Greater use of generics saved Germany's public health insurance funds 12.9 billion euros in 2011 compared to 10.1 billion euros the year before, according to new industry figures.
The Gesetzliche Krankenkasse (GKV) public funds, which cover around 85% of the population, paid less than a third of the price of originator branded products for the generics which they supplied last year, and generics accounted for 81% of the GKV off-patent branded market during the year, according to figures from the German generics manufacturers' association ProGenerika, quoted by IHS Global Insight. The savings reported do not include gains made through Germany's rebate system for generic drugs.
Germany spends more than any other European nation on health care, and in recent years generics have accounted for over a third of the market in terms of value. With drugs valued at around $33.2 billion worldwide set to lose patent protection this year, more than double last year's total of $15.3 billion, Germany's generics market is forecast to expand still further.
Nevertheless, analysts at IHS Global Insight point out that Germany represents a "difficult competitive environment" for generic drugmakers.
"The 153 GKV funds that are active on the rebate front will be eager to seal further discount agreements with generics makers during 2012. Last year, a total of 16,129 rebate deais were signed in Germany, up from 12,390 during 2010. Overall, a total of 33.190 preparations were the subject of generic rebates last year," they write.
IHS has also recently published a comparison of the differences in prices between originator and generic products in five European nations - France, Germany, Italy, Spain and the UK. This shows the biggest price differences are in Germany, where they average 40% and can be as high as 71%. In comparison, in France the average price difference is 30% and the highest is 71%, for Italy the average is 16% and the highest 56%, in Spain the figures are 13% and 57% and in the UK the average price difference is 15%, with a highest difference of 86%.
In Germany, as in the UK, generic pricing strategies are left to market forces, and while generic entry is very likely to trigger a price drop, "this is not an absolute certainty," says Floriane Reinaud, principal analyst at IHS Healthcare Practice.
Price differentials in Germany can range from generics being more expensive than the originators to generics being over 80% less expensive, she says.
"Keep in mind that in Germany there are a large number of generic players, triggering fierce competition which could explain those large price differentials," Ms Reinaud advises. "This also explains why - depending on the strategies implemented by companies - generic prices are sometimes found to be the lowest or the highest," she adds.
The data was taken from IHS PharmaOnline International, a pharmaceutical pricing data and analysis tool providing coverage of all branded and generic drugs in over 36 developed and emerging markets.