Volume 194 - Issue 1
Expiry of patent protection on statins: effects on pharmaceutical expenditure in Australia
Author: Steven R A Simoens
Med J Aust 2011; 194 (1): 52-54. || doi: 10.5694/j.1326-5377.2011.tb04156.x
Published online: 3 January 2011
Published online: 3 January 2011
To the Editor: Clarke and Fitzgerald showed that substantial savings could arise from the implementation of alternative pricing arrangements for off-patent statins that provide incentives to reduce prices and increase generic substitution.1 This is exemplified by comparing statin prices between Australia and England. Europe offers some more lessons with respect to savings based on generic medicine usage and how they can be attained.
The size of savings reported by Clarke and Fitzgerald needs to be interpreted with caution. A scenario of 100% generic substitution is proposed. Such a scenario has not been observed in any European country and, for therapeutic reasons, is probably not desirable.2 Furthermore, the comparator country matters: for instance, generic medicine prices in England are lower than in France, the Netherlands and Germany, but are higher than those in Scandinavian countries.3 Finally, the implementation of a tendering system for statins may create unintended effects, such as a switch in prescribing behaviour. For example, the Belgian tendering system for simvastatin reduced expenditure on off-patent medicines containing simvastatin by 30%, but increased expenditure for patented medicines containing atorvastatin or rosuvastatin by 16% and 40%, respectively.4
Clarke and Fitzgerald’s article does not go into detail on how savings can be attained through use of generic medicines. The majority of European countries regulate generic medicine prices by pricing rules or reference pricing. For instance, the implementation of a minimum price difference between originator and generic medicines is the driver of savings arising from generic substitution in some countries, including France, Portugal and Spain. The reference pricing system in Norway stimulated generic competition to a greater extent and led to lower prices than regulation that imposed maximum prices.4 However, price regulation may constitute a barrier for further price competition: no additional price reductions may occur beyond those imposed by regulation.4
The European experience also indicates that the ability of the generic medicine industry to deliver competitive prices can be achieved if it is assured a high volume of the pharmaceutical market. High volume is dependent on demand-side measures that create incentives for physicians, pharmacists and patients to use generic medicines. For example, a European study showed that savings as a result of price competition are higher in countries that have a higher market share of generic medicines.5 Therefore, demand-side measures are critical to increase the generic substitution rate and to maximise the effect of competition based on generic medicine prices.
References
- Clarke PM, Fitzgerald EM. Expiry of patent protection on statins: effects on pharmaceutical expenditure in Australia. Med J Aust 2010; 192: 633-636.
- Simoens S, De Coster S. Potential savings from increased substitution of generic for originator medicines in Europe. J Generic Med 2006; 4: 43-45. 0_CBBDAIAF
- Simoens S. International comparison of generic medicine prices. Curr Med Res Opin 2007; 23: 2647-2654. 0_CBBDFJCC
- Dylst P, Simoens S. Generic medicine pricing policies in Europe: current status and impact. Pharmaceuticals 2010; 3: 471-481. 0_i1095415
- Dylst P, Simoens S. Does the market share of generic medicines influence the price level? A European analysis. Pharmacoeconomics 2010. In press. 0_i1095417