An ageing population and rising costs are leading to wider use of generics, creating a highly competitive industry which is in turn pressurising the mainstream pharmaceutical sector to develop innovative drugs, claims a new report.
As a result of this, “an immediate need for cheap, effective medicines will be the main drivers in the European generics market”, notes Frost & Sullivan research analyst Sumanth Kambhammettu in a study called Pricing and Reimbursement Issues for Generics and Biosimilar Markets in Europe.
The study claims that “faced with the mounting burden of rising pharmaceutical costs and a rapidly ageing population,” European governments are under immense pressure to implement corrective measures and several have resorted to methods such as generic substitution and reference pricing to lower pharmaceutical costs. Additionally, some countries are offering incentives to pharmacists and physicians to prescribe generics, a trend that will have a considerable impact on the market, while the advent of biosimilars is also projected to a key factor in pushing down drug prices.
However, “although EU accession is believed to provide long-term benefits to generics manufacturers, policy harmonisation is expected to take a few years,” said Mr Kambhammettu, who said that the lack of initiatives such as the Roche/Bolar provision, which allows for research to be carried out before the loss of patent exclusivity, will delay generic approvals in Europe.”
The study concludes that to succeed in a highly competitive environment and accelerate their time-to-market, “participants should leverage the potential of low-cost contract manufacturing markets such as India and China.” It adds that strategic agreements between companies operating in different countries will also yield synergistic benefits and efforts must be directed to optimising product portfolios and devising long-term R&D strategies.