More steps are needed to strengthen the retail chain promoting generic medicines

Girish Agarwal, Co-founder and Director, Zeno Health, talks about the generic medicines market in India and how it has evolved over the years in interaction with Sanjiv Das

How has the generic medicines market evolved over the years? How it is different from the branded medicines?

The Indian government began encouraging more drug manufacturing by Indian companies in the early 1960s, and with the Patents Act in 1970. The Patents Act removed composition patents for foods and drugs, and though it kept process patents, these were shortened to a period of five to seven years.

The resulting lack of patent protection created a niche in both the Indian and global markets that Indian companies filled by reverse-engineering new processes for manufacturing low-cost drugs. The code of ethics issued by the Medical Council of India in 2002 calls for physicians to prescribe drugs by their generic names only.

Today India is in a prominent position and rapidly growing presence in global pharmaceuticals. It is the largest provider of generic medicines globally, occupying a 20 per cent share in global supply by volume, and supplies over 50 per cent of global demand for various vaccines, 40 per cent of generic demand in the US and 25 per cent of all medicine in the UK.

India is the source of 60,000 generic brands across 60 therapeutic categories and manufactures more than 500 different Active Pharmaceutical Ingredients (APIs). The export of generic drugs is one of India’s core strengths.

Branded drugs have a trading name and are marketed to prescribers by pharma companies. They have the same composition as their generic equivalent but are priced higher as they undergo heavy sales and marketing costs. 

The primary difference between a generic and branded drug is the mode of sales and distribution. While the former goes to market directly through the trade channel and demand is generated and fulfilled by the trade, the latter is marketed to medical practitioners and demand is generated through prescriptions. 

What are the current challenges being faced by the generic medicines sector?

Despite being India’s is the world’s tenth-largest pharmaceutical market and the largest generic drug manufacturer and exporter globally, the awareness in India about generic medicines is meagre. The awareness is more in the form of misconceptions around generics. 

Also, the practice of prescribing medicines by brand names instead of drug names leads to low confidence at consumer’s end in switching to generic. This practice hits at the very root of the aim to make medical care affordable to all sections of society. 

Availability of the entire medicine portfolio in generic is another concern that needs to be addressed.

How can more awareness be created among the customers regarding generic medicines?

Education is the key to create awareness amongst customer at both the doctor level and at the pharmacy level. The Medical Council of India has already given instructions to prescribe generic medicines. Here there is need of laws so that allows the doctors to prescribe medicines molecules and offers a fair opportunity to customers to choose between generic medicines and brand. 

More steps are needed to be taken to strengthen the retail chain promoting generic medicines. Also, the government should take measures to increase awareness of generic drugs to the general public.

The Jan Ausadhi stores that are available today are run by government hospitals and public healthcare centres. Steps should be taken to encourage more and more private companies or individuals to open generic drug stores. The government should not only talk about Jan Aushadhi Stores but campaigns talking about the quality, safety, affordability of generic drugs.

In which locations are your stores present and where do you plan to set up stores in future?

With the strong presence of 85+ stores spread across Mumbai, in the next year, we will strengthen Zeno Health’s presence with another set of 85+ more stores between Pune, Surat and Mumbai. Over the next five years, we would have an omnichannel presence in all four regions of the country with deep footprint penetration. 

What are your plans for the next five years? Tell us about your business model.

We plan to encompass the length and breadth of the country serving over 10 mn consumers through a network of over 1000 stores, ZenoHealth digital platform, loyalty programme and allied health services. 

Our business model is simple. It rides on 2 things – Deep consumer centricity and ruthless efficiency. We work on small store format, focus on medicine portfolio, leverage technology and data science, strong capability development program to enable focus on customer experience while delivering efficiency. We are operationally profitable. 

With which pharma companies are you in tie-up?

We work with all major pharma companies like Cipla, Abbott, Zydus, Glenmark, Alkem, Akums for sourcing our generic as well as branded product portfolio. 

What are your plans to counter other online and retail pharmacy chains? 

We are a consumer-centric, education-driven, generics focussed company. The model is very different from the existing online and offline pharmacies. Our core value is to bring transparency through awareness and access. Our focus on the ZenoHealth platform is also going to remain the same. We believe that the consumers would need value sustainably and we are providing that. We save 40 per cent+ on an average on medical bills, and we do that profitably.