One of the biggest obstacles that generic medicines had to overcome when they landed in Spanish healthcare, just now 25 years ago, was prejudice. Doctors and patients had to be convinced that these drugs, although cheaper, are just as effective and safe as brand name drugs, and this sometimes cost more than facing the technological challenges of setting up a new sector. “We ran into many barriers to entry, but we managed to gain a foothold in pharmacies and become a key player in the health system,” recalls Ángel Luís Rodríguez de la Cuerda, general secretary of the sector’s employers’ association, the Spanish Association of Generic Medicines. (AESEG).
A quarter century later, however, these drugs have been stagnant for nearly a decade and are showing some signs of regression. Two out of every five pills that are sold in pharmacies today are generic, which represents 21% of public spending in euros (2,234 million out of a total of 10,720). These are practically the same figures as in 2014. And the part of the pie that generic medicines manage to scratch from brand name medicines when a patent expires is getting smaller and smaller: if in 2011 they had almost half the market share in the first two years, now they barely get 10%. Since no one doubts the quality of these drugs, the great obstacle now seems to be regulations and the organization of the system.
“Spain has been left behind. Generics as a whole have been anchored for years in a 41% market share, compared to 65% in the European Union and almost 90% in the United States”, laments Rafael Borràs, director of institutional relations in Spain at Teva, the world’s largest generic manufacturer.
All the stakeholders consulted agree on the benefits of a competitive generics sector for the healthcare system. “Brand name drugs wouldn’t drop in price without your pressure. A box of omeprazole cost 36 euros 25 years ago and today it is worth 2.50. Half of the generics have a price of less than 1.60 euros. All this represents a saving of more than 1,000 million a year for public health”, explains Rodríguez de la Cuerda.
Generics are also the necessary complement for brand names to continue innovating, according to Miguel Martínez, director of marketing of the consultant specialized in the pharmaceutical sector Iqvia. “Innovation is brought by the brand name drug, but the pressure from the generic has a double benefit: it drives prices down and it pushes the brand name manufacturer to keep researching,” he says.
The history of generics in Spain can be divided into three well-defined stages. The first started with its release on the market in 1997 and lasted until 2008. They were difficult years and the market share achieved was not very high, close to 15%. But the most difficult thing had been achieved: gaining a foothold in the health system.
The second stage is the result of the economic crisis. In 2008, the Ministry of Health and the communities adopted measures such as promoting the prescription by active principle and, when this occurred, forcing pharmacists to dispense a generic instead of a brand medicine. The results are noticeable immediately and the market share begins to grow non-stop until approaching 40% in just four years.
legal changes
And then, in 2015, comes a break that lasts until today. “There are several legal changes that no longer oblige the pharmacist to dispense the generic before a prescription for active ingredient. And this does not help him because, at the same price and without other incentives, it is very easy for brand-name medicines to maintain market share: it is the one that is already positioned”, affirms Borràs.
Structural changes in the sector have not helped generics either, according to Jaume Puig Junoy, professor at the UPF Barcelona School of Management: “Before, there were big drugstore sales [como el Lyrica] which, when patents expired, opened up huge markets for generics. But for years now innovation has shifted towards hospitals. Drugs sold in pharmacies whose patent is expiring have significantly lower sales and, therefore, may attract fewer generic manufacturers.
The sources consulted defend that, if the objective is to increase the role of generics in Spanish healthcare, changes are necessary at three key moments: price setting, prescription in the office and dispensing at the pharmacy.
The Spanish reference price system, which forces all medicines of the same type to be sold at the same price —whether generic or brand— is seen as an obstacle. Thus, a somewhat paradoxical situation is achieved: a market at generic prices, but in which a large part of the market share is still in the hands of brand medicines. The main proposal of the experts would be to allow, at least during the first year after the end of the patent, two prices to coexist in the market: that of the generic, cheaper, and that of the brand, which could be somewhat more expensive if so. It is decided by its manufacturer.
“With this system, which is the one that countries like Germany have, health finances in all cases an amount that is close to the lowest price offered by the generic. But the door is left open for the patient, if he wants to, to pay a little more if he prefers the medicine over the brand name for loyalty or other reasons. This price difference gives the generic the possibility of differentiating itself and growing”, says Puig Junoy.
This is one of the claims that the AESEG also makes, although Miguel Martínez sees difficulties for it to be applied in Spain. “It is true that it is a common system in other countries, but here the legislation is different, with universal healthcare with equal access for the entire population. This conception fits badly with the existence of two prices for the same drug, which can be understood as one health for the rich and another for the poor”, he maintains.
From the consultation to the pharmacy
The moment of the prescription by the doctor in the consultation is the second key moment in which the administrations can help generics. The regulations in force at the national level establish that all prescriptions for acute clinical processes and the majority of chronic ones — here exceptions are made to facilitate adherence to patient treatments by avoiding changes — should be made primarily by active ingredient. But by putting this into practice, each community has promoted its own pharmaceutical policy with results that have ended up being very different.
According to data from Iqvia, there are only five communities in which the prescription by active ingredient exceeds 70% —Andalusia, Navarra, the Basque Country, Castilla y León, and the Balearic Islands—, while in another six the most common way of prescribing continues to be by brand —Valencian Community, Galicia, Asturias, Murcia, Extremadura and La Rioja—. For greater variety, in Catalonia the bet is for the direct prescription for the generic product.
This disparity is even greater at the drugstore counter, where changes in favor of brand-name drugs are frequent, according to Iqvia data. 28% of the times that the patient presents a prescription for an active ingredient to the pharmacist, ends up taking home a brand-name medicine (the other way around only happens on 11% of occasions).
The companies in the sector miss at this point the measure repealed in 2015, which forced pharmacists to dispense a generic when the patient gave them a prescription for active ingredient. “It would be a measure that would not only help the generic, but also the Spanish economy if we take into account that 70% of the drugs of this type that are sold in Spain are manufactured here,” defends Rafael Borràs.
The sector’s demand to return to a kind of positive discrimination in favor of the generic in pharmacies, however, has a difficult legal fit, according to Puig Junoy: “If both have the same price, there are no reasons to do so. It would go against the principle of free competition. It would be necessary to open before the possibility that the generic ones were differentiated by price”.
The experts consulted also lament the lack of communication campaigns aimed at the population and the medical community in favor of generics in recent years, a measure that they consider key. “The ones we saw a decade ago and that gave good results have not been made for a long time,” laments Miguel Martínez.
health campaign
The Ministry of Health has been preparing a package of measures for years, grouped into the so-called Generics and Biosimilars Plan, which it ensures that it will complete shortly after its development has been affected by the pandemic. One of its actions is a communication campaign that has been made public this Monday. “We work with the sector to reduce entry barriers for generics and biosimilars, from entry into the system, promotion of their use, prescription, and citizen awareness, including a nationwide dissemination campaign,” explains a spokesperson. The feeling in the sector, however, is that the measures contemplated are arriving late and that the procedures for developing the plan have been too long.
While waiting for problems that have been dragging on for years to be resolved, generic manufacturers are now fighting against a closer threat: the increase in costs that cannot be passed on to prices as these are regulated. According to a Teva report, production in Spain has become more expensive in the last year “by at least 10% as a result of increases of 150%, 112% and 93% in gas, electricity and water”, respectively.
Some increases that many fear may end up increasing the repeated supply problems that already occur in some molecules. The AESEG requests the Ministry of Health to authorize an “increase at least exceptionally” of 10% in the price of medicines with a price of less than 1.60 euros, which “have not been updated since 2014”, concludes Rodríguez de la String.
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