Potentials for drug savings in the generic sector
- experience accross Europe"
Per Troein
Vice President Strategic Alliances
IMS Health
Innovation brings value to healthcare – but drives
drug cost!
• Drug cost increases for several reasons;
• New, innovative, but more expensive products
• Treating previously untreated conditions
• Increases life expecancy  volume
•
2
Affordability of health care – a Pan-European
dilemma
Example France
NHS Deficit, € billion
12
Cumulative
deficit
€ 42,6 billion
10
8
6
4
2
0
2001
2002
2003
2004
2005
*: last estimate
•
3
Potential for savings using generics
• One option for savings are utilizing generics – or more specific
- to save after patent experations.
• The temting reasoning is;
• A long list of quite efficient drugs has gone/ is going of patent
• They are known entities; both efficacy and side effects
• Potential for very compeling price
•
4
World market growth rate continues to slide
20%
18%
500
16%
14%
400
12%
300
10%
8%
200
6%
4%
100
2%
0
0%
2001
World
2002
World
Source: IMS Health MIDAS ending MAT Q4
•
5
2003
North America
2004
Europe
2005
Japan R&H
% GROWTH CONSTANT DOLLAR
SALES IN $BILLION, CONSTANT
DOLLAR
600
Even if generics are growing fast, original brand no
longer protected is larger in top 5 Europe
Value
Total Market
% share
5
Original Brands
4
73%
Protected Brands
No Longer Protected
12
-9
24%
Generics
18%
10
Others
-15
Unprotected market
7
-5
5
9%
15
% Growth Constant $
Source: IMS Health MIDAS; MAT Dec 2005 (preview New Midas Generic Database), top 5 EU
•
6
49%
25
USA – Generics dominate the unprotected
market volume
Volume SU MIL
Value LCD MNF MIL
35000
140000
30000
120000
25000
5%
-28%
100000
20000
80000
15000
60000
21%
10000
5000
40000
20000
11%
-34%
No longer prot
brands
No longer prot brands
Unbranded
No Longer prot
Generic
brands
No Longer prot brands
Unbranded
Company Branded
Branded Generics
Company Branded
Generic
Source: IMS Health MIDAS MAT1205, Generic DB (GENDB3) Ethical Market only
•
7
-8%
Branded Generics
In dispensed Rx, generic erosion is usually 7080% after 12 weeks
BRAND SHARE OF MOL RXs
100%
75%
50%
25%
0%
W0
W5
W10 W15 W20 W25 W30 W35 W40 W45 W50 W55
Glucophage
Pepcid
Zestoretic + Prinzide
Augmentin
Duragesic
Synthroid
Allegra
Source: IMS National Prescription Audit
•
8
Prozac
Mevacor
Prilosec
Paxil
Neurontin
Rocephin
UK – a true generics market with high
penetration and low prices
Volume SU MIL
Value LCD MNF MIL
4500
30000
-20%
4000
-6%
3500
9%
3000
-7%
20000
-4%
2500
15000
2000
-1%
1500
1000
10000
7%
5000
500
No longer prot
brands
No longer prot brands
Unbranded
No Longer prot
Generic
brands
No Longer prot brands
Unbranded
Company Branded
Branded Generics
Company Branded
Generic
Source: IMS Health MIDAS MAT1205, Generic DB (GENDB3) Ethical Market only
•
9
1%
25000
Branded Generics
Germany- a strong generic market driven by
the payer
Value LCD MNF MIL
Volume SU MIL
7000
6000
30000
-6%
25000
7%
5000
4000
15000
3000
18%
2000
-4%
15%
10000
5000
1000
10%
6%
No longer prot
brands
No longer prot brands
Unbranded
No Longer prot
Generic
brands
No Longer prot brands
Unbranded
Company Branded
Branded Generics
Company Branded
Generic
Source: IMS Health MIDAS MAT1205, Generic DB (GENDB3) Ethical Market only
•
10
0%
20000
Branded Generics
Class cannibalisation has provided increased
opportunities for generics in Europe
Germany Generic Impact in Selected Dynamic Therapeutic Classes
simvastatin
pravastatin
lovastatin
Source: IMS Disease Analyzer Germany
•
11
fluvastatin
atorvastatin
amlodipine
gallopamil
nicardipine
nitrendipine
diltiazem
isradipine
nifedipine
verapamil
felodipine
lacidipine
nilvadipine
Jan-05
Dec-04
Oct-04
Nov-04
Sep-04
Aug-04
Jun-04
Jul-04
Apr-04
May-04
Mar-04
Jan-04
Feb-04
Dec-03
Oct-03
Nov-03
Sep-03
Jul-03
Aug-03
Jun-03
Apr-03
May-03
Mar-03
Jan-05
Dec-04
Oct-04
Nov-04
Sep-04
Aug-04
Jul-04
Jun-04
Apr-04
May-04
Mar-04
Feb-04
Jan-04
0%
Dec-03
0%
Oct-03
20%
Nov-03
20%
Sep-03
40%
Jul-03
40%
Aug-03
60%
Jun-03
60%
Apr-03
80%
May-03
80%
Mar-03
100%
Feb-03
Calcium Antagonist Market
100%
Feb-03
% New and Switch Patients
Statin Market
fendiline
lercanidipine
nisoldipine
France – a growing generic market in its very
early stages with prices still currently high
Value LCD MNF MIL
Volume SU MIL
7000
6000
35000
-8%
30000
5000
25000
4000
20000
3000
15000
3%
2000
26%
1000
-5%
3%
10000
18%
5000
4%
4%
No longer prot
brands
No longer prot brands
Unbranded
No Longer prot
Generic
brands
No Longer prot brands
Unbranded
Company Branded
Branded Generics
Company Branded
Generic
Source: IMS Health MIDAS MAT1205, Generic DB (GENDB3) Ethical Market only
•
12
Branded Generics
Switching to generics varies between countries and
molecules
Share of brand in total molecule Value, Q3 2005
SIMVASTATIN
AMLODIPINE
OMEPRAZOLE
RAMIPRIL
CITALOPRAM
PRAVASTATIN
Zocor
Norvasc
Losec
Triatec
Cipramil
Pravachol
9%
51%
5%
17%
28%
46%
UK
15%
53%
18%
5%
10%
35%
Italy
50%
89%
48%
45%
30%
33%
Spain
26%
59%
1%
89%
39%
23%
Portugal
16%
62%
5%
56%
Netherlands
13%
11%
39%
23%
6%
34%
Belgium
56%
87%
13%
95%
50%
82%
Austria
23%
53%
53%
28%
50%
85%
Sweden
27%
100%
33%
60%
37%
100%
Norway
40%
46%
58%
80%
34%
76%
Finland
32%
97%
51%
66%
84%
68%
Denmark
19%
66%
50%
46%
17%
56%
Ireland
84%
99%
82%
97%
87%
96%
Greece
34%
100%
44%
35%
100%
55%
Poland
24%
6%
3%
77%
37%
Germany
Mainly Generic
•
13
54%
Mainly Brand
Issues to achieve generic penetration
• Prescriber attitude
• Drs loyal to innovator
• “Franchise” relationships
• “old habit”
• Pharmacist attitude
• Substitution right
• Margin system penalise pharmacist
for using cheaper drug
• Available discounts
• Patient attitude
• Perceptions of generics
• Differentiated co-payments
•
14
Generics also show very different price levels …
AUSTRIA
CZECH REPUBLIC
FINLAND
FRANCE
GERMANY
GREECE
HUNGARY
NETHERLANDS
NORWAY
POLAND
PORTUGAL
SLOVAKIA
SPAIN
UK
Enalapril (10mg)
Omeprazole (20mg)
Simvastatin (20mg)
Dec-04
Dec-04
Dec-04
0.14
0.08
0.05
0.48
0.23
0.72
0.73
0.79
0.43
0.34
0.14
0.14
0.19
0.07
0.07
0.08
0.21
0.60
0.36
0.52
0.32
0.69
0.14
0.18
0.57
Official pharmacy purchase price per tablet in Euros, December 2004
•
15
0.34
0.63
0.38
0.27
0.15
0.55
0.24
0.27
0.35
Increased awareness where the money ends
– market price is far below Drug Tariff in UK
Simvastatin Tabs 20mg/28 price development in UK
35.00
£
DoH
Intervenes
30.00
25.00
20.00
15.00
10.00
5.00
£2.26
0.00
M J J A S O N D J F M A M J J A S O N D J F M A
Drug Tariff
Market Price
Drugtariff.com April 2005; Pat exp - simvastatin 0503;
•
16
£0.63
The power of discounts
Discounts are as important as dispensing fees
 Dispensing fee
€ 657k
 Discounts
€ 794k
 brands
8%
 parallel import
21%
 generics
75%
Source; A Dutch pharmacy, actual 2004 result
•
17
The relative savings to the healthcare system varies greatly
Total Savings
78% saved
Total Spend
66% saved
65% saved
65% saved
59% saved
54% saved
53% saved
51% saved
Denmark
Netherlands
Norway
Germany
Spain
Belgium
UK
Sweden
Brand Spend
Generic Spend
Savings due to brand price
Note: excludes government ‘clawbacks’ (important in the UK)
•
18
Savings due to generic entry
Countries are using different generics strategies due
to differences in circumstances
• Company branded with limited substitution - Germany
• Generic companies selling to doctors
• Some discounting to pharmacists – to be outlawed from 1 April
• INN branded with full substitution – UK
• Doctors prescribes substance – not manufacturer
• One reimbursement price
• Pharmacist encourage to buy cheapest
• Payer benefit on “discounts” by claw-backs
• INN branded with full substitution – Sw, N version
• Pharmacy obliged to dispense cheapest available
•
19
The UK achieved these savings via specific policy
infrastructure
Medical training
PPRS profit controls
PCT Prescribing Budgets
Maximum price scheme
Physicians
Suppliers
Pharmacists
Patients
Drug tariff
Claw back system
•
20
The patient makes no savings from
generic prescribing
Top 7 markets
Preview
90
80
70
60
50
40
30
20
10
0
60,000
50,000
40,000
30,000
20,000
10,000
Ca
r
Re
CN
sp
S
An
ira
tito
in
ry
fe
ct
Ar
Ga
iv
th
es
rit
st
ro
i
-m s/ P
ai
et
n
ab
ol
Im
is
m
m
un
Ca
e
nc
Re
er
sp
on
s
As e
th
m
a
Er
O
yp
st
eo
os
po
ro
sis
O
ra
HI
lD
V
ia
be
te
s
0
Source: IMS New Generic MIDAS -Preview- Rx bound ethical market
•
21
% share expiring 2006-11
% sales share expiring 06-11
Protected Sales in 2005
di
o
Protected sales in 2005 (US$)
The outlook – significant new molecules will go off
patent in the next 5 years.
Summary
• Generics can free up money to spend on new innovative drugs
• Clear strategy for how to drive penetration essential
• Penetration has to be balanced with gaining price savings
• Low cost manufacturing in eastern-Europe, India, and China
likely future supply
•
22
Potentials for drug savings in the generic sector
- experience accross Europe"
Per Troein, IMS Health, ptroein@uk.imshealth.com