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. Last Updated: 07/27/2016

Pharma Firms Find Drugs Bill Hard to Swallow

MTA bill set to sail through the Duma this fall would prohibit doctors from prescribing brand-name drugs to patients.
A controversial bill that the State Duma is set to pass after it reconvenes next month would prohibit doctors from prescribing specific, brand-name drugs.

Supporters of the measure, which passed a first reading in July, say that requiring doctors to use the international nonproprietary name, or INN, instead of a drug's brand name would cut consumers' pharmacy bills. If signed into law, this bill would give consumers greater freedom to choose from lower-priced generic drugs and their brand-name equivalents, the measure's supporters say.

Most medicines in Russia are purchased by consumers themselves and are paid for out of pocket.

The measure's opponents say that consumers' savings would come at the expense of their health. They warn that shortfalls in doctors' familiarity with INNs, as well as lax government controls over the quality of drugs, make the bill a potential health hazard.

"This piece of legislation affects everyone in this country because it deals with health care," said Sergei Boboshko, executive director of the Association of International Pharmaceutical Manufacturers, or AIPM.

In addition to influencing consumers, the new bill also steps on the toes of producers of brand-name drugs. AIPM, whose member companies account for 80 percent of pharmaceuticals produced globally, staunchly oppose the measure.

"This is a very political issue, as it touches on financial interests. There is a lot of lobbying on both sides," said Nina Sautenkova, a pharmaceuticals expert at the World Health Organization.

While Russia's $6.35 billion pharmaceuticals market is small by international standards -- global giant Pfizer spent $7.9 billion just on new drugs research last year --- it is expanding.

The market, 88 percent of which is dominated by generic drugs, is poised to reach $8.65 billion by the end of the year, according to research company Pharmexpert.

However, generic drugs can be sold under many trademarks. For example, a painkiller with the INN diclofenac is sold under the brand name Voltaren and other trademarks.

If the new bill becomes law, sales of branded generics could drop by as much as 20 percent, Pharmexpert senior analyst David Melik-Guseynov said.

This would be a painful blow to foreign producers, which account for 78 percent of the country's pharmaceuticals market by retail sales and produce about 85 percent of the country's branded generics, according to Pharmexpert.

The law's influence on consumers, however, is less straightforward.

"In theory, this is a good law for consumers," the WHO's Sautenkova said. The WHO promotes the use of generic names in prescriptions as a policy key to making medicines more affordable to consumers.

In addition to cutting their health care costs, consumers would be less confused by advertising.

Advertisements often market traditional medicines under a brand name, causing them to sound like innovative treatments, said Marat Mikhailov, sales director at Bryntsalov A, a local generic drugs manufacturer.

"This can mislead ordinary customers," Mikhailov said.

Pharmaceutical distribution companies would also have less influence over medical decisions. Doctors sometimes receive kickbacks from distributors for prescribing a certain brand of medicine, even though a cheaper equivalent is available, Mikhailov said.

The bill's opponents, however, say that the measure would not help to tackle corruption. Pharmaceuticals distributors could focus their efforts on influencing the pharmacists instead of doctors, since pharmacists would now be advising consumers on the differences between comparable drugs.

"It is dangerous to give pharmacists greater authority in recommending one brand of medicine over another because they are less qualified to do so than doctors," said Oleg Feldman, general director of Comcon Pharma, a research firm.

Another potential health hazard stems from small but important differences in the manufacturing processes of comparable generic drugs, Feldman said.

"Not all drugs with the same active ingredient are of the same quality," said Andrei Mladentsev, general director of Nizhpharm, a large Nizhny Novgorod-based manufacturer that is part of Germany's Stada pharmaceuticals group.

Russia is not a member of the Pharmaceutical Inspection Cooperation Scheme, or PICS. Britain, Germany and Australia are among PICS's 28 members, which have agreed to establish streamlined manufacturing practices for pharmaceuticals.

It would be impossible for doctors to explain the differences between comparable generic drugs solely using the INN, Feldman said.

Also, AIPM contends that requiring doctors to forego brand names in favor of the INN to prescribe medicines "would directly contradict WTO rules protecting trademarks."

"Prior to the introduction of such a law, doctors should be trained to prescribe by the generic name, and the quality of medicines should be assured," Sautenkova said.

Whether the change will be good for consumers in practice depends on its implementation, Sautenkova said.