The difference between pure generics and branded generics:
A patent for an innovator drug lasts 20 years, and only after this patent expiry, can pure generics enter the market. Pure generics contain the same chemical substance and are equivalent to the innovator drug in terms of quality, strength and performance. However, they don’t carry the same costs of manufacturing (including research and development) as the innovator. Pure generics go through FDA approval processes and the ANDA process (Abbreviated New Drug Application) to ensure it releases the same amount of the active pharmaceutical ingredient into a patient’s bloodstream in the same amount of time as the innovator drug. A branded generic is also a generic version of the medicine, but sold under a trusted brand name. It is also sold only after patent expiry period and goes through the same approval processes as a pure generic.
How are branded generics placed in the market?
Branded generics are priced higher than pure generics but lower than the innovator drug. There is a huge opportunity for branded generics as patients are choosing them over pure generics and innovator drugs, especially in low and middle income countries.
Here are the reasons why:
- In low and middle income countries, it is usual for patients to largely pay out of their own pockets for prescription medicines and over the counter products. Often, after food, this is the largest expense for a household. Some reasons for patients bearing the costs are cuts in healthcare spending and an increase in lifestyle related diseases. But while pure generics are cheap, patients are about counterfeits and adulterated medicines among generics. Low cost pure generics can do more harm than good because of low quality ingredients of unscrupulous manufacturers in countries with weak regulations and substandard norms, which leads to doctors upping the dosage or medicines not working at all. Since it’s getting harder to track pure generics, patients are spending more on a branded generic which comes from a trusted manufacturer.
- There is a shift even among knowledgeable and affluent populations who are choosing branded generics from a trusted source. The value that they provide is in differentiation. For example, region specific requirements (taking into account patient needs and usage) during packaging and formulation stages. This is a benefit over pure generics (which are undifferentiated), and innovator medicines which carry high development costs that are passed on to the patient.
- Manufacturers of branded generics spend time and money on developing a relationship with retailers, pharmacies and sales reps. This reinforces accountability from the manufacturer as well as building awareness at healthcare facilities and with staff. This constant feedback can improve delivery and reduce errors.
- With many pharmaceutical products coming off their patent period, growth in branded generics will follow.
Huge opportunity ahead:
In Brazil and India alone, the middle class in each country (the main buyers of branded generics) will hit 9.4 million and 200 million respectively this year. With GDP growth meaning higher disposable incomes, spending on health will rise along with drug consumption. Added to this, an increase in aging populations and rise in chronic diseases means patients are looking for meaningful solutions and are now placing equal value on quality as well as cost. For these reasons, branded generics are a safe option and considered cost effective.