The generics industry will struggle to build on its past successes in the UK if government policies on pricing and reimbursement are not addressed, according to British Generic Manufacturers Association (BGMA) director Warwick Smith.

He told the Annual Conference of the European Generic medicines Association (EGA) in Budapest that the British government needs to give generic medicines in the UK a fairer deal.

“Over the last year, the market share of generics in the UK has risen by 5%, but prices have fallen by 3%,” said Smith. “But pricing must be at a sustainable level if we are to be able to continue to make that vital contribution. The price erosion that we’ve seen in the past year puts that at risk.”

Smith also highlighted deficiencies in the way in which the system for reimbursement of generic drugs, introduced in June 2005, is being implemented by the Department of Health.

“The risks to the industry’s sustainability have been exacerbated by frequent recalibrations by the Department of Health of the reimbursement prices for generics. These recalibrations change the total amount the NHS spends on generics and radically change the reimbursement price of all generic medicines.

Frequent recalibration is contrary to the agreement between the Department and the BGMA which provides for annual recalibrations, claims Smith, who pointed out that one objective of the new system of reimbursement was to introduce greater stability into the generics market.

“The DH’s actions have just brought about greater uncertainty in the market place. This has contributed to price erosion,” he maintains.

Smith also called again for off patent brands to be reimbursed under the same system as generics rather than falling within the Pharmaceutical Price Regulation Scheme (PPRS), which controls medicine prices in the UK and is designed to secure branded medicines for the NHS at reasonable prices whilst at the same time promoting a strong and profitable pharmaceutical industry.

“Off patent brands and generics are competing with each other to fill prescriptions written generically. Whilst off patent brands fall within the PPRS, we have the ridiculous situation where brand originators can subsidise those products by increasing the price of their monopoly products,” according to Smith.

Products competing in the same market for the same business should be reimbursed under the same system and have the same degree of transparency. The current arrangements further undermine the sustainability of the generic industry, he claims.