the challenges of the generic pharmaceutical industry in ......source: euripid guidance document on...

patients • quality • value • sustainability • partnership

The challenges of the generic pharmaceutical industry

Adrian van den Hoven

14 November 2019


Medicines for Europe Vision 2020 Our 5 pillars

PARTNERSHIP

PATIENTS

Me

dic

ine

s Fo

r Eu

rop

e

VIS

ION

QUALITY

VALUE

SUSTAINABILITY

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Medicines for Europe - Structure

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Better Access, Better Health

Med

icin

es fo

r Eu

rop

eGeneric

Medicines

Biosimilar Medicines

Value Added Medicines

4

Our Vision: Provide sustainable access to high quality medicines, based on 5 important pillars: patients, quality, value, sustainability and partnership.

Our Members: • Employ 160,000 people at over 350

manufacturing and R&D sites in Europe, and invest up to 17% of their turnover in medical innovation.

• Increase access to medicines and drive improved health outcomes.

Our collective expertise: off-patent medicines which have proven clinically useful over the years, are effective in the largest part of the

population; their development & manufacturing, their regulation, their market dynamics

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Generic Medicines


Generic medicinesA Cornerstone of Healthcare Sustainability

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Generic medicines are key tohealthcare sustainability

Increased access to medicines

Better health outcomes

Improved medication adherence

Positive Economic impact

Reduction of health

inequalitiesVALUE OF GENERIC

MEDICINES

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Patients’ unmet needs

“A significant percentage of patients with asthma did not

consume the medication prescribed either due to lack of a

prescription or due to lack of economic means to buy the

medication and/or to pay the cost-sharing expenses”

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Source: OECD “Health at a Glance: Europe 2018”


2017 (mn €) % 2018 (mn €) %

Total value of prescriptions in private pharmacies

2,705 2,757

Total copayment (a+b) 670 24.8% 678 24.6%

a. Basic co-payment 10% or 25%σ

395 14.6% 395 14.3%

b. Additional co-payment in case of choosing off-patent whereby there are generics

available σ

275 10.2% 283 10.3%

Co-payments in the outpatient market* and generic medicines substitution

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*Includes the value and copayments for medicines reimbursed by EOPYY through the private pharmacies channel between 2017-2018.Does not include the value of High Cost Medicines dispensed through EOPYY owned pharmacies

Physicians need to explicitly give permission for generic substitution

Physicians can prevent it

Pharmacists are obliged to inform the patient

Patients can refuse

Due to the pharmacy margin structure (30% for medicines with retail price from 0.01€ to 50€), and the fact that pharmacists

receive in cash the difference between retail price and reimbursement price, which in most cases relates to generics,

pharmacists are actually incentivised to dispense the highest price alternative leading to a low use of generic medicines.


Reduction of healthcare spendingFocus on pharmaceuticals

12

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-5,0

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15,02005-09 2009-14

Average annual growth in pharmaceutical expenditure1 per capita, in real terms, 2005-09 and 2009-14 (or nearest year)

Source: OECD Health at a Glance: Europe 2016

1 Includes medical non-durables.

%

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In the Structural AdjustmentProgram (SAP) implementedin Greece after 2012,pharmaceutical expenditureshould not exceed €1.945billion every year after 2015.If the limits were to beexceeded, clawbacks frompharmaceutical companieswould be used to balance thebudget(1).

Public outpatient pharmaceutical expenditure in Greece 2009-2022 (mn €)

Source : SSFs General Secretariat, EOPYY, Law 4549/2018)*estimated(1) Konstantakopoulou O, Kaitelidou D, Economou C and Charalambous G (2018) Barriers in Access to Pharmaceutical Care in Greece: The Case Study of the Out-of-Hospital Management of Patients With Acute Asthma. Front. Public Health 6:199. doi: 10.3389/fpubh.2018.00199

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5.108

4.522

3.750

2.8452.371

2.019 2.000 1.945 1.945 1.945 1.945 1.945 1.945 1.945

219

177

226 300 303 417 457 500

79

152

202319 451

478 572810

0

1.000

2.000

3.000

4.000

5.000

6.000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020 2021 2022

Net public pharmaceutical expenditure Rebate Clawback

?

?

?


Pharmaceutical cost of the uninsured

Source : ΕΟPYY, Monitor Committee for the Pharmaceutical Expenditure

YearCost of the uninsured

Change (%) compared to previous year

Clawback (1) Uninsured costas % of Clawback

2016 65 mn € - 699 mn € 9.3%

2017 165 mn € 154% 742 mn € 22.2%

2018 ~ 230 mn € (2) 39% ~ 920 mn € (2) 25.0%

2019 ~ 280 mn € (3) 22% ~ 1,000 mn € (2) 28.0%

1. Outpatient + Hospital2. Estimation3. Estimation according to Q1-2019

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Generic market penetration in Greecethe impact of double cost-cutting measures

Source: IQVIA, report Q3-2018

Greece has one of the lowest genericprices in Europe due to ERP and lowgeneric use due to absence of uptakepolicies

In addition, Greece applies clawbacktaxes to Generic manufacturers incase of budget overrun.

Competition is not encouraged andGeneric manufacturers struggle toenter/remain in these markets

Less patients are treated with genericsand the healthcare system remainsinefficient

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… however, it has one of the lowestgeneric penetration in the EUmarket

Greece presents the higherpenetration market of on-patentmedicines and the second largestfor off-patent original medicines …

The actual consumption of on-patents is underestimated since a large amount of them is dispensed through the EOPYY owned pharmacies.This is not recorded in this graph since IQVIA records only sales through the private pharmacies.

Off-patent

original drugs

volume m.s.

(% SUs)

On-patent

volume m.s.

(% SUs)

Generics

volume m.s.

(% SUs)


Pharmaceutical P&R policy in Greece

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Source: “Medicines reimbursement policies in Europe”, WHO (2018)

• Οn-patent and off patent : average of the two lowest pricesamong the Eurozone MS

• Generics: 65% of the originator reference product• Prices are reviewed once per year

PRICINGExternal Reference

Pricing

• Positive Reimbursement List in ATC4 level with manyexceptions.

REIMBURSEMENTInternal

Reference Pricing

• Medicines with a higher retail price than the ref. price: the patient pays 0% or10% or 25% over the ref. price plus the difference between retail and ref. price upto 20€.

• Medicines with no generics marketed in the molecule: the patient pays 50% ofthe difference between the ref. and retail prices; the remainder is paid by EOPYYwhile the MAH is charged with an increased rebate.

CO-PAYMENTS

• Medicines can be purchased directly from the manufacturers.• Purchase price is 8.74% lower than the ex-factory price

PUBLIC HOSPITALS & EOPYY PHARMACIES

“Evidence shows thatERP takes full effectwhen it is used fordetermining themaximum price ofmedicinal productswithout generic ortherapeuticcompetition”

Source: Euripid Guidance Document on External Reference Pricing (ERP) (July 2018)


Expenditure, rebate, and clawback

ΕΟPYY outpatient expenditure a’2014 – a’2018 (per semester)

Source: ΕΟPYY, Rebate & Clawback official letters to MAHs

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312 324364 368 392 415

459 461527

566 595

936890

947 964 962 957 957 966 973 990 1.009

-101 -126 -146 -153 -152 -152 -210 -207 -223 -234 -251-128 -74

-152 -167 -216 -235-218 -261 -291 -281

-360

-700

-500

-300

-100

100

300

500

700

900

1.100

Α '14 Β '14 Α '15 Β '15 Α '16 Β '16 Α '17 Β '17 Α '18 Β '18 Α '19

EXPENDITURE @EOPYY PHARMACIES EXPENDITURE @PRIVATE PHARMACIES MAHs REBATES MAHs CLAWBACK


Barriers to generic competitioncontribute to wasteful spending

Less generic competition

Price cuts

Payback and

Clawback

More wasteful spending

Reference pricing

Absence of incentives

Hidden barriers

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Focus on the implementation of structural reforms

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Provide incentives to pharmacists in order to enhance generics dispensing.

Generics pricing should be driven by competition rather than by ERP.

Fairer clawback allocation based on the principle of proportionality whereby generics should be exempted.


THANK YOU!

the challenges of the generic pharmaceutical industry in ......source: euripid guidance document on...

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