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Policies to lower prices of generics in Austria and Finland Posted 04/12/2015

In this era of austerity many governments have introduced policies aimed at reducing the price of generics. In Austria, measures taken to reduce the cost of medicines include generic price linkage. While in Finland generics substitution and reference pricing have been introduced.

In order to assess the impact of such different measures on the price of medicines, researchers compared the prices of generics and originators and the number of generics entering the market in Austria and in Finland [1].

Their results were presented at the 3rd International PPRI Conference 2015: Pharmaceutical Pricing and Reimbursement Policies: Challenges Beyond the Financial Crisis, which took place in Vienna, Austria on 12–13 October 2015.

The study, which used a time series design to estimate changes in price levels between 2009 and 2013, was carried out by researchers from the Social Insurance Institution, Helsinki, Finland and the WHO Collaborating Centre for Pricing and Reimbursement Policies, Vienna, Austria. Ten active ingredients with high sales in Finland and reimbursable in both countries were included in the analysis. Prices of originator products whose patent protection expired during 2010–2012 and their respective generics were analysed 6 months before and 12 months after generics entry.

The results presented by the researchers claimed that one year after generics entry, prices of the originators had fallen, on average, by 46% in Austria and by 21% in Finland. Prices of the generics were 66% lower in Austria and 59% lower in Finland than prices of the originators before generics entry. The mean number of generics per active ingredient was 6.3 in Austria and 5.1 in Finland.

The authors found that ‘the Austrian pricing system appears to be more efficient to lower prices’ despite the fact that uptake of generics is lower in Austria (26% by volume) than in Finland (36%). They hypothesized that price competition in Finland may be reduced by a ‘concentrated generics market’.

The authors also disputed the statement made previously that free competition lowers generics prices more efficiently than linking the price of a generic drug to the price of the originator [2]. They believe that the ‘success of a policy measure also largely depends on how the details of the measure are constructed’. In fact, this has been shown in a study by Brekke et al., where it was found that introducing reference pricing with price caps might actually increase the number of generics on the market [3].

Conflict of interest
The authors of the poster [1] did not provide any conflict of interest statement.

Editor’s comment
It should be noted that data of the study presented in this article were published as a poster and presented at a conference. These data and conclusions should be considered to be preliminary until published in a peer-reviewed journal.

Related articles
Pricing strategies in generic medicines

International trends in generics: the EU

References
1.   Martikainen JE, Maljanen T, Koskinen H, Vogler S. Impact of Generic Price Linkage System and Reference Price System on prices of pharmaceuticals–comparison of Austria and Finland. J Pharm Policy Pract. 2015;8(Suppl 1):P2.
2.   GaBI Online - Generics and Biosimilars Initiative. Challenges facing generic manufacturers in Europe [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Dec 4]. Available from: www.gabionline.net/Reports/Challenges-facing-generic-manufacturers-in-Europe
3.   GaBI Online - Generics and Biosimilars Initiative. Effect of price caps and reference pricing on generics entry [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Dec 4]. Available from: www.gabionline.net/Generics/Research/Effect-of-price-caps-and-reference-pricing-on-generics-entry

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