Brussels, 11 Apr 2006
A new report from researchers at the Catholic University of Leuven has recommended a strengthening of the generic pharmaceuticals market, which could reduce the costs for EU heath services considerably.
The report, written by Professor Steven Simoens and Sandra De Coster at the Centre for Drug and Patient Information, suggests that if the top ten pharmaceuticals were substituted for generic equivalents, pharmaceutical expenditure would drop by between and 48 per cent, depending on the specific Member State.
Generic medicines are unbranded and will contain identical active ingredients to those in the more familiar branded products. The main differences could be in packaging, value-added components, such as taste, or simply in price - generic medicines are typically 20 to 80 per cent of the cost of the branded equivalents.
While paying less for a medicine with identical active ingredients makes good economic sense, a stronger generic medicine market could also encourage 'originator companies to develop innovative medicines and to reduce prices on off-patent originator medicines, thus generating additional savings to patients'.
In order to achieve these savings, the report urges a coherent EU policy on the use of generic medicines, which varies considerably between Member States. In Germany and the UK, the generic pharmaceutical market is effectively deregulated, with a free pricing policy. The study found this approach to be successful, but in the Netherlands and Denmark, pharmacists drive the generic substitution market, which, coupled with the free pricing policy is more effective again.
In short, the report recommends seven points to boost the generic market: a coherent EU-wide policy governing generic medicines; a free pricing policy; information passed on to both doctors and pharmacists about the differences in price between generic and branded medicines; a confidence boost for the efficacy of generic medicines with doctors; incentives for doctors who prescribe generic medicines; removal of disincentives to do the same; and incentives for patients to demand generics.
The researchers drew their conclusions from a systematic review of the policies and approaches taken throughout Europe. Professor Simoens hopes that the report will 'aid policy makers in gaining a better understanding of how pharmaceutical companies, physicians, pharmacists and patients react to incentives created by generic medicines policy, and [...] propose tools that policy makers can use to continue developing domestic generic medicines retail markets.'