Understanding Generic Medicines

Medical Scheme members are well aware of the ever-increasing costs associated with Medical care, so, not surprisingly, any strategy employed by a Scheme aiming to reduce costs will be welcomed.  And since medicines are one of the biggest cost factors for a Medical Scheme, this would be the obvious place to start the cost-cutting exercise. Generic drugs are becoming increasingly available in all areas of medicine and considering that they are generally less expensive than their brand-name or ethical equivalents, they become an extremely effective tool for the management of Medical Scheme expenses.

What is a ‘brand-name’ or ‘ethical’ drug?

When a pharmaceutical company researches and develops a new drug, the product is patented and given a brand name. This is then considered to be an ‘ethical drug’ and is patented by the pharmaceutical company. The company then has exclusive rights to sell the drug under its brand name for the duration of the patent.

What is a ‘generic’ drug?

A generic drug is a copy of the original drug that may be sold once a company’s patent on a brand-name drug has expired.  Generic drugs have the same active ingredient(s) as the original drug. Generic drugs are typically cheaper than the original or brand-name drug as they don’t have the research and development costs that were incurred by the originating company. Furthermore generic pharmaceutical companies compete with each other thus driving down the costs of medicines.

Do brand-name drugs work more effectively than generic drugs? Are generic drugs safe?

Generic drugs may have a different name, or might look or taste different because of the choice of inactive ingredients such as colouring, binding and flavouring. But, by law, the active ingredient(s) in the generic and brand-name products must be exactly the same.

The drug regulatory authority of each country, which in the case of South Africa is the Medicines Control Council (MCC), has strict criteria that must be applied before a generic drug is registered.  No drugs may be sold without this approval. All pharmaceutical manufacturers must comply with ‘Good Manufacturing Practices’ as prescribed by the MCC and they are regularly inspected.

In April 2010, the Registrar of the MCC released an update to their Guidelines on the substitution of medicines:

Previously, the guidelines stipulated medicines which could not safely be interchanged with generic alternatives without careful monitoring and evaluation. But the MCC has now removed all previous medication regarded as non substitutable (for example certain medicines used to reduce blood pressure). And the only products now considered non-interchangeable are the class of drugs known as Biosimilars. These are products such as Insulin, and are non-interchangeable due to their large, complex nature.

The updates to the Guidelines are in line with industry advancement in the general quality of generic alternatives. Competition for market share is strong and, as a result, in recent years there has been a change in the way Research and Development (R & D) companies participate in the generic environment.

R & D companies are now actively marketing their own products, repackaged as generics at competitive prices. This has resulted in a fierce competition in price, but perhaps more importantly, also in terms of competition in the quality of generic products. Both bode well for the consumer.

When should you use a generic drug?

In May 2003, the law regarding substitution of an original drug with a generic equivalent changed. Now, by law, your pharmacist should advise you on the availability and benefits of a generic equivalent drug. He or she should dispense a generic equivalent drug unless:

• your doctor has specifically forbidden substitution of the prescribed medication with a generic equivalent
• the generic equivalent is more expensive than the prescribed medication
• the product has been declared non-substitutable by the MCC
• you, as the patient, decline the use of a generic product after being briefed by the pharmacist.

Benefits of generic substitution

Generic substitution can reduce the price of your medication and assist you in managing your medication benefit to ensure that you maximise the value of your Medical Scheme benefits without adversely affecting your health. This in turn helps to contain total Scheme medicine expenditure, which assists the Scheme in minimising annual contribution increases.