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GENERICS VS BRANDED PRODUCT: WHICH IS THE BEST?
I would hazard a guess that many of you at some stage may have made a
visit to the medicine cupboard for an Aspirin®. With the careers that we
have chosen many of you have at some stage had to “Roundup®” your
weeds.
However, how many of you actually do use Aspirin® for that troublesome
headache or actually used Roundup® for weed control?
A brief look in my medicine cabinet shows no aspirin but instead a
product called “disprin®” which the packet informs me is a generic form
of aspirin. When I talk to the majority of turf managers about Roundup®
they say that they use a generic as “it’s the same stuff only cheaper”. Is
this true and what factors influence this purchasing behaviour?
The simplest way to define a generic pesticide is as one which is
manufactured by a company other than the original manufacturer,
whilst a generic manufacturer is, “a company, or division of a company,
whose major activity consists of manufacturing the active substances of
pesticides, the patents for which have expired, and for which it did not
hold the original patents” (Hicks, 1994).
In 1996, patent-protected active substances accounted for 47% of the
total global agrochemical market (Anon, 1998), with up to 60% of the
herbicide market comprising generics (Ryan, 2002).
In terms of size, the biggest generic producer is the Israeli company
Makhteshim-Agan, who partly own Farmoz in Australia, whose sales
bring it into the top 20 agrochemical companies world-wide, and its sales
are rising faster than any of the leading R&D led companies. Other major
companies are the US Griffin, which recently formed a 50-50 joint
venture with Du Pont, and the Danish company Cheminova Agro, who
own a share of Ospray in Australia and recently acquired a large Indian
company. Chinese and Indian companies remain a major and growing
force in the generic market.
In recent years, there has been a proliferation of generic pesticides in the
Australian turf market, look-alike products with different commercial
names but the same active ingredient, which is the component
responsible for its ability to control the target pest. Generic herbicides
are the fastest growing sector in crop production chemicals, but will they
work well for you and save you money?
Registered agricultural and turf products are priced to include the cost of
the testing and registration process, and it’s this that provides assurance
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of quality and efficacy (Neylan, J 2007). Registered turf chemicals have
passed a rigorous testing programme that ensures the products are
suitable for use and when their products are used according to the label
instructions manufacturers of registered chemical products provide a
warranty.
In the USA in order to receive Environmental Protection Agency (EPA)
registration, a post-patent product must have the same technical merit
as the current manufacturer branded product (Fabrotta, 2007). The
active ingredient must be the same technical material, which might
be produced by the branded manufacturer or another manufacturer.
The same is true of solvents and inert ingredients. All generic products
must pass rigorous EPA review and approval. If the formula changes
from the originally branded product, those changes must get approval
before it is registered. If anything in the formulation differs, the changes
must have gained the approval of the EPA for the off-patent product to be
registered.
Chlorothalonil and iprodione are among the chemistries that have been
off patent long enough in different generic formulations to establish a
good track record, and many superintendents are happy with their
respective performances. This is mirrored in Australia with both of these
now available under a number of brand names such as Iprodione 500g/L
as Subscribe (Ospray) and Rovral Green (Bayer) or chlorothalonil 720g/L
as Chlorothalonil 720 (Ospray) or Daconil Turf (Syngenta).
The main reason for the proliferation of look-alike products is the
expiration of patents. In the USA agricultural chemical formulations are
patented for 17 years whilst in Australia this period is now 8 year’s data
protection. During those years, only the company that has developed the
product is allowed to produce and commercialise it. After that period,
any company can synthesise the herbicide and commercialise it under a
different name.
However, the decision to market an off-patent chemical is not that simple
for three reasons. Firstly, the original manufacturer can lower the market
pricing of the branded product as has occurred in Australia with
imidicloprid thus making it difficult to compete.
The second reason as to whether or not to go to market is that the
original manufacturer might have been successful in developing an
improved formulation that is now under patent protection and
makes the original chemistry inferior. This is the case with propiconazole
(Banner Turf (250g/L) now marketed as Banner Max (144g/L)
(Syngenta).
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The third obstacle to marketing an off-patent product is cost. While
generic products offer price advantages, market experience shows that
they are only able to capture between 10-30% of the market.
However assuming a generic manufacturer decides to enter the
marketplace the key and major driver influencing any purchase is their
cheaper price. As generic manufacturers do not pay the cost of
developing the herbicide, they are able to sell the generic products
cheaper than the brand name alternative.
Regardless, of what company makes the herbicide, the core issue is
whether generic herbicides are as good as brand-name ones.
Generic and the original branded products have the same active
ingredients. Thus, generic and brand name herbicides should have the
same performance. However, generic and brand name pesticides are not
required to have the same inactive ingredients.
In the case for example, of soil applied herbicides, the inactive
ingredients would only influence handling and mixing properties of the
formulation. Thus actual performance in the soil should not be affected.
How well the product sticks to the leaf surfaces as well as other factors
are where the composition of the inactive ingredients (solvents,
stabilisers, emulsifiers, surfactants and other additives) of post emergent
products can have a broader influence.
These additives can make a difference in the performance of the product
you are buying and are usually listed on the label as inert ingredients
with no additional information revealed to the buyer. Nevertheless,
products are extensively tested before release, and differences
should be minimal unless one of the inactive ingredients is missing
altogether.
Another difference between generic and brand name herbicides could be
the physical form of the active ingredient.
Glyphosate, the active ingredient of Roundup® has a host of generic
versions on the market and these may differ in chemical form, i.e.
potassium, di-ammonium, or mono-ammonium salts. Nevertheless,
several studies showed that only minor differences were observed
between the glyphosate formulations and these differences were most
likely due to variations in the weed populations from plot to plot.
In conclusion, generic products tend to perform as good as their brand-
names counterparts, provided that they have the same inactive
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ingredients and isomer structure. When evaluating whether generic
products fit your business, you should compare their cost, safety and
relative performance.
Gannon and Yelverton (2007) looked at the question of generic plant
growth regulators and herbicides to see how they compared.
Cost, efficacy and potential formulation issues were all examined from
the Turf Managers perspective. A number of “branded” and generic
products were tested but of specific relevance due to familiarity to the
Australian turf manager were oxadiazon, quinclorac and trinexapac
ethyl. The end conclusion was that for all the products tested that there
was no significant difference in these products from the perspective of
both efficacy and usage.
In the USA about two-thirds of superintendents apply generic pesticides
to their golf courses, and about one-third spend half of their total
chemical budget on post-patent products, according to a 2006 Golfdom
survey of 495 superintendents. Of those who use generic pesticides, 93%
say the primary reason is cost.
In 2006 we askedsuperintendents, what percentage do you plan to increase your
generic fungicide use? Here’s how they responded:
29.4% of superintendents said that they plan to increase usage by 10%
16.7% of superintendents said that they plan to increase usage by 20%
11.2% of superintendents said that they plan to increase usage by 30%
10.3% of superintendents said that they plan to increase usage by 40%
12.1% of superintendents said that they plan to increase usage by 50%
12.1% of superintendents said that they plan to increase usage by 50%
4.8% of superintendents saidthat they plan to increase usage by 60%
4.8% of superintendents saidthat they plan to increase usage by 70%
4.2% of superintendents saidthat they plan to increase usage by 80%
3.6% of superintendents saidthat they plan to increase usage by 90%
2.7% of superintendents saidthat they plan to increase usage by 100%
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The introduction of generic fungicides into the US turf market has
followed on from generic herbicides that have been available for some
time. According to the Golfdom survey of those who use post-patent
fungicides, almost one-third spend at least 50% of their fungicide
budgets on generic products. And trend data suggest they will use more
each year if they believe generic products can perform as well as their
name-brand counterparts.
Comparing generic chemical usage from 2004 to 2005
6.4% of superintendents saidthat they increasedusage by 100%
5.2% of superintendents saidthat they increasedusage by 75%
17.3% of superintendents said that they increasedusage by 50%
32.7% of superintendents said that they increasedusage by 25%
33.9% of superintendents reported no change in usage
3.0% of superintendents saidthat they decreased usage by 25%
0.6% of superintendents saidthat they decreased usage by 50%
0.6% of superintendents saidthat they decreasedusage by 75%
0.3% of superintendents saidthat they decreased usage by 100%
Nearly 50% said they believe generics are as good or better than the
original brand.
0 20 40 60
Question does not apply to me
I tend to stick to proven
branded products and I am still
suspicious of generics
I tried them because my
colleagues in the area had
success with them.
They may not be quite as good
but I am saving money
I like to experiment with new
things so I'm testing different
generics
I trust my local distributor's
recommendations about these
products
I'm using them because of
budget cuts
I believe the generics I buy are
as good or better than the
original brand
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From the above you would think that I am endorsing wholeheartedly the
use of generics. That is far from the truth. Price, product support, and
the actual distributor who sells the product are all factors that enter the
“mix” when making a decision.
PRODUCT
Distributor
Buying Group
ADVICE
Distributor agronomist
Independent agronomist
Independent organisation
PRODUCT
SELECTION
TECHNICAL SOLUTIONS
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Whether generic or branded product manufacturers, they all readily
agree, that when purchasing product you should buy from reputable
dealers who are financially sound and agronomically strong, and it is this
that will help maintain industry standards. While the products,
formulations and results might be similar between branded and generic
products, the service might not be.
For the vast majority of Turf Managers this means that if you're used to
being able to make a call into a company for guidance or diagnostic
assistance, that there are only a limited number of companies in the
marketplace who can actually provide the answers that you are looking
for in a timely manner. Sure there are plenty of companies who can
supply product but how many can actually advise how to actually use
them properly?
Similar to consumer brand purchase decisions, trust, value and
confidence are important factors when a turf manager makes a purchase
decision. While product cost is a consideration, it is not the only factor in
the overall service cost.
If the comparison were as simple as lower price with no product support
vs. a higher price with product support, comparisons and buying
decisions would be simple.
Making any purchase decision solely on the basis of the supplier being
able to provide technical support is not really practical due to market
considerations as Turf Managers make any purchase decision when
selecting a pesticide on the basis of four factors – effectiveness, long-term
economy, the “social relationship” they have with the supplier and
technical support.
However, the reality is that turf professionals now have a range of
options that include buying branded products from the manufacturers or
buying off-patent products from manufacturers of branded products.
The larger branded manufacturers do however give more than just
product guarantees as they also offer continuing education opportunities
via product training seminars and sponsorships of professional
association meetings. They're also the only ones conducting research and
development, which helps build the foundation for future turfgrass
maintenance programs.
The counter argument to this, is that does this justify charging higher
end pricing for technology that is now regarded as being “old hat”? Sure
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charging top pricing for new technology as it comes online is all well and
good and perfectly justifiable but how can it be justifiable for older
molecules?
Significant opportunities exist for those generic manufacturers who can
move from a complete reliance on price sensitive, commonly available
active substances to the production of newly off-patent materials offered
with additional services and guarantees of quality.
References
Anon. (1998). AGROW (30/1/1998).
Fabrotta, D, Post-Patent Exploits; Superintendents turn to generics to save money,
September 01 2007
http://www.golfdom.com/golfdom/article/articleDetail.jsp?id=458017&sk=&date=&pag
eID=3
Gannon, T.W and Yelverton, F. H., Generic plant growth regulators and herbicides in
turf, how do they compare?,
www.turffiles.ncsu.edu/extension/presentations/2007/SWSS_GenericPGRs2.pdf
Hicks, B. R.,(1994) Generic pesticides – The companies. PJB Publications Ltd .
Neylan, J, Australian Turfgrass Management,
Ryan, P, The impact of generic herbicides on crop protection, Royal Society of Chemistry
February 2002,