patients • quality • value • sustainability • partnership
The challenges of the generic pharmaceutical industry
Adrian van den Hoven
14 November 2019
patients • quality • value • sustainability • partnership
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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patients • quality • value • sustainability • partnership
Medicines for Europe - Structure
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patients • quality • value • sustainability • partnership
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
patients • quality • value • sustainability • partnership
Generic medicinesA Cornerstone of Healthcare Sustainability
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patients • quality • value • sustainability • partnership
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 • quality • value • sustainability • partnership
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”
patients • quality • value • sustainability • partnership
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.
patients • quality • value • sustainability • partnership
Reduction of healthcare spendingFocus on pharmaceuticals
12
,3
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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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patients • quality • value • sustainability • partnership
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
?
?
?
patients • quality • value • sustainability • partnership
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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patients • quality • value • sustainability • partnership
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)
patients • quality • value • sustainability • partnership
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)
patients • quality • value • sustainability • partnership
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
patients • quality • value • sustainability • partnership
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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patients • quality • value • sustainability • partnership
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.
patients • quality • value • sustainability • partnership
THANK YOU!