EGA Press Release

Tuesday, 23 March 2010

IMS REPORT HIGHLIGHTS IMPORTANCE OF GENERIC MEDICINES INDUSTRY SUSTAINABILITY FOR THE EU

The sustainability of the generic medicines sector is vital to ensure accessibility and affordability of modern day pharmaceuticals in global healthcare systems. This is the conclusion drawn in a report from IMS Health published yesterday, and welcomed by the European Generic medicines Association (EGA).

The report, entitled: “Generic Medicines: essential contributors to the long-term health of society - sector sustainability challenges in Europe”, shows that currently over half of the volume of EU medicines are generics, but this represents just 18% in value terms. The IMS report mentions that, to date, generic medicines in the EU have generated savings worth some €30 billion. Moreover, with the expansion of the EU to 27 member states, this figure could be set to double.

Significantly, the report stresses that treating generic medicines solely as a cost-saving mechanism will stifle their ability to deliver continued benefits long-term. The European generic medicines industry, it says, is increasingly innovative, ploughing 7% of revenues back into research and development in 2007. It also invests in product development, special medicines progammes, jobs in the EU (700 companies directly employing around 150,000), and is the driver behind the European biosimilar medicines initiative.

The impact of generic medicines on healthcare budgets is undeniable, the IMS report maintains. With drug spending set to increase by around 5% annually over the next 3-5 years, a long-term approach involving increased use of generic medicines could compensate for some of this rising cost without compromising outcomes, it concludes.

Against a background of prolonged life expectancy with diseases previously associated with high mortality and rising healthcare costs, the IMS report says activities aimed at restricting the role of generic medicines could have disastrous consequences for generic medicine manufacturers, patients, governments, payers and all other healthcare stakeholders.

Yet the IMS reports also highlights the major challenges to the generic medicines industry today. These include: increasing costs in a market undergoing constant price erosion; unsustainable policies and an unequal playing field compared to other geographical regions with regard to taxes; and an increasing regulatory/administrative burden with few incentives. They are compounded by time-to-market delays, as highlighted by the EU Pharmaceutical Sector Inquiry¹. “The report reflects our view that factors that limit the competitiveness and sustainability of the generic medicines sector are detrimental to healthcare economies, patients and the pharmaceutical industry as a whole,” said EGA director general Greg Perry.

The key conclusions of the report are that generic medicines:
• Provide an affordable, gold standard medication for many major illnesses
• Allow access to medicines for a greater proportion of the population
• Stimulate healthy competition with the branded sector
• Deliver savings to national health bills
• Enable future long-term savings in the expanding role of medicines vs hospitalisation
• Are high quality products

¹ Press release (IP/09/1098) on final report, 8th July 2009

Click Here for the IMS Report

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For further information contact Hugo Carradinha
Tel: +32 (0)2 736 84 11