Sustaining Generic Medicines Markets in Europe

Abstract

The size of generic medicines retail markets varies widely among European countries, owing to differences in the policy environment surrounding generic medicines. This study aims to provide a comparative analysis of policy tools that European countries have used to develop their generic medicines market and to formulate recommendations for sustaining generic medicines markets. The European experience indicates that there is no single approach towards developing a generic medicines market. Penetration of generic medicines is more successful in countries that permit (relatively) free medicine pricing. Reference-pricing systems do not aid generic medicine use if the price of originator medicines falls to the reference price level. Physician budgets stimulate generic medicine use if accompanied by rewards/sanctions for budget surpluses/deficits, respectively. Generic substitution aids generic medicine use if it is financially attractive to pharmacists to substitute generic for originator medicines. Patient co-payment seems to affect demand for generic medicines. This study shows that coordinated government policies are critically needed in many European countries. To sustain the development of a generic medicines market, countries need to supplement supply-side policies, such as pricing reductions, by demand-side policies that create incentives for physicians, pharmacists and patients to use generic medicines.