First posted: 15 March 2012
Portugal does not have a coherent generic medicines policy and there is no generic medicines competition within the existing regulatory frameworks .
There are no incentives for physicians to prescribe generic medicines . There are no physician budgets or targets and no prescription monitoring or guidelines exist for physicians . Although prescribing by international non-proprietary name (INN) is compulsory for physicians in Portugal , they are free to add a brand name or a marketing authorisation holder name .
There are no incentives for pharmacists to dispense generic medicines. Generic substitution by pharmacists is allowed, however there are no real incentives for pharmacists to do so .
There are no incentives for patients to demand generic medicines .
Historically, Portugal has a developed market for copies as a result of process patent legislation. Legislation was amended in 1995 to regulate product patents for medicines, although companies were allowed to continue marketing copies if these were initially authorised prior to 1995. In 2003, a programme was launched to convert copies of off-patent medicines into generic medicines .
Between 2001 and 2007, the minimum price difference between generic and originator medicines needed to be 35% of the price of the originator medicine [3, 4].
In 2005, a decree came into effect reducing prices of all marketed medicines by 6%, with 4.17% of the reduction being borne by pharmaceutical companies and the remainder by wholesalers and pharmacists .
In 2007, the generics price changed from a difference of 35% to 20% related to the original price for new generics where the originals have a maximum ex-factory price of Euros 10 in all packages .
The pharmacy retail price of a new generic that enters a homogeneous group must be 3% lower than the lowest price of the generics that has at least 10% generics market share in that homogeneous reference pricing group (Decree-Law no. 65/2007of 14 March 2007) .
After March 2007, generics were subject to price reductions depending on their market share:
- 50% ≤ market share of the active ingredient < 60% → generics price reductions of 5%
- 60% ≤ market share of the active ingredient < 70% → generics price reductions of 4% (9%)
- market share of the active ingredient ≥ 70% → generics price reductions of 3% (12%)
These percentage cuts are only applied once (when the active ingredient reaches the market share for the first time) and are cumulative (Decree-Law no. 300-A/2007 of 19 March 2007) . This policy has the aim of obtaining the largest gains when generics are more important .
Unlike all other European countries Portugal’s generics market share is higher in value than in volume. The Portuguese authorities, in particular INFARMED, are aware of this discrepancy. Annual price cuts are made to generics that gain more than 50% of the active ingredient market share. The third and latest price cut occurred in April 2009 .
A reference pricing system (RPS) by active substance was introduced in 2002, with the first list of homogenous medicines being published in March 2003 . The RPS is only applied to medicines with generic alternatives included in the reimbursement system .
Medicines are clustered in what is known as homogeneous groups (with the same active substance, pharmaceutical form, strength and route of administration), that include at least one generic on the market .
The reference pricing (RP) which is reimbursed by the national health service (Service National de Sáude, SNS) is the price of the most expensive generic medicine [3, 7].
The Medicines Agency INFARMED is in charge of setting and adapting the reference groups and reference prices. Reference groups and reference prices are updated on a quarterly basis .
International price comparison
Medicine prices in Portugal are set according to the average prices for identical or comparable products in four reference countries: France, Greece, Italy and Spain .
Incentives for physicians
In Portugal there are no prescribing budgets for physicians .
On 2 December 2002, a law (Decree-Law no. 271/2002) stipulated that physicians need to prescribe medicines for which generics equivalents exist by their INN, even though they are free to add a brand name or a marketing authorisation holder name. Moreover, physicians and pharmacists were forced to inform patients about the range of available generic medicines and their costs at the time of prescribing and dispensing a medicine [3, 5].
Although guidelines regarding appropriate prescribing behaviour were issued to physicians, compliance with such guidelines is not rewarded or sanctioned. To inform generic prescribing by physicians, a medicines database and computerised prescribing have been pilot tested since 2004, but have not yet been fully implemented. Physicians can also consult a ‘generic medicines guide’ booklet, published every quarter by INFARMED, the National Institute of Pharmaceuticals and Medicines (Autoridade Nacional do Medicamento e Produtos de Saúde), or on the website of INFARMED.
Physicians have the responsibility to inform the patient about the existence of generics and their prices, but they may not allow the patient to choose a specific medicine, like a generic drug. They may also reject generics substitution by indicating it on the prescription .
At the start of the decade, INFARMED organised information sessions for physicians at a regional level, where physicians who were sceptical about generics as an alternative were informed about quality generics and their role in the control of medicines expenditure .
Incentives for pharmacists
Generics substitution by pharmacists has been allowed since 2003 (Decree-Law no. 271/2002 of 2 December 2002). The physician can indicate on the prescription form whether (s)he permits or forbids substitution. If the physician prescribes by INN, the pharmacist is obliged to dispense the cheapest generic medicine available. If the physician issues a prescription by INN followed by a brand name, the pharmacist may substitute with a generic medicine if the physician allows substitution. If the physician ticks neither box permitting/forbidding substitution, substitution with a generic medicine by the pharmacist is allowed [3, 5].
Physicians and pharmacists have the responsibility to inform the patient about the existence of generics and their prices, but which medicine the patient gets depends on whether the physician authorises or excludes generics substitution .
Pharmacists have no financial incentive to dispense generic medicines as pharmacist margins amount to a flat rate of 19.15% since September 2005 . Moreover, since pharmacists earn a fixed percentage mark-up, they benefit from dispensing expensive medicines . Discounts of 3–5% are offered by generic medicines companies to pharmacists .
Incentives for patients
There is no prescription fee in Portugal. Patients have to pay a product-specific percentage co-payment .
Medicines can fall under five different reimbursement regimes with rates of 100% for medicines classified as life-saving products, 95% in category A, 70% in category B, 40% in category C, and 20% in category D. Patients with low incomes receive an additional reimbursement of 15%. Between 2000 and October 2005, patient demand for generic medicines was stimulated by an increase in the reimbursement rate of generic medicines by 10% .
Taking together the impact of the withdrawal of the 10% additional reimbursement for generic medicines and the price reduction of 6% of all marketed medicines, generic medicines cost 4% more to patients since October 2005 .
In the past few years, Portugal has twice decreased reimbursement rates and thus increased patient co-payments (in 2005 and 2007) .
Co-payments for patients are not only the difference between the reference price and the actual retail price, but also a percentage of the co-payment limit that is calculated on the basis of the reference price . This means that patients in Portugal pay high co-payments compared to the rest of Europe. In 2008, co-payments were on average 34.4% of the retail value . The WHO considers co-payments above 25% as a barrier to access to medicines .
Since June 2009, 100% reimbursement on all generics has been applied for pensioners under the ‘special regime’ (low income) .
If the patient opts to buy the branded medicine instead of the generics he/she has to pay the difference between the reference price (reimbursement price) and the actual pharmacy retail price [5, 7].
Information campaigns have been run by INFARMED in 2004, 2007 and 2009 to try and increase public awareness and trust in generic medicines  although no formal evaluation of the impact of campaigns exists .
Key factors aiding the development of the generic medicines market
- Portugal developed a successful generic medicines policy by increasing reimbursement of generic medicines (until October 2005) .
- Physicians are obliged to prescribe by INN, albeit without sanctions in cases of non-compliant physicians .
- Generic substitution by pharmacists is allowed .
- The reference pricing system favours the use of less expensive generic alternatives .
- Pensioners receive 100% reimbursement on all generics .
- Information campaigns have been run for patients .
Key factors hindering the development of the generic medicines market
- Prices for generics remain high .
- Medical students are not taught to prescribe by INN at medical school.
- Regulation requiring that generic medicines are at least 35% cheaper than originator medicines and setting the RP at the level of the most expensive generic medicine stimulates companies to launch generic medicines for expensive active substances and limits price competition between generic medicines companies .
- Physicians face few incentives that influence their decision to permit or forbid generics substitution .
- Pharmacists are financially penalised for dispensing generics .
- There are no incentives for patients (except pensioners) to opt for cheaper generic medicines .
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