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A STUDY OF THE INDIAN PHARMACEUTICAL SERVICES SECTOR

GENERICS VS BRANDED DRUG PRESCRIPTIONS

OBJECTIVE
Two existent markets Branded Markets Unbranded Markets/Generics Objective
Our project is an overview on these two exhaustive pharmaceutical markets, and the various drivers and factors that affect the growth of these two markets

OVERVIEW OF PHARMACEUTICAL MARKET


Branded Markets:
Countries like India, Brazil, Russia, Mexico, etc. are branded in nature. Consumers tend to purchase the exact brand prescribed by the doctor even if the chemist offers a different/generic version available at a low cost.

Unbranded Markets/ Generics:


Developed countries like US, UK and some European countries are known as unbranded markets. Here, instead of prescribing the brand, the doctors prescribe the molecule or API (with the dosage) for a particular disease. 95% of the population has medical insurance. Hence, the insurance companies decide which generic drugs will be covered by the insurance; understandably these will be the ones which are sold at the lowest costs.

GROWTH DRIVERS OF PHARMACEUTICAL SECTOR


Increasing incomes & healthcare spends to spur domestic growth Significant patent expiries in developed markets present good growth opportunities for Indian generic companies Emerging markets to become the next destinations for pharmaceutical companies M&A a potential catalyst Bio-similars potentially a big long-term driver

FUTURE OUTLOOK OF PHARMACEUTICAL SECTOR IN INDIA


The Pharmaceutical sector in India is expected to show robust growth in the next few years driven by growth in all 3 segments viz.
Domestic Formulations which are expected to grow at ~15% Exports which will see huge growth due to the patent cliff in 2012 and emerging markets like Brazil, Mexico, South Africa driving growth CRAMS which is expected to grow at a rate of around 13% globally.

Indian companies have the largest number of US FDA (Food and Drug Administration) approved facilities outside US. Regulatory filings for around 70% of the drugs are going off patent in 2012.

MARKET COMPARISON USA AND INDIA


USA move from prescription of Branded drugs to generics 1970
By 2003 generic drug prescriptions represented 43% of all prescriptions written and 47% of new (non-refill) prescriptions (IMS Health, 2004)

The Indian picture


Drugs worth 48,000 crore are sold every year by over 5 lakh chemists and about 10,000 crore in hospitals and clinics. In 2010, the health ministry had asked doctors in over 300 central government hospitals, clinics and autonomous institutions under it to prescribe the generic equivalent along with the brand. Plans to launch an awareness campaign to educate the public about the benefits of buying generic drugs Aims at helping patients avail themselves of free drugs for a wide range of ailments in government hospitals. while bringing down, for the government, the cost of procuring the drugs. Delhi Governments Jan Aushadhi programme. Under the initiative, launched last year, medicine outlets in the hospitals will sell low-cost version of drugs.

RESEARCH OBJECTIVE, METHODOLOGY AND SAMPLING


Objective
Study public opinion regarding the implementation of this initiative in all state run hospitals/clinics as well as private clinics and practices and to thereby suggest a course of action for the health care services sector in India which involves doctors, patients, pharmaceutical companies and pharmacists as key stakeholders and the Government as a key influencing factor.

Methodology

Secondary data: Economic Times, The Hindu as well as reports published by McKinsey and KPMG on the Indian Pharmaceutical Industry Primary data Online questionnaire was floated and responses collected from 224 respondents

Sampling decision

Majority of respondents were from Tier I cities, keeping in mind where the initiatives have been launched thus far. Due to unavailability or limited availability of individuals from Tier II and Tier III cities, the results of the study are more directly relevant for interpretation of Tier I , popularity, awareness and scalability.

SPSS was used to analyse the survey results along with Microsoft Excel, to find patterns and traits in respondents behaviour.

SPSS OUTPUT 1
Cross-tabulation between Preference and Gender

Inference
Gender
99 100 90 80 70 60 50 40 30 20 10 0 A Doctor prescribing both, the generic as well as branded name of the medicine A Doctor prescribing only the brand name of the medicine (e.g Crocin) A Doctor prescribing only the generic name of the medicine (e.g Paracetamol) 3 9 39 23 51 F M

SPSS OUTPUT 2
Family physician

Inference
Do you have a family physician?
78 80 70 60 50 40 30 20 10 0 A Doctor prescribing both, the generic as well as branded name of the medicine A Doctor prescribing only the brand name of the medicine (e.g Crocin) A Doctor prescribing only the generic name of the medicine (e.g Paracetamol) 9 19 45 No Yes 60

13

GRAPHS
Respondents who are unlikely to visit a doctor for a minor illness such as low fever, cold, cough etc. feel that the doctor should prescribe both the generic as well as brand name of the medicine.

14% A Doctor prescribing both, the generic as well as branded name of the medicine 62% A Doctor prescribing only the brand name of the medicine (e.g Crocin) A Doctor prescribing only the generic name of the medicine (e.g Paracetamol)

24%

This basically signifies that the above group of respondents most probably have a basic knowledge of illness and the remedies that go with it. So they are confident that they can move a step further and buy their medicines given the generic name of the drug used.

How likely are you to visit a Dr for having mild cold,fever etc.
60 60

50

40

34 Likely Unlikely Very Likely Very Unlikely

30

20

15

17 9

15

10

4 1

0 A Doctor prescribing both, the generic as well as branded name of the medicine A Doctor prescribing only the brand name of the medicine (e.g Crocin) A Doctor prescribing only the generic name of the medicine (e.g Paracetamol)

Majority of the respondents who feel that the doctor should prescribe the generic name of the medicine want the same because they would get cheaper options of buying the same medicine.

Majority of the respondents who feel that the doctor should prescribe the brand name of the medicine want the same because they trust the doctor completely.

You would Visit a Doctor prescribing only the generic name for getting cheaper options of buying the medicine
120 102 100 80 60 40 23 20 0 A Doctor A Doctor A Doctor prescribing both, prescribing only prescribing only the generic as the brand name the generic well as branded of the medicine name of the name of the (e.g Crocin) medicine (e.g medicine Paracetamol) 12 21 6 Agree Disagree 120 100 80 60 40 20 0

You would like to visit a doctor prescribing only the brand name because you trust the doctor completely

Agree Disagree

A Doctor prescribing both, the generic as well as branded name of the medicine

A Doctor A Doctor prescribing prescribing only the brand only the name of the generic name medicine (e.g of the Crocin) medicine (e.g Paracetamol)

CONCLUSION
62% of the respondents feel that the doctor should provide the brand name as well as the generic name of the medicine and 14% of them said that they would be better off with only the generic name of the medicine.
This is a significantly huge percentage of the respondents that are willing to go ahead with the change and are demanding a better service from the doctors. The major reason behind this that they would get cheaper options of buying the same medicine. Although this is not the case always as sometimes the reverse can also be true. The benefit from implementing this would be that the role of medical reps, who influence the doctors to prescribe the medicine of their brand by wooing (rather bribing) them with various attractive gifts and offers, would be reduced and such malpractices would come to a halt.

THANK YOU

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