public with generic drugs and encourage their availment because of their comparatively lower prices.

Under these circumstances, the manufacturers of branded medicines that were adversely affected by the popularity of their generic drug counterparts found themselves under pressure to review their pricing mechanism lest they lose their market.

With the favorable shift in the public’s perception about generic drugs and market forces reflecting clearly that situation, the reduction in the prices of branded medicines, as pointed out by the PCC study, became inevitable.

This development proves that healthy competition in business under conditions mandated by law redounds to the best interests of the public.

Remember the saying “if you can’t beat them, join them”? Well, some local pharmaceutical companies that once produced branded medicines only have branched out to the manufacturing and distribution of generic drugs.

They had sensed (and rightfully so) that those medicines are the wave of the future in this country and so they have no choice but ride on it if they want to maintain their viability. INQ

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