Generics
Incentives to use generic medicines
A variety of financial and non-financial incentives are intended to encourage generic prescribing. Physician budgets are used by Germany and UK and seem to encourage generic prescribing. Assistance in terms of electronic prescribing, medicines databases, audit and feedback on prescribing data, guidelines and formularies tend to be voluntary and have a limited impact. Denmark and the UK teach medical students to prescribe by INN rather than brand name. Portugal requires prescription by INN if a generic product exists. Physicians see this as a restriction on their prescribing freedom in Belgium and France and resist such moves.
An industry view of generic manufacturing
Research and development of innovative medicines are becoming more challenging, with only 29 medicines with new chemical entities launched in 2006. The dwindling pipeline of new innovative medicines reduces the number of new chemical entities that can be developed when patents on innovative medicines expire in the future. Manufacturers of innovative medicines attempt to extend the period of patent protection by either launching a new dosage, a sustained-release version, a new indication, a single isomer version or a combination medicine. These strategies delay the market entry of generic medicines. As generic competition primarily takes place in the market for prescription medicines, some manufacturers of originator medicines have switched their medicines from prescription to over-the-counter status, e.g. simvastatin 10 mg in UK.
Pricing strategies in generic medicines
Eighty two per cent of countries impose pricing regulation while 18% opt for free market competition to control prices. Of the countries that regulate prices, 36% set the price of generic medicines at a predetermined percentage below the originator price. For instance, the minimum price difference between originator and generic medicines was 20% in Italy in 2004. In 21% of countries, the generic medicine price is based on the average price of medicines in a selection of countries. Other mechanisms used to set generic medicine prices are a maximum price (19% of countries) and a negotiable price (12% of countries).
Generics in The Netherlands
The market for generic medicines in The Netherlands ambulatory health care is developing, with more being used, more companies supplying generic medicines and prices tumbling. This is despite the restriction on the reimbursement of hypnotics and tranquilisers on the basic insurance from 1 January 2009. Reimbursement in this category fell by 25%, from Euros 612 million in 2008 to Euros 459 million in 2009.
Celgene and Natco in generic lenalidomide battle
Indian generics’ manufacturer Natco Pharma (Natco) has filed an abbreviated new drug application (ANDA) with the FDA seeking approval to sell a generic version of Celgene Corporation’s (Celgene’s) flagship blood cancer drug Revlimid (lenalidomide), before its patent protection expires.
What is ‘tentative approval’ and how does it affect generics?
Tentative approval by the FDA enables generics access to poor nations under a US initiative, which allows sale of generics to treat conditions where there is a significant public health impact, even though the originator drugs are still under patent protection.
Pharma price-fixing under renewed investigation
Some of the world’s biggest drug companies are having once again to face up to price-fixing allegations thanks to the Supreme Court of California. These allegations were dismissed by a lower court two years ago. The suit claims that the 18 drug manufacturers, including Pfizer, GlaxoSmithKline, AstraZeneca, Merck and Eli Lilly amongst others, not only set artificially high prices, but also conspired to keep cheaper Canadian drugs off the US market and to stave off generic competitors.
Drug recalls and generic medicines
In 2009 there were a record number of drug recalls according to Health Reform Watch. There were an amazing 1,742 drug recalls in 2009 compared to 426 in 2008.
International trends in generics: India
South Africa, home to 5.7 million HIV-positive people – more than any other country in the world – gives AIDS patients free drugs, most of which are generics that come from India. This is just one country, but representative of many that are keen to buy low-priced generic medicines from India. So much so that India now produces a quarter of the world’s generic medicines.
Can we have our cake and eat it?
Managing the cost of pharmaceutical expenditure is entirely the competence of individual EU Member States. As a result, Europe has developed into a patchwork of different systems of pharmaceutical pricing and reimbursement.
