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Anti-competitive practice of pseudo-generics continue to drive up SA medicine prices

South African consumers continue to pay more for medication long past the expiry of a patent, as a result of the increasing occurrence of pseudo-generics in the South African pharma marketplace.

This is according to Erik Roos, CEO of Pharma Dynamics – a leading generic pharmaceutical company – who says pseudo-generics are often identical in all aspects to a branded product, but carries a different name and is sold at a slightly lower cost, thereby fooling consumers into thinking it is a true generic.

“The difference in cost between a pseudo-generic and true generic product can be up to 40%, 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.”

According to research, an originator’s profit drops by about 30% to 40% once a true generic version of a product is introduced, while market share diminishes by up to 80%, which is why most originator companies release pseudo-generics or clones to ensure a continued price advantage.

Pseudo-generics are common across medication categories and their presence has increased substantially in recent years.

Roos notes that the National Department of Health (NDoH) does have a rule against one company selling the same medicine at a different price, but that some pharma firms have found a loophole in the system. “In many cases the brand name company will register a subsidiary with a different trade name to bypass this rule.”

He adds that it is a practice adopted by most originator companies abroad and in South Africa, but in the past few years, various international reports confirm the uncompetitive nature of such practices which have been proven to lead to higher long-term medicine prices.

“It is important to keep in mind that generic companies also incur costs for laboratory testing as well as approval from the South African Health Products Regulatory Authority (SAHPRA) long before the patent expires on a product. This comes at a huge cost to the industry and further impacts on the extent to which medication can be discounted.

“The debate over affordable medication is hugely emotive in our country where 12 million people live under the breadline and where the poor often have to forego potential life-saving treatment because of the high price tag on medication.

“South Africans can no longer afford to pay unnecessary high prices for medicines because of uncompetitive practices which keep more affordable generics off the market and benefit only the big pharmaceutical companies.”

How can consumers distinguish between a pseudo-generic and a true generic?

“The best way is to ask your doctor or pharmacist before making the purchase”, advises Roos. “To the average consumer, these products all look the same, but doctors and pharmacists understand a drug’s makeup and life-cycle, and will be able to point you to the true generic equivalent for maximum savings.”

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Train and develop your team for competitive edge

In the fluid business landscape, training and development is essential. Business leaders need to recognise the value in employee training and development – it might be seen as time-consuming or costly at first, but it ultimately builds a more engaged, competitive and productive workforce.

Training allows employees to acquire new skills, sharpen existing ones, increase productivity and grow into leaders. Companies are built on the success and abilities of their employees – both individually and collectively. Which is why forward-thinking businesses should do everything in their power to ensure they perform at their peak. Here’s why training and developing employees is a must:

Performance improvement

It goes without saying an employee who receives the necessary training is better equipped to perform their necessary functions. They become aware of basic organisational practices, procedures and role responsibilities. This builds confidence because they gain a clearer understanding of their environment and exactly what’s expected of them. It also allows them to put structured goals in place – and gives them the tools to actively pursue them. 

Address weaknesses

A training program gives employees the insight they need to strengthen skills that need improvement. This can go a long way in quickly shining a light on weak links in an organisation who rely on others to complete tasks. Everyone should have the knowledge to take over for another team member when needed – and work independently without supervision.

Employee satisfaction

Employees who are given training and development by their employer have a significant advantage over employees who are left to seek training in their own time, with their own money. 

Investment in training shows employees they’re valued – it creates a supportive workplace. Employees who feel appreciated and challenged through training opportunities also generally have more job satisfaction – and are likely to stay with a company for a longer period of time. This minimises staff turnover and boosts morale.

How to get it right

The biggest challenge in training and developing a team is understanding. As a manager, you need to understand and appreciate every individual’s skill sets and do your best to tailor training processes for the individual (as far as possible). 

It’s also about clear communication and training on how best to work as a unit – what’s the purpose of the team and the common objective? Teams disagree but need to be able to work together to achieve goals. It gives the team a strategic top-level view of what’s happening – so they’re not just relegated to the trenches.

Training expands the knowledge of all employees and nurtures confident, happy people. It provides both the company as a whole – and employees – with benefits that make the cost and time a worthwhile investment.

For an opportunity to speak to someone at Nashua about business solutions, email This email address is being protected from spambots. You need JavaScript enabled to view it.. For more information, visit www.nashua.co.za

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'Exporter of the Year' winners

  • Published in News

Abagold Ltd the Hermanus company which breeds, grows and exports abalone by the ton were declared the big winners at the ECIC/Cape Chamber-Western Cape Exporter of the Year Competition at a gala dinner at the Southern Sun Cape Sun last night.

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Kanonkop and Rijk’s make history with 11th Absa Top 10 Award Win

Legendary Stellenbosch wine estate Kanonkop and Rijk’s Cellars from Tulbagh have furthered their dominance of the Absa Top 10 Pinotage Awards by each raking in an unprecedented 11th Absa Top 10 Trophy. At this year’s awards function, held on 26 August at the Cavalli Estate outside Stellenbosch, the Kanonkop Pinotage 2010 and Rijk’s Reserve Pinotage 2013 won two of the Absa Top 10 trophies handed to the winning wines in the 2016 competition. The 10 winners topped a total of 144 wines entered for the event, which was the 20th time South Africa’s leading cultivar-focussed wine competition was held.

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