Sustaining Generic Medicines Markets in Europe

Sustaining generic medicines markets 34in the late 1990s. For drugs in short supply, price increases were observed in 1999 (Kay andBaines, 2000). In response to this, the Government introduced a statutory price ceiling for themain generic medicines in 2000.A new pricing system for Category M generic medicines came into effect in 2005 which allowsfreedom of pricing. It also incorporates an additional measure to stimulate price competitionbetween generic medicines by enabling the Department of Health to intervene in the marketplaceif trends in medicine expenditure suggest that market mechanisms have failed to create pricecompetition. To date, the Department of Health has not availed itself of this measure.6.2.2 Reference pricingThe United Kingdom does not have a RPS.6.2.3 Incentives for physiciansA principal factor in stimulating generic medicines use has been the fact that medical students aretaught to prescribe by INN in British medical schools. In 2004, 79% of all prescription items wereprescribed by INN in England (Health and Social Care Information Centre, 2005).The United Kingdom has used medicine budgets to control pharmaceutical expenditure and toincite generic prescribing by GPs. Initially, medicine budgets were set at the level of the generalpractice under the fundholding scheme which ran from 1991 to 1997. Although budgets for GPswho did not become fundholders were indicative only, prescribing behaviour was controlled bypeer pressure and the threat of sanctions for GPs who overspent. Fundholding practices held anactual budget not only for medicines, but also for outpatient care, diagnostic testing, electivesurgery and community care. Savings on the budget could be reinvested in patient care or couldbe used to upgrade premises and practice-based facilities. Reviewing the fundholdingexperience, Gosden and Torgerson (1997) concluded that medicine costs of fundholdingpractices had increased at a lower rate as a consequence of increased generic prescribing thanthose of non-fundholders. However, as fundholding practices had different characteristics thannon-fundholders, this effect may have stemmed from selection bias rather than from fundholding.Budgets have also been set for groups of general practices as for example in the case of GP andlocality commissioning groups, total purchasing pilots and, more recently, primary care trusts. Areview of the first three years of operation of a sample of primary care trusts showed that manytrusts had set generic prescribing targets supported by incentive schemes, prescribing guidelines