National digital drugs databank will help address ‘information asymmetry’ in pharma space: CCI study

A national digital drugs databank will help in addressing “information asymmetry” as well as provide key inputs in mapping the regulatory needs of different states, according to a pharmaceutical sector study conducted by the Competition Commission of India (CCI).

The fair trade watchdog, which works on ways to foster competition and curb anti-competitive practices in the market study found that brand competition overrides price competition in the domestic market where generic formulations are marketed with distinct brand names.

Generic drugs play an important role in bringing down drug prices, thereby reducing healthcare costs and improving access. In India, generics dominate pharmaceutical sales, and the generic manufacturing within each molecule/formulation market is characterised by the presence of multiple manufacturers.

The Competition Commission of India (CCI) has pitched for a multi-pronged and harmonised regulatory response to the issue of drug quality, including setting up a national digital drugs database.

“A comprehensive, online, centralised drug databank consolidating real-time data on active pharmaceutical manufacturing companies in the country, therapeutic class-wise/formulation-wise approved branded/unbranded products along with their manufacturing and marketing entities may be created, maintained, and made accessible to regulators, industry, physicians and consumers,” it noted.

Such a database, the watchdog said, will help address information asymmetry and provide important inputs in mapping the regulatory needs in different states.

Information gaps on grant of licences, inspections and prosecutions for non-compliance, among others, could be bridged through real-time data that could be published on a central online portal, it added.

As per the study released yesterday, a pre-requisite for competition in generics to move from non-price to price dimension is to dispel concerns about drug quality.

Promotion/facilitation of generic entry, prescription by generic drug name and substitution between generics by chemists, which are reckoned as vital pro-competitive instruments, can yield the desired outcome of exposing pharmaceutical expenditure to significant price competition, subject to certain conditions.

“…only when all generic drugs in a therapeutic class in their unbranded and branded versions are considered interchangeable and equally efficacious by stakeholders,” the study noted.

Another suggestion is to have an institutional quality-signalling mechanism through the printing of standard compliance marks on unbranded drugs, which meet the quality standards.

“This may provide the necessary confidence to the physician community to prescribe generic names. This can also boost consumer confidence in unbranded generic drugs,” the study said.

Uniform and effective implementation of existing quality standards, better transparency and quality control across the supply chain as well as in public procurement are among the other suggestions.

About online pharmacies, the study said such entities should adopt self-regulatory measures in the areas of collection, use, and sharing of data and privacy.

“However, for safeguarding patient privacy and protecting sensitive personal medical data, necessary regulations need to be enforced until the country legislates its data protection law,” it added.