Generic drug names and social welfare

Area of Science:

• Pharmaceutical Science
• Health Economics
• Public Health Policy

Background:

• Medicinal product identification challenges lead to confusion and errors.
• International Nonproprietary Names (INNs) were established by the WHO in the 1950s to standardize drug nomenclature.
• The current use of INNs, while beneficial, has not fully addressed information imperfections in healthcare.

Purpose of the Study:

• To evaluate the effectiveness of International Nonproprietary Names (INNs) in mitigating information asymmetry in the pharmaceutical market.
• To assess the impact of INNs on social welfare, public health, and economic efficiency.
• To propose strategies for optimizing the utilization of INNs in clinical practice and pharmaceutical policy.

Main Methods:

• Literature review and policy analysis of INN implementation and impact.
• Economic assessment of INN benefits, including reduced transaction costs and enhanced market competition.
• Comparative analysis of legal and regulatory frameworks governing INN use in different countries.

Main Results:

• INNs significantly improve patient safety by reducing medication errors and enhance public health.
• INNs foster economic efficiency by increasing market transparency, promoting generic drug competition, and facilitating trade.
• Despite legal mandates for labeling, suboptimal prescriber adoption limits the full realization of INN benefits.

Conclusions:

• The contribution of INNs to social welfare is substantial, improving both health outcomes and economic efficiency.
• Incentivizing or mandating the use of INNs by prescribers and pharmacists is recommended to maximize their benefits.
• A dual-use approach, integrating both brand names and INNs in prescribing, is proposed to balance established practices with improved clarity and safety.