Discussion on Generic Drug


Discussion on Generic Drug

Generic Drug

A generic drug is a medicine not covered by a patent. A patent is granted to an individual or a company that discovers a new drug. The patent is a means of rewarding innovation as it prevents the discovery from being replicated for a fixed period of time by any person or company besides the innovator. It thus protects the innovator's intellectual property. A patent can be granted on the drug itself which is known as a product patent and/or on the process of making that drug, called a process patent. A drug normally becomes a generic one when the patent on the drug lapses. The word "generic" is also used to define the scientific name of the drug. For instance, the generic name of Crocin is Paracetamol. In countries where the law of the land allows a product to be patented, the patent is usually granted for 20 years from the date of application. The logic is that in the given time frame the innovator should be able to recover the investments made in discovering the chug, besides making large enough profits to plough back into research and development, which is an expensive process.

Patented drugs are sold at a premium compared to off-patent drugs that treat the same ailment. Most countries of the developed world recognise and grant product patents. Some developing countries like South Africa also follow the same pattern. Countries usually incorporate safeguards in their Patent Laws to prevent the misuse of patent provisions. For instance, some countries provide for compulsory licensing, i.e., citing public interest, the government has the right to grant a manufacturing licence to a firm other than the innovator to make a drug even while it is under patent. Nor does it have to take the permission of the innovator.

In India, the Patents Act of 1970 does not allow products to be patented. It is only the process that can be patented, that too only for seven years from the date of application. Prior to 1970, product patents were recognised. But the law was changed to create an environment where local competition could thrive and expensive patented medicines would not bum a hole in the common man's pocket. In the past 30 years, the domestic drug industry has grown by producing chugs patented in the innovator's country by a different process of selling and successfully making them in India at a fraction of the innovator's price. This process of successfully making a drug by a different process is referred to as reverse engineering - taking a final product and working backwards to reproduce it by a different process. In India, strictly speaking, all drugs are generic.

In 1995, India became a signatory to the World Trade Organisation (WTO). For this, it had to accept certain conditions. India has to comply with the Trade Related Intellectual Property Rights (TRIPs) by making a transition to recognising product patents by 2005. From January 1, 2005, new drugs - where the application for patent has been made after 1995 - can be patented, if they are found to be new. Suitable amendments have to be made to the Patents Act of 1970 by the government. The other reasons why this distinction has assumed importance is because the domestic drug industry, having come of age, has now made strides in exports and begun selling generic drugs in developed and developing markets where product patents are recognized. This is done by waiting for a product patent to lapse and being among the first to hit the market with their generic version.


Some companies like Cipla have already announced the making of cheaper generic drugs for diseases like Acquired Immuno- Deficiency Syndrome (AIDS) that have assumed epidemic proportions even in countries where the drug is currently under patent. In such countries, the prohibitive prices of patented drugs have allegedly compounded the problem by making the drugs unaffordable to many. This is currently a moot point. In South Africa, where AIDS is a raging problem, 39 multinational companies (MNCs) were forced to drop a case against the South African· government, challenging provisions of compulsory licensing, after they were condemned for putting profit before life. 

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