Sustaining Generic Medicines Markets in Europe

Sustaining generic medicines markets 5510.3 Policy analysisThe marketing of copies during the period covered by the patent has presented an obstacle togeneric medicines entry. Furthermore, the prolongation of patent coverage postponed the onsetof generic competition.Establishing the RP at the level of the price of the cheapest medicine and the absence ofincentives for physicians and pharmacists to demand generic medicines has led to a low-price,low-volume market. This inhibits the economic viability of generic medicines entering andremaining on the market. In the absence of generic medicines, there is no incentive for originatoroff-patent medicines to reduce prices and the RPS has little impact. Furthermore, theimplementation of the RPS seems to have been accompanied by some re-allocation of demandtowards medicines not covered by the RPS.Physicians face few incentives to prescribe generic medicines and existing incentives are weak.The impact of initiatives promoting generic medicines use is likely to be limited. Initiatives arevoluntary and there is substantial variation in the extent to which local health enterprises haveimplemented them. Moreover, the absence of effective sanctions if physicians fail to adhere tothese initiatives is likely to restrict their effectiveness. There are few incentives for pharmacists topromote generic medicines use as generic substitution is voluntary and not in the financialinterests of pharmacists.Key factors hindering the development of the generic medicines market:• The existence of a market of copies and the extension of patent coverage posed barriers tothe development of the Italian generic medicines market• Setting the RP at the level of the cheapest generic medicine inhibits generic medicines entry,especially when considered in combination with the low volume of generic medicinesconsumption• Physicians face few incentives to prescribe generic medicines• Pharmacists are financially penalised for dispensing generic medicines