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International trends in generics: the EU Posted 30/08/2010

Few studies have conducted an international price comparison of generic medicines as it is hard to access comparable data. A 2007 study by Prof. Dr. Steven Simoens examined national pricing policies in some EU countries and related them to generics prices (see Table 1).

Table 1: Generic medicine pricing policies and generic prices in selected countries in 2005

Country	Generic medicines pricing policy	Average factory gate prices for selected generics, 2005 (Euros)
Belgium	Generic medicines priced at least 30% lower than the original medicine	0.206
Denmark	Generic medicines priced below the price level of original	0.104
Finland	Free pricing system	0.220
France	Generic medicines priced at least 40% lower than the original medicine	0.254
Germany	Free pricing system	0.269
The Netherlands	A system of maximum prices based on reference country prices	0.260
Norway	A step-price system is in place that cuts the generic medicine price after a period of time	0.171
Sweden	Regulated generic medicine prices system	0.123
United Kingdom	Free pricing in a competitive environment	0.222

It is clear that another factor is affecting the price of generics, as the pricing policy does not directly govern the average price of generics. If the data is analysed from the perspective of maturity of the generics market, it can be seen that those countries in which generics have been established over a longer period of time pay less for their medicines (see Table 2).

Table 2: Generic medicine prices compared to regulatory approach and level of development of generic medicine market in 2005

Generic medicine prices and regulatory approach towards generic medicine pricing
Free market pricing		Pricing regulation
Country	Average price level	Country	Average price level
Finland Germany United Kingdom	0.237	Belgium Denmark France The Netherlands Norway Sweden	0.186
Generic medicine prices and level of development of generic medicine market
Developing generic medicine market		Mature generic medicine market
Belgium Finland France Norway	0.213	Denmark Germany The Netherlands Sweden United Kingdom	0.196

The international price variation suggests that generic medicine companies do not set prices at a common European level, but adapt their price setting strategy to the regulatory environment surrounding generic medicines in each country. The generic medicine price level was lower in countries that regulate prices and in countries that have a mature generic medicine market.

Reference

Simoens S. International comparison of generic medicine prices. Curr Med Res Opin. 2007;23(11):2647–54.

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