Summary:
In pharmacies across India, one salt of a particular medication is priced around 80% more than another. Same salt but different brands and thus different prices. And have you pondered why? Practically, there shouldn’t be any reason why the same chemical should be priced more than 80% on medicines, but if we tend to see intricately, we will be able to see many different factors. Why is it cheaper? Is it worth saving money? These are answers every potential Indian medicine buyer should have.
Key Takeaways
- Generic medicines include the same active pharmaceutical ingredient (API), or salt, as the branded medicines, and therefore have the same clinical efficacy.
- Prices of generic medicines in India are 70%-90% less than the branded medicines, and in all cases, the branded version is simply charging more to recover their brand investment, marketing expenditures, distribution costs, and research.
- Branded medicines are not clinically superior to quality generic medicines.
- Generic medicines in India are required to meet the same IP (Indian Pharmacopoeia), BP (British Pharmacopoeia) or USP (United States Pharmacopoeia) standards as branded medicines. There are no lower quality standards for generics.
- The primary quality differentiator of generic medicines is the overall GMP (Good Manufacturing Practice) compliance of the manufacturing facility. A generic medicine with quality manufacturing GMP certification is equivalent to a branded medicine of quality manufacturing.
- Indian families can save between ₹10,000 and ₹2,00,000 over 5 to 10 years for each patient with chronic conditions by replacing brand medicines with quality generic medicines.
Introduction
Here is a conversation that happens at Indian pharmacies every day, maybe thousands of times across every city and town in India.
A patient hands a prescription to a pharmacist. The pharmacist reaches for a medicine. The patient sees the price, ₹120 for a strip of 10 tablets, and pauses. “Is there a cheaper option?” The pharmacist says yes, as he points to the generic medicine for ₹22. Other times he doesn’t say anything, since the branded option generates more profit.
The patient, with no way to tell the quality of the generic option, ends up buying the branded one. Branded builds up trust with consumers with their strong marketing gimmicks and distribution channels. This happens even though the patient cannot afford to spend money on the more expensive option, because the patient doesn’t have the info to make the purchase.
This information gap, between the science of medicine and generic equivalence, can cost Indian families thousands or lakhs of rupees each year. This guide addresses that gap.
What is Meant By Salt Or Active Pharmaceutical Ingredient in Medicine?
In medicine, salt (also referred to as Active Pharmaceutical Ingredient), is the specific chemical compound that brings about the therapeutic effect. It is the chemical compound that interacts with the biological system and helps treat the ailment, be it lower blood pressure, lower blood sugar, control cholesterol, and combat infection, among others.
Everything else found in a medicine tablet, including fillers, binders, coating material, colourant, flavouring, and capsule, are excipients. They hold the tablet together, determine the rate of release of the API, and protect the API from decomposition. The excipients do not produce any curative effect.
The salt is what heals; the brand is what sells.
From a medical perspective, a generic medicine with the same API as a branded medicine brings about the same therapeutic effect of lowering or negating the effects. The brand name on the packaging, the coating colour, and the embossing on the tablet surface are irrelevant to the efficacy of lowering the blood sugar.
Reasons We Need Branded Medicines
While we do not need to think that branded medicines are necessarily better to understand their existence, we can see that there is logic to the branded medicines’ higher prices:
- The Pharmaceutical Market and Incentives
The invention phase of a new drug involves an immense amount of work from identifying candidate molecules, synthesis of drug candidates, testing, and clinical trials before it is approved for sale by the government. The costs associated with developing a new drug can range from USD 1 to 3 billion, and can take over a decade to recoup.
The patent system offers an incentive to invest in new drugs. When a drug is approved, a pharmaceutical company is awarded a patent for approximately 20 years, and competitors cannot manufacture that drug during that time. This provides a company with the opportunity to recoup its investment by charging patients a premium.
Until the patent expires, that drug is the only one of its kind, and price is driven by market demand.
- The Patent System and Drug Development
Developing a new medicine from the starting point of choosing a target molecule, to the completion of preclinical trials and the completion of Phase I through Phase III clinical trials, regulatory approval and post-market surveillance and all of that in between, is cost-prohibitive. Estimates of the full-service range between 1 and 3 billion USD.
A pharmaceutical company’s patent on a new medicine protects its investment. The company receives a patent after roughly 20 years. No other company may produce that medicine during that time. This creates an opportunity to charge prices that recoup the investment.
When a company has the only medicine of that kind, price is demand-driven.
- When Patents Expire: Generic Entry
When the patent expires, other parties can legally produce the same medicine with the same Active Pharmaceutical Ingredient (API) without having to perform a full-fledged clinical trial program.
- For generic manufacturers, the burden to prove whether the medicine is clinically effective is lifted as the originator has already conducted clinical trials.
- To ensure that the generic medicine is equivalent to the branded medicine, the generic manufacturer needs to prove that their formulation delivers the API into the bloodstream at a rate and extent comparable to the original within the limits of bioequivalence.
- Cost of development for generic manufacturers is markedly less, and they can charge prices that reflect the costs of Active Pharmaceutical Ingredients (API) only, rather than the cost of development.
The result: A medicine that cost ₹100 per tablet during the patent period can legitimately be sold for ₹10–20 per tablet once generic competition enters, since recovery of development cost is no longer a consideration.
Branded Generics: India’s Unique Market Structure
India’s pharmaceutical market has some added layer of complexity which makes the question of brands vs generics more complicated than in most other countries. In India, almost all products sold under a brand name are branded generics, and the original patent has expired. Many companies produce the same API, and each of these companies markets the API with a brand name. Examples of such brands include Crocin (paracetamol), Glycomet (metformin), and Ecosprin (aspirin). None of these medicines is under patent. They are branded variants of generic active ingredients.
In this scenario, the distinction is not between a patented original and a copy. It is between a heavily marketed branded product and a less marketed generic version of the same. Most of the price difference is due to the marketing investment, not a difference in the medicinal components.
The Price Difference Explained: Where the Money Goes
Let’s dive in to know why the same salt costs 80% more in branded form. This requires an understanding of the cost structure of a branded medicine. Some of the factors include:
- Research and Development Recovery
In the case of a bona fide original branded medicine, which is either within or immediately after the prescribed patent period, the R&D cost recovery is a legitimate component of the price difference. However, for a branded generic, where the API has been generic for many decades, this is negligible.
The marketing of medicines in India is substantial. It involves the cost of Pharma companies’ medical representatives’ visits, conferences sponsored by Pharma companies, and programs for doctors’ continuing medical education are a few of the branded medicine expenses for a company in India. Some Pharma marketing studies in India show that promotional spending may be approximately 20% to 35% of the retail price of heavily marketed branded medicines.
This is possibly the most important single component of the price difference between branded and generic medicines online in India. The price of medicines must cover the company’s marketing expenses in creating preferences of doctors in prescriptions and loyalty of the patients towards a particular brand.
Distribution margins are typically greater for branded medicines than for generic medicines, which creates an incentive for retailers and stockists to keep branded medicines in their inventory and motivates them to focus on their promotion.
- Packaging and Presentation
Generics lack the high-quality packaging and presentations of medicines offered by premium medicine brands, but there is no added benefit to the patient from packaging.
- The Actual Cost of Manufacturing
The cost of manufacturing, which includes API, excipients, energy, labour, and quality control, is mostly the same for branded medicines and generic medicines, which are manufactured on the same scale and with the same quality.
Practical Approach for Selecting Quality Generic Medicines
Given that the quality of the manufacturer is the major concern, the following is a practical approach for selecting quality generic medicines.
- Check WHO-GMP Or Schedule M GMP Compliance
Quality of generic medicines can be assessed by verifying whether the manufacturer has a WHO-GMP certificate or a good Schedule M GMP compliance record. This information, along with the manufacturer’s websites, can be found on the CDSCO’s registered manufacturers list, or can be confirmed by pharmacies that verify manufacturer quality.
- Use Jan Aushadhi Kendras
The Government-run Jan Aushadhi Kendras sell generic medicines that are approved and verified as quality medicines, at prices that are 50 to 90 per cent lower than branded equivalents. The Jan Aushadhi program ensures that its suppliers comply with certain quality standards, making it a reliable source of quality generic medicines.
- Consult Your Pharmacist
A good pharmacist can recommend quality generic medicines from reputed manufacturers and verify that the generic medicines available at their pharmacies are sourced from quality manufacturers.
- Consider Medkart
Medkart was established to address the quality verification concern in the generic medicines market. It verifies brands with generic medicines Manufacturer GMP compliance and quality credentials. Medkart’s platform provides quality information and price transparency. This addresses the uncertainty that discourages patients from using generic medicines.
Conclusion
Generic salt can cost over 80% less than branded salt because branded medicine pricing includes marketing expenses, brand building, and distribution costs as well as recovery of some R&D costs, none of which affect the medicine’s therapeutic effect. The API is the same. The pharmacology is the same. The quality of the generic from a GMP-compliant manufacturer determines the clinical outcome. The difference is in the packaging. This knowledge is practical and has the potential to save Indian families lakhs of rupees on medicine for the lifetime of the family while ensuring a high standard of healthcare.
FAQs
Q: Do generic medicines have different side effects compared to branded medicines?
The side effects of a medicine are primarily determined by its active pharmaceutical ingredient, which is identical in generic and branded versions. Occasionally, patients may react differently to specific excipients (fillers, coatings, colourants) that vary between manufacturers. If you experience an unexpected reaction after switching formulations, consult your doctor, but the therapeutic side effect profile remains the same.
Q: Can a pharmacist substitute a branded medicine with a generic without the doctor’s prescription specifying it?
Under India’s current regulatory framework, pharmacists are permitted to suggest generic alternatives but should ideally have the prescribing doctor’s confirmation before substituting. The government’s push toward generic prescribing, through National Medical Commission guidelines requiring doctors to prescribe by salt name, is progressively making generic substitution more straightforward and transparent across all pharmacy settings.
Q: Do generic medicines have a shorter shelf life than branded medicines?
No, shelf life is determined by the API’s chemical stability and the formulation’s preservation characteristics, not by whether the medicine is branded or generic. Both must meet pharmacopeial stability standards and carry manufacturer-validated expiry dates. Always check the expiry date before purchasing any medicine, branded or generic, particularly when buying in bulk quantities for long-term chronic condition management.
Q: Are children’s medicines and paediatric doses available in generic form?
Yes. Most common paediatric medicines including antibiotics, antipyretics, antihistamines, and chronic condition medicines for children are available in generic formulations including syrups, suspensions, and lower-dose tablets. Parents should confirm the correct paediatric dosage with their child’s doctor regardless of whether they use a branded or generic product, dosing accuracy is particularly critical for children given weight-based dosing requirements.
Q: Is it safe to buy generic medicines from online pharmacies in India?
Yes, provided the online pharmacy is licensed under the Drugs and Cosmetics Act and registered with the relevant state pharmacy authority. Licensed online pharmacies in India are required to dispense prescription medicines only against valid prescriptions and to source medicines from approved manufacturers. Look for the pharmacy’s licence number displayed on the website and verify it with your state’s drug controller authority before purchasing from any online platform.
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