CPhI 2015: The real need for generic medicines in EU, Alan Sheppard (IMS Health)

Providing affordable healthcare that meets acceptable standards is a major challenge in most European countries. Resources are pulled in many directions, and European economies struggle to raise sufficient funds from taxation to cover their budgets.

Public expenditure on health in the EU reached an average of 8.7% of GDP in 2012, having increased from 5.7% in 1980. On average, Western European countries spend 8 to 12 percent of their gross domestic product on healthcare – a proportion that has remained stable despite the global economic crisis, according to the Organization for Economic Cooperation and Development–despite the increasing demand. The specific proportion of GDP spent on healthcare varies widely between Member States: it is above 11% in Austria, Denmark, France, Germany, and the Netherlands; below 6% in Estonia, Latvia, and Romania.

Spending on pharmaceuticals, on average, accounted for almost a fifth of all healthcare expenditure across EU member states in 2012, making it the third largest spending component after inpatient and outpatient care. The economic crisis has had a significant effect on the growth in pharmaceutical spending in many European countries. Between 2000 and 2009, annual pharmaceutical expenditure per capita grew on average by 3.7% in real terms in EU member states, but fell in the following three consecutive years. On average, pharmaceutical spending fell by over 2% per year in real terms between 2009 and 2012 across EU member states.

…/…

So where do generic medicines fit in? The value of generic medicines does not just lie in the role that they play in reducing the cost of therapies for post patent expiry usage of key medicines. They increase patient access to well established and proven therapies in many disease areas, however they represent only a very small part of the healthcare budget. In Europe, over half of prescription medicines are generic, but these only represent 25% of the total medicine expenditure. As a tool, generic medicines provide a cost-effective solution to managing the budget spent on medicines, without compromising proscription freedom or therapeutic choice. 

Generic medicines stimulate innovation, both within the generic sector and the discovery and development of new medicines. With drug budgets under scrutiny, generic medicines can help control costs whilst still allowing headroom for additional expenditure required for new medicines, addressing unmet clinical needs. 

Generic medicines represent many of the therapies required for the treatment of diseases in an ageing population and as such provide a safe, effective and affordable solution. Growth in the generics sector should be seen as a positive step and as essential component of cost containment. Any existing negative incentives should be removed without delay if the full benefit of generic medicines is to be realized. 
Positive measures aimed at increasing usage of generics can provide a far more sustainable solution to cost containment rather than the arbitrary lowering of prices of generic medicines which may only result in marginal savings and could act as a disincentive for increased usage. Sustainable policies for pricing and reimbursement are essential if generic medicines are to be an effective resource in controlling long term costs. Without generic medicines, the cost of healthcare would surely be unaffordable.

 Click sobre imagen para ampliar