Wonderer's Lust

How the Indian Pharma Market is different? Part 1

Branded Generics

Branded generics is a concept which is there primarily in India and a couple of other developing world pharmaceutical markets. However in India, it is firmly established ensuring in many cases the branded generic sells more than the original innovator brand itself.

This is a very interesting concept which shows the power of brands.A branded generic is a medicine that is bioequivalent to the original formuation, but is now marketed under a different brand name. In the US and most developed markets, the only brand is the original innovator and any purely generic( identical) medicine is sold for a cost savings and by the generic name.

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By definition a branded generic should not exist. It is effectively an oxymoron. However a brand by definition makes certain promises. A branded generic exists as the physician or the pharmacy does not trust all the generic’s in the market.

Indian Pharma market is a case study in itself. By one estimated there are nearly 13,000 pharma companies in India. With very loose regulations and big chances of substandard migration, doctors prefer brands that they can trust.

Thus , doctors prefer a couple of brand (or single ) for each molecule and they are dispensed by the local pharmacy. e.g Amoxycillin is the molecule which is sold under atleast  50 plus brand names  as a simple web search shows.

However the top 5-6 brand may be having as much as 50-60% market share leaving the rest to fight for very small market shares. Since the pharma market has such low levels of market concentration that anything above 10% market share is impressive.

So how do branded generics retain their customers?

The brand provide benefit on two levels-
a) Functional- Quality is the number one functional benefit. There could be other benefits like better dissolution, size of tablet, manufacturing technology etc,
b) Emotional- Doctor prescribes it for his relation with the medical representative and also his long experience of trust and experience with the brand

Thus it becomes very difficult to unseat or win over new prescribers for a generic brand as the doctor will not change his habit unless a major stimulus is given to change behaviors? This is the challenge for the product managers in the Indian pharma industry? How does their brand stand out in the crowd?

Branded generics are more expensive than normal  vanilla generics as the product cost contains the extra S&M cost. Also there is wide disparity of prices though the NPPA pricing move has rationalized many prices.

Branded Generics are here to stay and can be ignored by a company in the relevant markets only at its own peril. Else the investment in branded generic can give a long steady cash flow especially in the maturity stage.

Disclosure: I work in the Indian Pharma sector presently with exposure to the the US healthcare and pharma market too. All opinion expressed here is my personal opinion and has no link to my employer.

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