First posted: 14 May 2012
Branded medicines dominate the Italian market and the generics market is poorly developed* [1]. Generic medicines have been in use in Italy for less than 10 years.
Italy employs a range of pricing and reimbursement tools to control costs. As a result, drug prices in Italy are among the lowest in Europe [2].
Italy is one of Europe’s largest pharmaceutical markets [3], however, the Italian generics market is small compared to other European countries, such as the UK and Germany. In 2010 only 11.7% of prescriptions in Italy were prescribed as generics, accounting for 5.8% of the market value [4].
In comparison with other Western European countries, Italy spends somewhat more on medicines. In 2008 a total of 13.6% of the total healthcare budget was spent on medicines compared to only 9.8% in The Netherlands and 7.7% in the UK [5].
In 2009, Euros 11 billion was spent on medicines by Italy, representing 0.9% less than in 2008 [6].
On average, for every Italian citizen, the expense for drugs during 2008 was approximately Euros 410 with a period of treatment of 537 days [7], showing that there is room for savings at the patient level with generics substitution.
Italian law states that generic medicines must have a lower price, at the time of marketing, of at least 20% of the price of reference medication [8].
The existence of a market of copies (drugs of the same active substance marketed, with their own brand name, often by the originator itself) has posed a barrier to the development of the Italian generic medicines market [9]. Italy has also lacked strong pro-generics policies in the past and negative attitudes to generics among physicians have kept the generics share of the market low [1].
In addition, the unusual implementation of Italian patent law in the early 1990s has meant that many drugs off-patent in the rest of Europe are still protected in Italy. Generics manufacturers have had to contend with national patent supplementary certificates which can be applicable for up to 18 years [3].
Italy has pricing regulation of generic medicines, which means that penetration of generic medicines is less successful than in countries that permit (relatively) free pricing of medicines, e.g. Germany, The Netherlands and UK [10].
In Italy, the limited volume of generic medicines consumption, in combination with low medicine prices, has undermined the economic viability of the generic medicines market [10].
However, branded generics have helped to boost the generics share of the Italian market in recent years. Furthermore, the Italian Medicines Agency (Agenzia Italiana del Farmaco, AIFA) embarked on an information campaign with the aim to increase the generics share of the market to 20% by 2008 [1]. Since then it appears that consumer perception of generics and generics awareness is improving [11]. In 2010 the generics share of the market stood at 11.7% by volume (prescriptions) [4].
Excessive price regulation, long national patent supplementary protection, a lack of incentive distribution margins, confusion between branded and unbranded generics, a perception of generics as second-class drugs and the empowerment of physicians to stop generics substitution are all factors that have traditionally constrained the unbranded generics sector [11].
The combination of high profile drugs losing patent protection and the need to reduce costs should help to increase the generics market share. In addition to the blockbusters that have lost patent protection in Italy in the last couple of years, a large number of medicines will lose their national supplementary certificates during 2010 [11].
Italy has a high number of generics producers present in the market, making the generics segment of the pharmaceuticals market in Italy appear rather fragmented [12]. Although in recent years the Italian generics market appears to be becoming consolidated by leading generics producers in the country [3].
Italy is a leading producer of active pharmaceutical ingredients (APIs) in Western Europe, holding 10.4% of the 2008 global market for innovative and generic drugs [13].
Key facts–contribution of generic medicines to Italy
- The generics industry supplies 11.7% of dispensed medicines at only 5.8% of the drugs bill [4].
- In 2009, an average of Euros 420 per head of population per year was spent on medicines in Italy compared to an average of Euros 382 in Western Europe [14-15].
- Increased substitution of generics for the top 10 originator medicines could reduce public expenditure on the originator medicines by 31% in Italy [10].
- Italy employs a range of pricing and reimbursement tools to control costs. As a result, drug prices in Italy are among the lowest in Europe [2].
- Italy is a major producer of APIs for generics manufacturers, most of which are exported. Revenues from generic APIs accounted for Euros 1.94 billion in 2008 [13].
*In countries with developing generic medicines markets, market share of generic medicines does not surpass 40% [16].
References
1. Pisani J, Bonduelle Y. Opportunities and barriers in the biosimilar market: Evolution or revolution for generics companies? 2006.
2. Aarkstore. Italy Pharmaceutical Market Overview Generic penetration set to rise. 1 December 2010.
3. Espicom. Italy Generics Market Intelligence Report. March 2006.
4. Assogenerici. Il Farmaco Generico: Numeri e Dimensioni Agoiornamento Giugno 2010 [The Generic Drug: Numbers and Dimensions June 2010] [page on the Internet]. Italy, Assogenerica [cited 2012 May 11]. Italian. Available from: www.assogenerici.org/articolihome/cs/AGGIORNAMENTO_DATI_ANNO_1°_SEMESTRE_2010.pdf
5. Nefarma, Feiten en cijfers [Facts and figures] [page on the Internet]. The Hague, The Netherlands, Nefarma [cited 2012 May 11]. Dutch. Available from: www.nefarma.nl/feiten-en-cijfers
6. Assogenerici. I farmaci generici in Italia [Generic drugs in Italy] [page on the Internet]. Italy, Assogenerica [cited 2012 May 11]. Italian. Available from: www.assogenerici.org/newsite/default.asp?modulo=mercato&page=1
7. OsMed. L’uso dei Farmaci in Italia. Rapporto nazionale OsMed anno 2009 Italian Ministry of Health. 2010. Italian.
8. Assogenerici. Il Farmaco Generico - Equivalente: Cos’è [The Generic drug - Equivalent: What] [page on the Internet]. Italy, Assogenerica [cited 2012 May 11]. Italian. Available from: www.assogenerici.org/newsite/default.asp?modulo=ilfarmaco
9. 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 2012 May 11]. Available from: www.egagenerics.com/doc/simoens-report_2006-04.pdf
10. Simoens S. Generic medicine pricing in Europe: current issues and future perspective. J Med Econ. 2008;11(1):171-5.
11. Espicom. Italy - Will the Italian generics market catch up with its European neighbours? 17 May 2010.
12. Glowicka E, Lorincz S, Pesaresi E, Sauri Romero L, Verouden V. Generic entry in prescription medicines in the EU: Main characteristics, determinants and effects. 8 July 2009. Available from: www.ec.europa.eu/dgs/competition/economist/prescription_medicines.pdf
13. ICIS. Italy’s API manufacturers are in it for the long haul, having weathered ups and downs for decades. 12 November 2009.
14. OsMed. L’uso dei Farmaci in Italia. Rapporto nazionale OsMed anno 2008. Italian Ministry of Health. 2009. Italian.
15. ABPI. Did you know? Facts and figures about the pharmaceutical industry in the UK. [page on the Internet]., UK, ABPI [cited 2011 May 11]. Available from: www.abpi.org.uk/our-work/library/industry/Documents/Did%20you%20know_Jan11.pdf
16. Simoens S. International comparison of generic medicine prices. Curr Med Res Opin. 2007;23(11):2647-54.
