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Spanish government urged to increase generics volume Posted 04/06/2010

In response to recent stringent price-cutting measures introduced in Spain, the Director General of the European Generic Medicines Association (EGA), Mr Greg Perry, has written to the Spanish Minister for Health and Social Policy. He is concerned about the effect these “overly-harsh price cuts” may have on the economic sustainability of AESEG´s (the Spanish Generic Medicines Association) member companies.

The adoption of the Royal Decree on the Rationalisation of Drug Expenditure (Real Decreto de Raconalizacion del Gastro Farmaceutico [RDL4/2010]) in March 2010 has reduced the prices of both branded and generic medicines in Spain by up to 30%. For generics, the extent of these reductions depends on the difference between the reference and retail prices (for the public) and applies to all generics with a retail cost of more than Euros 3.12.

Spain is a developing generics market

The EGA urges that without countermeasures to ensure that generics are encouraged this could put in danger Spanish generic manufacturers, especially SMEs (small- and medium-sized enterprises). Spain is a less mature market, since generic medicines have only been permitted since January 1997. The volume of generic medicines in Spain remains low (14.6% of prescriptions), compared to markets such as the UK and Germany, where generic medicines represent more than 50% of prescriptions. Therefore the EGA states that “the full benefits of generic medicines can only be delivered if greater importance is placed on increasing volume use rather than simply focusing on price”.

Government urged to introduce new measures

The EGA urges that the objective should be to “double generic penetration in Spain over the next three years” in order to encourage generic penetration and compensate for the price cuts. A number of measures to encourage generic medicine sales are suggested, including:

Offering financial incentives to physicians and pharmacists to prescribe/dispense affordable generic medicines.
Raising awareness amongst physicians, pharmacists and the general public of the benefits of generic medicines.

The EGA concludes that, in order for the generics sector to survive, the volume of generic medicines needs to increase to at least 50% of prescriptions, as is the case in other mature markets.

References

EGA Press Release, Brussels, 6 May 2010

Moreno-Torres I, et al. Generic entry into a regulated pharmaceutical market, Economics Working Papers 1014, Department of Economics and Business, Universitat Pompeu Fabra, February 2007.

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