United KingdomPosted 24/08/2011

The GBP 2.4 billion UK generics market is one of the world’s largest in terms of both size and generic penetration [2, 3]. In 2008 over 82% of prescriptions in England were prescribed and 65% dispensed as generics, accounting for 26% of the market value [4].

In comparison with other Western European countries, the UK is one of the countries spending relatively little on medicines. In 2008 only 7.7% of the total healthcare budget was spent on medicines [5].

In 2008, GBP 11.6 billion was spent on medicines by the UK, representing GBP 386 million or 3.4% more than in 2007 [6]. Expenditure on prescription medicines over the last 10 years had been rising at a steady rate, despite a 7% price cut imposed across branded products in 2005, which led to a slight reduction (1.8%) in overall expenditure in 2005 relative to 2004 [7]. Expenditure on medicines has increased by 60% in real terms over the last decade in the UK [8].

The UK generics market is large by international standards, and the market is relatively easy to enter, making the generic culture in the UK probably stronger than in any other EU country. Four years after launch, generics attain an average penetration of 55%; compared to 45% in Germany and 35% in The Netherlands [9].

When an original branded drug loses its patent protection, generic equivalents are launched; typically by several manufacturers. The strong competition between these manufacturers drives down prices, often leading to a reduction of 90% or more within a few weeks [3].

In addition, the government has proved willing to step in to correct reimbursement prices, where these significantly exceed the market. The April 2005 Drug Tariff had the effect of reducing generic prices, and action has also been taken with regard to the price of specific drugs [2].

Generics are well accepted by consumers and widely used by doctors [2].

The UK has a high number of generic producers present in the market, making the generic segment of the pharmaceuticals market in the UK appear rather fragmented [10].

Key facts – contribution of generic medicines to the UK

• Generic competition saves the National Health Service (NHS) GBP 8.6 billion per annum [3].
• In 2008, the generics industry supplied 65% of NHS dispensed medicines at only 29% of the NHS drugs bill [4].
• In 2010, the average cost to the NHS of a branded medicine was GBP 20.00; the average cost of a generic was less than GBP 3.83 [3].
• In 2010, an average of Euros 223 per head of population per year was spent on medicines in the UK compared to an average of Euros 328 in the EU27 [11,12].
• On one product, based on current usage the generics industry has saved the taxpayer GBP 1.1 billion [13].
• A 1% increase in generics market share could save the NHS GBP 155 million [3].
• Competition from generics stimulates the research based pharmaceutical industry to develop new medicines [13].
• In the UK, a free market approach with competition between manufacturers and incentives for GPs to prescribe and pharmacists to dispense generics leads to the lowest prices in the developed world and large savings for the NHS [3].
• Further growth and NHS savings are constrained by regulatory delays and costs and the actions of some originator companies in trying to avoid or delay generic competition [13].

* A mature generic market is one where generics have been on the market for more than 10 years and where the market share of generics exceeds 40% [14].

References

1. Kyne J. Assistant Press Officer, MHRA. Personal communication. 5 October 2010.

2. Espicom. Opportunities and Challenges for Generic Drugs in the UK. [page on the Internet]. Tangmere, UK, Espicom [cited 2011 May 13]. Available from: www.espicom.com/Prodcat.nsf/Search/00000965?OpenDocument

3. British Generic Manufacturers Association (BGMA). BGMA Briefing Paper. June 2010 [monograph on the Internet]. London, UK, BGMA c2010 [cited 2011 May 13]. Available from: www.britishgenerics.co.uk/support/pdfs/bgma-briefing-paper.pdf

4. NHS National Statistics. The Information Centre (Health Care).Prescriptions Dispensed in the Community Statistics for 1998 to 2008: England. 29 July 2009.

5. Nefarma, Feiten en cijfers [Dutch] [page on the Internet]. The Hague, The Netherlands, Nefarma [cited 2011 May 13]. Available from: www.nefarma.nl/feiten-en-cijfers

6. The NHS Information Centre, Prescribing Support and Primary Care Services. Hospital Prescribing, 2008: England. 29 October 2009.

7. Office of Fair Trading (OFT). The Pharmaceutical Price Regulation Scheme: An OFT market study. February 2007.

8. National Audit Office. Prescribing costs in primary care. Report by the Comptroller and Auditor General. HC 454 Session 2006-2007. 18 May 2007.

9. Pisani J, Bonduelle Y. Opportunities and barriers in the biosimilar market: Evolution or revolution for generics companies? 2006.

10. Glowicka E, Lorincz S, Pesaresi E, Sauri Romero L, Verouden V. Generic entry in prescription medicines in the EU: Main characteristics, determinants and effects. July 8, 2009. Available from: www.ec.europa.eu/dgs/competition/economist/prescription_medicines.pdf

11. ABPI. Did you know? Facts and figures about the pharmaceutical industry in the UK. [page on the Internet]., UK, ABPI [cited 2011 May 13]. Available from: www.abpi.org.uk/our-work/library/industry/Documents/Did%20you%20know_Jan11.pdf

12. Zimmerman N. Healthcare Forum 2009. Overview on current pricing and reimbursement schemes in the pharmaceutical sector in the EU. Bucharest, Romania. 30 September 2009.

13. British Generic Manufacturers Association (BGMA). Key facts – contribution of generic medicines to the UK [page on the Internet]. London, UK, BGMA c2010 [cited 2011 May 13]. Available from: www.britishgenerics.co.uk/about-generics/key-facts

14. Simoens S, De Coster S. Sustaining Generic Medicines Markets in Europe. April 2006. [monograph on the Internet]. Brussels, Belgium, European Generic Medicines Association (EGA) [cited 2011 May 13]. Available from: www.egagenerics.com/doc/simoens-report_2006-04.pdf