There is a widespread belief that brands serve only one master: brand owners. Branded products are considered more profitable and ensure that brand owners get a better price, greater loyalty, more business support in addition to providing the brand owner with legal protection and brand leverage opportunities.
In the book No Logo published in 1999, author Naomi Klein made the argument that with ever greater access to information (thanks to the Internet), consumers will realize that there is no There isn’t much difference between, say, a Nike branded shoe and an unbranded shoe sold in a supermarket. But we have not seen a rapid decline of brands in the 2000s and later, although digital media and social media have made a lot of product and brand information available to consumers.
Brand longevity across industries is driven by consumers finding brands useful. Brands save consumers time, effort and even money (from trial and error). In addition, brands provide consumers with a sense of trust and reliability. In some cases, brands endow their users with a sense of pride.
You might be wondering where generic brand name prescription drugs come in. Pharmaceutical brands have a multifaceted presence. There is the manufacturer or brand owner. Then there is the doctor who prescribes the brand. The patient who gets the brand name on their prescription. The pharmacist who interprets the prescription and provides the patient or caregiver with the correct brand or medication.
A pharmaceutical brand plays an important role in this whole chain of actors. Some of the players only know the name of the brand, some know much more including key ingredients etc.
Do we really need so many branded generic drugs when their key ingredients are the same? Why can’t all these branded generic drugs be sold under their pharmaceutical ingredient name? Why should a doctor prescribe a brand when they can just prescribe the name of the ingredient? Why can’t the pharmacist be told to dispense only unbranded generic pharmaceuticals? Won’t that make things easier for the patient, the pharmacist and the doctor?
These are perhaps the thoughts that prompted the National Medical Commission of Certified Physicians to write its recommendations.
On paper, the suggestions made to ban generic drug labeling seem logical. And seems to be driven by a desire to simplify the whole process. But is it so simple?
The Indian pharmaceutical market is probably the most diverse and complex of all markets. There would be more than 3,000 manufacturers/distributors of pharmaceutical products. These products are manufactured across India in over 10,000 factories. The number of Stock Keeping Units (SKUs) in the market may well exceed 1 lakh. The boom and competition in India’s pharmaceutical manufacturing sector has also driven prices down. India’s pharmaceuticals market is the world’s third largest in terms of volume, but only 14th in terms of value.
Although India’s doctor-patient ratio may not be at world standards, we still have 1.3 million allopathic doctors (not counting the million or more Ayurvedic doctors who also prescribe allopathic medicines) and 1 .4 million pharmacists.
Unlike many developed countries where all health care is in the hands of the government or a few large private sector players, in India the family doctor or general practitioner, specialists and nursing homes and private hospitals play a vital role.
If the market is so large and diverse, shouldn’t we opt for generic products? Why add to the confusion with brand name generics?
Brand image, as we saw earlier, plays a vital role in how consumers remember, buy and consume products. In the case of the semi-illiterate Indian consumer, brands play an essential role in simplifying their lives. This is all the more true in the case of branded generics. Compared to pharmaceutical names, branded generics have catchy and easy to read names. Remember that the name is written by the doctor, the prescription is carried by the patient to the pharmacy and filled at the pharmacy counter. Complex pharmaceutical names make this whole process fraught with pitfalls.
The other big problem in India is its geographical distribution and the proliferation of chemists across the country. In the absence of a brand name, the pharmacist can and will deliver the generic medicine of his choice. And given that there are more than 10,000 manufacturing units in the country, the drug it distributes may come from a poorly run factory producing substandard drugs. These companies are likely to flood the market with generic drugs of varying quality and entice pharmacists to make huge markups. Causing a greater crisis.
Finally, while multiple companies manufacture the same drug and sell it under different brand names, brand owners are incentivized to innovate, within the limits of what would be allowed.
The added benefit
In order to provide their branded generic offering with an added edge, Indian pharmaceutical companies have come up with innovations in branded packaging, tablet shape, tablet color coding for better patient recall, new delivery systems and more.
If companies are not allowed to continue using their brand, the incentive to innovate and compete disappears.
Will removing brand names lower prices? Unlikely since Indian drug prices are among the lowest in the world. Will removing brand names make doctors less receptive to agreements with pharmaceutical companies? Unlikely and the power equation will shift to the chemist, which is not a welcome outcome.
The basic argument for keeping branded generics is the same as for all brands. The received idea is that a brand only serves one master: the owner of the brand.
In fact, a brand plays an essential role in the lives of consumers, making the process of identification, purchase and memory easier and smoother. This is true of any brand in any category. This is also the case for the category of pharmaceuticals and branded generics.
The writer is an advertising veteran, best-selling author, freelance brand coach and the founder of Brand-Building.com, a brand advisor
August 26, 2022