EGA Press Release

Thursday, 6 May 2010

OPEN LETTER TO THE SPANISH HEALTH AND SOCIAL POLICY MINISTER: Price cuts must be followed by increase in patient access to generic medicines

Dear Minister,

I am writing to you on behalf of the European Generic Medicines Association (EGA). The EGA is the official representative body of the European generic and biosimilar pharmaceutical industry, which is at the forefront of the effort to provide high-quality, affordable medicines to millions of Europeans and to stimulate competitiveness and innovation in the pharmaceutical sector.

The EGA represents over 800 companies in 34 European countries, which provide over 150,000 jobs. Generic medicines account for nearly 50% of packs dispensed in the EU and 18% of pharmaceutical expenditure, and bring savings of over €25-30 Billion per annum to the EU 27. The EGA and its members work with European national governments and EU institutions to develop affordable solutions for pharmaceutical care and to increase Europe’s competitive strength in the global pharmaceutical market. AESEG, the Spanish Generic Medicines Association, is a member of the EGA.

In the context of the recent price-cutting measures that have affected the generic medicines industry after the adoption of the Real Decreto de Racionalización del Gasto Farmacéutico (RDL4/2010) on 14th March 2010, we would like to make the following comments:

The EGA is of the opinion that these measures are harsh, stringent and put in danger the economic sustainability of AESEG´s member companies, especially of those that are SMEs. However, the EGA welcomes the statement that you made during the debate on the Real Decreto in the Plennary Session of the Spanish Parliament where you said that the proposed measures needed to be completed with additional measures in order to help increase the sales of generic medicines. The objective would be to double generic penetration in Spain over the next three years. The price cuts can therefore be compensated by a compromise solution from your Government, aimed at increasing generic medicines sales. Moreover, this will bring major benefit to regional health systems and Spanish patients as there will be greater access to affordable generic medicines.

Therefore, in this context, the EGA, in line with AESEG’s proposals, urges the Spanish government to introduce mechanisms to influence the prescribing and dispensing behaviour of physicians and pharmacists in Spain. The EGA encourages the following measures:

• Urge regional public health authorities to rationalise public expenditure by offering financial incentives to doctors to prescribe affordable generic medicines.
• The EGA stresses the importance of putting in place coherent healthcare policies that incentivise patients, physicians and pharmacists to use generic medicines in order to ensure the affordability and sustainability of healthcare. It is in the interests of all European patients and healthcare systems that prescription decisions should take account of the affordability and cost-effectiveness of different medicines.
• Establish systems that are based on budgetary incentives, allocating prescription budgets to physicians and granting them the discretion to use those savings to prescribe more expensive treatments where necessary.
• Take steps to raise awareness amongst physicians of the benefits of generic medicines. Physicians need coherent and harmonised support throughout Europe in terms of the greater availability of prescribing information, computerised prescribing, medicines databases, prescribing from an independent body and prescription audits.
• Reduce the discretion of doctors to refuse generic dispensing by introducing mechanisms to encourage physicians to prescribe generic medicines, thus promoting their use.
• Deploy mechanisms to guarantee that pharmacists are rewarded for dispensing generic medicines, particularly as it is currently not economically attractive for pharmacists to dispense generic medicines in some markets due to their low price.
• Ensure that pharmacists are aware of the benefits of dispensing generic medicines.
• Launch informative campaigns directed at Spanish citizens, informing them as to the quality of generic medicines and encouraging them to buy affordable generic medicines.

To conclude, I would like to draw your attention to the statement on page 4 of the last IMS report “Generic Medicines: essential contributors to the long term health of society” . This stresses that: “In the most developed generic medicines markets, such as the UK and Germany, their volume use represents more than half of the total market. However, in less mature generic medicines markets, such as Spain and Italy, volumes remain low. Thus, in order to deliver the full benefits of generic medicines, greater importance must be placed on increasing volume use rather than focusing simply on price. Introducing educational programmes for prescribers, dispensers and patients, to demonstrate the benefits of treatment regimens incorporating generic medicines, could be one useful way of achieving this. Reducing the price of generic medicines in low volume markets can severely challenge the sector’s sustainability. In these countries the cost of maintaining the essential infrastructure related to registration costs, pharmacovigilance and other legal requirements will not be covered by the revenues generated. More affordable and lower-priced treatments will be a natural result of increasing the demand for generic medicines and will raise the level of competition in all markets.”

For all the reasons I have outlined, we think that it is very important for your Government to encourage measures that will foster generic penetration and compensate for the overly-harsh price cuts introduced by the RDL 4/2010. In order for the sector to survive, we support AESEG’s position that generic medicines need to reach in the next three years a penetration rate of at least 50%, as is the case in other mature markets.

Yours sincerely, Greg Perry Director General of the EGA

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For further information contact Lidia Mallo
E-mail: lmallo@egagenerics.com