Generic drugs are the replicas of original drugs. These can be divided into two categories, authorized and unauthorized. Authorized generic drugs are the medicines which comply with the international code, Trade-Related aspects of Intellectual Property Rights (TRIPS), while the drugs which infringe the patents of brand-name drugs and do not comply with this code are regarded as unauthorized generic drugs. Recent publications by scholars (Ryan, 2009; Kaplan et al. , 2012; Gonzalez et al. , 2008; Grabowski et al., 2011) have discussed the advantages and disadvantages of manufacturing authorized and unauthorized generic drugs.
This issue is controversial because it involves the interests of a wide range of stakeholders, such as pharmaceutical companies, governments and the general public. Although there are numerous factors involved, opinions on the situation can be divided into four general areas, political, economic, health-related and technological. Those who support manufacture of generic drugs, such as Ford et al. (2007, cited in Kaplan et. al. ,2012 , p. 215) and Gonzalez et al.
(2008), primarily agree with the potential benefits of alleviating the monopoly of branded remedies in the market and providing alternative medicines with lower prices. Those who support the opposite view, however, like Ryan (2009), point out the possible consequences of triggering diplomatic conflicts and a lower incentive of investments in the pharmaceutical development. The purpose of this essay, therefore, is to examine the pros and cons of manufacturing generic drugs from these four aspects, taking a supportive stance on the manufacture of authorized generic drugs and a stance against the production of unauthorized generic drugs.
Sell (1995, 1988, cited in Ryan, 2009, p. 1083) notices the favorable policies of developing countries for the production of unauthorized generic drugs. Ryan (1995, cited in Ryan, 2009, p. 1083) notes that the manufacture of these drugs will trigger diplomatic conflicts due to the violation of TRIPS. Moreira (1990 cited in Ryan, 2009, p. 1083) expands on the impacts of these conflicts with a reference to the subsequent revenges which were launched by the US government such as economic sanctions for the goods from Brazil because of their favorable position for producing unauthorized generic
remedies. He presents a strong justification for this negative political consequence (Moreira, 1990, cited in Ryan, 2009, p. 1083). The economic impacts of producing generic medicines can be divided into two categories, microeconomic and macroeconomic. From the microeconomic perspective, scholars, like Kaplan et al. (2012) and Gonzalez et al. (2008), support Grabowski et al. ’s (2011) claim that the sale of both authorized and unauthorized generic medicines will decrease the market occupancy of brand-name drugs. Gonzalez et al. (2008) and Grabowski et al.
(2011) attribute this phenomenon to the markdown of the generic remedies. Kaplan et al. (2012) emphasize that manufacturing these medicines can alleviate the problem of a monopoly of branded drugs. However, scholars diverge on the importance of the advent of these generic remedies which leads to a lower market share of brand-name drugs. Gonzalez et al. (2008) argue that the main reason is the switch of physicians’ choices from using original branded medicines to the other branded medicines in the same category, while Grabowski et al. (2011) contend that the lower price of the generic drugs is the main cause.
From the macroeconomic perspective, Teece (2000, cited in Ryan 2009, p. 1084) implies that the sale of unauthorized generic remedies will undermine the ‘competitive advantage’ of a country. He points out that the elements for turning ‘intangible assets’, including pharmaceutical knowledge, into predominant industries are the patent laws for curbing the production of unauthorized generic medicines (Teece, 2000, cited in Ryan, 2009, p1084). Under a rampant atmosphere of producing these drugs, factories will launch these remedies to the market, threatening the interests of branded pharmaceutical firms (Ryan, 2009).
Therefore, without these laws, the incentive of investments of these firms will be weakened (Ryan, 2009; Dam, 1994, cited in Ryan, 2009, p1084; Teece, 1987, cited in Ryan , 2009, p1084), leading to a weaker national competitiveness and a slower macroeconomic growth. The impacts of manufacturing generic drugs on the aspect of health care can be divided into three categories, the expenditure of public health care, humanity and the efficacy of the treatments. Research conducted by Andersson et al.
(2007) shows that dispensing authorized generic remedies can reduce the medical fee of patients and the subsidies provided by governments, resulting in a lower medical expenditure in both developing and developed countries (Gonzalez et al. , 2008; Cameron et al. , 2012; Kaplan et al. , 2012). Patel (1978a, cited in Patel, 1983, p. 195) expands on this merit, associating it with a better health care, such as more choices of the pharmaceuticals, and introduction of new equipments, which is triggered by the switch of capitals from the expensive branded drugs to other aspects of health care.
Gonzalez et al. (2008) further explain the benefit of dispensing generic medicines from the perspective of the quality of these remedies, emphasizing a positive relationship between the high bioequivalence and the high therapeutic efficacy. Patel (1983) emphasizes the importance of using authorized generic medicines in developing countries with humane reasons. He notices that the demand of health care in developing countries is greater than that of the developed countries due to the higher population and poor hygienic condition (Patel, 1983).
Kumarasamy (2004) points out that the lower price of the generic remedies enables physicians to save more people in plagues and treat fatal diseases such as AIDS. Therefore, Patel (1983) suggests using these cheaper alternatives in order to reduce the high death rate of developing countries. However, scholars like Meredith (2003), Gauzit and Lakdhari (2012) and Borgherini (2003) unanimously challenge Gonzalez et al. ‘s (2008) claim about the high therapeutic efficacy of generic drugs.
The existing criteria of bioequivalence depend on the mean bioequivalence but not the bioequivalence of individual molecules (Meredith, 2003). Meredith (2003) stresses that slight change of the ingredients of these drugs can trigger a lower healing efficiency or even fatal syndromes. Both the studies conducted by Crawford et al. (2005) and Borgherini (2003) show a high risk of curative failures for using the generic antiepileptic and psychoactive drugs. These studies provide a strong justification of Meredith’s (2003) argument.
From the technical perspective, Arora, Fosfuri and Gambordella (2001, cited in Ryan, 2009, p. 1080) remark that a low motivation for partnerships between companies and investments are likely to result from a rampant atmosphere for the production of unauthorized generic medicines. As pharmaceutical technology leakage may result from an unrestricted manufacture of these remedies (Arora et al. , 2001, cited in Ryan, 2009, p. 1080). To further explain this negative outcome, Ryan (2009, p. 1086) stresses that the lack of “dense knowledge integration” will contribute to a stagnant pharmaceutical growth.
Scholars have taken different stances on this controversial issue and provide a number of cogent reasons and data to support their stances. After considering all these arguments, I have taken a supportive stance on the production of authorized generic medicines and a stance against the manufacture of unauthorized generic drugs. Most of the negative outcomes, such as political conflicts, a stagnant macroeconomic and technical development, originate from the manufacture of unauthorized generic drugs and these medicines violate TRIPS.
Therefore, it is not reasonable to support the production of these drugs. Although the use of generic remedies may cause therapeutic failures or complications, these accidents maybe occasional and the merits of using authorized generic medicines, such as a lower medical cost, alleviating the monopoly of branded drugs and saving more people in developing countries, are notable. Regarding the instability of these drugs, I suggest that advanced pharmaceutical techniques are necessary to tackle this problem. Overall, the use of authorized generic drugs is beneficial to mankind.
References Andersson, K. , Bergstrom, G. , Petzold, M. G. and Carlsten, A. , 2007. Impact of a generic substitution reform on patients’ and society’s expenditure for pharmaceuticals. Health Policy, 81(2–3), pp. 376-384. Borgheini, G. , 2003. The bioequivalence and therapeutic efficacy of generic versus brand-name psychoative drugs. Clinical therapeutics, 25(6), pp. 1578-1592. Cameron, A. , Mantel-Teeuwisse, A. K. , Leufkens, H. G. M. and Laing, R. O. , 2012. Switching from Originator Brand Medicines to Generic Equivalents in Selected Developing Countries: How Much Could Be Saved?
Value in Health, 15(5), pp. 664-673. Crawford, P. , Feely, M. , Guberman, A. and Kramer, G. , 2006. Are there potential problems with generic substitution of antiepileptic drugs? : A review of issues. Seizure, 15(3), pp. 165-176. Gauzit, R. and Lankdhari, M. , 2012. Generic antibiotic drugs: Is effectiveness guaranteed? Medecine et Maladies Infectieuses, 42(4), pp. 141-148. Gonzalez, J. , Sismeiro, C. , Dutta, S. and Stern, P. , 2008. Can branded drugs benefit from generic entry? The role of detailing and price in switching to non-bioequivalent molecules.
International Journal of Research in Marketing, 25(4), pp. 247-260. Grabowski, H. G. , Kyle, M. , Mortimer, R. , Long, G. and Kirson, N. , 2011. Evolving Brand-Name And Generic Drug Competition May Warrant A Revision Of The Hatch-Waxman Act. Health Affairs, 30(11), pp. 2157-66. Kaplan, W. A. , Ritz, L. S. , Vitello, M. and Wirtz, V. J. , 2012. Policies to promote use of generic medicines in low and middle income countries: A review of published literature, 2000–2010. Health Policy, 106(3), pp. 211-224. Kumarasamy, N. , 2004.
Generic antiretroviral drugs—will they be the answer to HIV in the developing world? The Lancet, 364(9428), pp. 3-4. Meredith, P. , 2003. Bioequivalence and other unresolved issues in generic drug substitution. Clinical Therapeutics, 25(11), pp. 2875-2890. Patel, M. S. , 1983. Drug costs in developing countries and policies to reduce them. World Development, 11(3), pp. 195-204. Ryan, M. P. , 2010. Patent Incentives, Technology Markets, and Public–Private Bio-Medical Innovation Networks in Brazil. World Development, 38(8), pp. 1082-1093.