Anti-competitive pseudo-generics increase medicine prices
JOBURG – South African consumers are paying more for medication long past the expiry of a patent as a result of pseudo-generics.
According to Erik Roos, chief executive of Pharma Dynamics, a leading generic pharmaceutical company, South African consumers continue to pay more for medication long past the expiry of a patent due to the increasing occurrence of pseudo-generics.
“Pseudo-generics are often identical in all aspects to the branded product, but carry a different name and are sold at a slightly lower cost, thereby fooling customers into believing it is a true generic,” said Roos.
He said according to research, an originator’s profit drops by between 30 per cent and 40 per cent once a true generic version is introduced, while market share diminishes by up to 80 per cent. This is why Roos believes that most originator companies release pseudo-generics or clones to ensure their continued price advantage.
“The difference in cost between a pseudo-generic and true generic product can be up to 40 per cent, but because patent medicine producers have a first-mover advantage by launching these pseudo-generics before the patent has expired, they maintain market domination.
“This crowds out natural competition as generics struggle to infiltrate the market and ultimately this practice pushes up the price of medicine.”
He also notes that the National Department of Health rules against one company selling the same medicine at a different price, but pharmaceutical firms have discovered a loophole in the system where they register a subsidiary with a different trade name to bypass the rule.
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He added that this practice is adopted by many originator companies in South Africa and abroad and international reports confirm the non-competitive nature of this practice which often leads to higher long-term medication prices.
“The debate over affordable medication is hugely emotive in our country where 12 million people live under the breadline and the poor often have to forgo potential life-saving treatment because of the high price tag on medication.”
Roos said pseudo-generics increase the price of medication in the country because of non-competitive practices and only benefit big pharmaceutical companies.
How can consumers distinguish between pseudo-generics and true generics? Roos advised consumers to ask their doctor or pharmacist.
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