Spain's generics and biosimilars industry is calling for their profitability to be guaranteed after authorities lowered the reference prices of over 1,000 drugs.
The sector, which represents 95% of companies in the Spanish generics industry, is warning of the damage it is suffering due to the low prices of their drugs and is calling for profitability to be protected to continue saving resources for the National Health System (Sistema Nacional de Salud, SNS) and, ultimately, to protect patients.
Data from the Organisation for Economic Co-operation and Development (OECD) shows that the selling price of medicines in Spain is around 16% lower than the European Union average. The price paid for medicines has in fact dropped by around 20% over the past decade.
The Spanish Ministry of Health has lowered the reference prices of more than 1,000 drugs to mitigate pharmaceutical costs, some of them included in the lists of medicines considered ‘essential and strategic’ by the World Health Organisation (WHO) and the Spanish Agency for Medicines and Medical Products (Agencia Española de Medicamentos y Productos Sanitarios, AEMPS). The minimum reference price has been set at €1.60 (previously €1.80), which, according to the generics and biosimilars industry, is close to the limit of profitability.
The average price of generics in Spain is around €3.50, but almost 50% of all generics are priced at €1.60 or less. Similar problems are impacting biosimilar medicines, which come with substantial manufacturing costs, but also have notable differences.
Biosimilars are expensive drugs that limit their use, but they are also a turning point in the treatment of certain pathologies. The financing price of the biosimilar is typically 20%‒30% lower than that of the original. The profitability of biosimilars is important for the pharmaceutical industry.
In the case of generic drug product, one way to keep them profitable could be to be able to raise prices by at least 10%.
The strong impact of inflation, coupled with the rapidly increase of prices for energy, transport and raw materials, has hit the industry hard.
The Spanish pharmaceutical industry suggests changing current regulations to exclude strategic drugs from reference prices to guarantee their supply.
The National Commission for Markets and Competition (Comisión Nacional de los Mercados y la Competencia, CNMC) published on 22 June 2022 a study on the regulation of medicine prices in Spain. The study identified several areas where regulation does not sufficiently exploit competition mechanisms and proposes a review of regulation to achieve cheaper medicines and more effective competition between laboratories and in the distribution channel. The study thus advocated for regulation that stimulates competition between originator, generic and biosimilar medicines by proposing reforms in the pricing of medicines financed in competition and also advocated facilitating the market entry of generics and biosimilars [1].
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Reference
1. GaBI Online - Generics and Biosimilars Initiative. CNMC study on the wholesale medicines market in Spain: biosimilar medicines [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2023 Mar 31]. Available from:
www.gabionline.net/reports/cnmc-study-on-the-wholesale-medicines-market-in-spain-biosimilar-medicines
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