Europe is not currently benefiting fully from the potential savings to be achieved from generic drug competition, yet it can be argued that sustainable healthcare systems can only be achieved through increased use of generics, says a new report.
There is intense competition betw
een generics manufacturers within Europe, but the sector continues to be confronted with barriers to market entry, says the study, which was published last week at the annual conference of the European Generic Medicines Association (EGA) in Barcelona, Spain.
Eliminating these barriers will c
reate more effective competition and this, in turn, will generate significant economic savings which European Union (EU) member states can reallocate to fund real pharmaceutical innovation, EGA director general Greg Perry told the conference. This industry is essentially driven by volume, and attain
ing substantial market share is crucial to the sustainability of the sector and EU healthcare systems, but limiting the industry’s potential to enter specific markets by introducing local price distortions can prove very prohibitive to the introduction of affordable generics for entire populations
and the development of viable markets, he added.
The report notes that the EU pharmaceutical sector is heavily impacted by the different regulatory systems operating throughout the region. Northern European markets, where generics have the highest penetration rates, are also characterised by
consistent long-term generics policies and fewer obstacles to entry, such as pricing barriers or time delays for granting post-market approval of pricing and reimbursement status.
But most EU countries do not have such long-term policies combining demand and supply-side measures, and this ha
s cost repercussions for healthcare systems and patients, the report warns.
It calls on all EU governments to implement such policies as a matter of urgency, and says these should include a ban on patent linkage systems that cause delays, block market entry or obstruct the development of comp
etitive and sustainable market environments. Following market entry by generics, such systems also skew the rules of fair competition toward the originator sector, creating a competitive disadvantage for companies attempting to enter the market, it adds.
“The generic medicines sector is cle
arly under threat when it is dependent upon its competitors to set its prices. It is difficult to imagine another sector where such conditions could prevail,” the report comments.
It also recommends that governments should create a mechanism for granting automatic pricing and reimbursement stat
us upon marketing authorisation, thus eliminating current time delays. These are unreasonable and cannot be justified, given that a generic has demonstrated its therapeutic equivalence to a well-known product through the market authorisation process, it says.
Also needed is the application and enforcement of clear criteria which unambiguously define “innovation” as synonymous with added relative therapeutic efficacy/safety, and thus eliminate rewards for evergreening practices. “Be aware of the fact that patents are not synonymous with innovation,” the report tells governments.
Finally, it says, mechanisms must be introduced to influence the prescribing and dispensing behaviour of physicians and pharmacists in favour of generics. These should include steps to: – raise physicians’ awareness of the benefits of generics; – reduce the discretion of doctors to disallow generic dispensing; – establish incentive-based systems, allocating prescription budgets to physicians and granting them the discretion to use savings to prescribe more expensive treatments where necessary; – deploy mechanisms to guarantee that pharmacists are rewarded for dispensing generics, particularly as in some markets it is currently not economically attractive for them to do so due to their lower price; and – ensure that pharmacists are aware of the benefits of dispensing generics.
