EGA Press Release

Tuesday, 1 April 2009

PRESSURES ON GENERIC MEDICINES PUT EU HEALTHCARE AT RISK

“The future of the European generic medicines industry is under serious threat, which places both the sustainability of European healthcare and European industrial competitiveness at serious risk.”

This was the stark warning given by Greg Perry, director general EGA, at a conference on healthcare sustainability organised by the EGA yesterday in Prague under the patronage of the Czech Presidency.

In his opening speech, Pavel Hrobon MD, the Czech deputy health minister, reiterated the critical role of generic medicines in ensuring access to medicines for patients and for the long term sustainability of EU healthcare. In fact, generic medicines account for nearly 50% of medicines dispensed in Europe, but less than 18% of pharmaceutical costs.

Mr Perry, however, stressed that whilst the European generic medicines industry is highly competitive, it is forced to operate in a highly uncompetitive environment. He welcomed the EU sector inquiry into the pharmaceutical industry that has identified unjustifiable anti-competitive factors operating against generic medicines. But he said other issues impacting the sustainability of his industry must also be resolved; these include dramatic government-forced price reductions, restrictive tendering systems, increasing regulatory costs, and the lack of EU national government measures to stimulate greater patient access to and use of generic medicines.

These concerns were echoed by Prof Dr Steven Simoens of the Katholieke Universiteit Leuven who indicated that governments must focus on demand side measures to promote greater use of generics rather than on price cutting, price setting and price tendering. Further savings of 27-48% could be obtained through use of generic medicines and the affordable prices the industry could ensure through natural competitive forces.

Mr Perry identified price tendering as the single most short-sighted instrument working against the long-term sustainability of EU healthcare systems. “Tendering schemes”, he said, “kill competition, do unimaginable damage to business and human resource planning, and threaten the security of medicines supply. These schemes provide short term market access for only a limited range of products for a limited number of companies. No industry can operate long under such conditions.”

Noting figures from IMS that show a sharp decrease in the growth of the generic medicines industry over the past two years, Mr Perry asserted that current trends are endangering the industry’s ability to invest in the development of new generic products and in incremental innovations such as improved formulations. They also threaten the future development of more affordable biosimilar and biopharmaceutical products.

“At this rate I cannot see how policy makers can expect us to continue to meet healthcare expectations”, Mr Perry said, “let alone remain competitive in the global generic medicines markets while maintaining the 130,000 jobs our industry creates in Europe.”

The conference brought together representatives of EU Member State pricing and reimbursement agencies, insurance payers, patient and consumer groups, doctors’ and pharmacists’ associations, and generic medicines companies. The event was sponsored by TEVA Pharmaceuticals Europe BV.

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