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Potentials for drug savings in the generic sector - experience accross Europe"

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 e xpen s ive products

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Potentials for drug savings in the generic sector - experience accross Europe"

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  1. Potentials for drug savings in the generic sector - experience accross Europe" Per Troein Vice President Strategic Alliances IMS Health

  2. 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

  3. Affordability of health care – a Pan-European dilemma Example France NHS Deficit, € billion Cumulative deficit € 42,6 billion *: last estimate • 3

  4. 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

  5. World market growth rate continues to slide Source: IMS Health MIDAS ending MAT Q4 • 5

  6. Total Market 5 Original Brands 4 Protected Brands 12 No Longer Protected -9 Generics 10 Unprotected market Others 7 -15 -5 5 15 25 Even if generics are growing fast, original brand no longer protected is larger in top 5 Europe Value % share 73% 49% 24% 18% 9% % Growth Constant $ Source: IMS Health MIDAS; MAT Dec 2005 (preview New Midas Generic Database), top 5 EU • 6

  7. USA – Generics dominate the unprotected market volume -8% 5% -28% 11% 21% -34% Source: IMS Health MIDAS MAT1205, Generic DB (GENDB3) Ethical Market only • 7

  8. In dispensed Rx, generic erosion is usually 70-80% after 12 weeks Source: IMS National Prescription Audit • 8

  9. UK – a true generics market with high penetration and low prices -20% 1% -6% -7% 9% -4% -1% 7% Source: IMS Health MIDAS MAT1205, Generic DB (GENDB3) Ethical Market only • 9

  10. Germany- a strong generic market driven by the payer -6% 0% 7% -4% 18% 15% 10% 6% Source: IMS Health MIDAS MAT1205, Generic DB (GENDB3) Ethical Market only • 10

  11. 100% 100% 80% 80% 60% 60% % New and Switch Patients 40% 40% 20% 20% 0% 0% Jul-04 Jul-03 Jul-03 Jul-04 Apr-04 Jun-04 Apr-03 Jun-03 Jan-04 Mar-04 Jan-05 Apr-03 Jun-03 Jun-04 Mar-03 Nov-03 Feb-04 Aug-04 Nov-04 Apr-04 Jan-05 Sep-03 Sep-04 Feb-03 Aug-03 Dec-03 Dec-04 Mar-03 Jan-04 Aug-04 Nov-04 Aug-03 Oct-03 Oct-04 Feb-03 Nov-03 Mar-04 Sep-04 May-04 Dec-04 Sep-03 Feb-04 May-03 May-03 Dec-03 Oct-04 May-04 Oct-03 amlodipine diltiazem felodipine fendiline simvastatin pravastatin lovastatin fluvastatin atorvastatin gallopamil isradipine lacidipine lercanidipine nicardipine nifedipine nilvadipine nisoldipine nitrendipine verapamil Class cannibalisation has provided increased opportunities for generics in Europe Germany Generic Impact in Selected Dynamic Therapeutic Classes Statin Market Calcium Antagonist Market Source: IMS Disease Analyzer Germany • 11

  12. France – a growing generic market in its very early stages with prices still currently high -8% -5% 3% 3% 18% 26% 4% 4% Source: IMS Health MIDAS MAT1205, Generic DB (GENDB3) Ethical Market only • 12

  13. Switching to generics varies between countries and molecules Share of brand in total molecule Value, Q3 2005 SIMVASTATIN Zocor 9% 15% 50% 26% 16% 13% 56% 23% 27% 40% 32% 19% 84% 34% 24% AMLODIPINE Norvasc 51% 53% 89% 59% 62% 11% 87% 53% 100% 46% 97% 66% 99% 100% 6% OMEPRAZOLE Losec 5% 18% 48% 1% 5% 39% 13% 53% 33% 58% 51% 50% 82% 44% 3% RAMIPRIL Triatec 17% 5% 45% 89% 56% 23% 95% 28% 60% 80% 66% 46% 97% 35% 77% CITALOPRAM Cipramil 28% 10% 30% 39% 6% 50% 50% 37% 34% 84% 17% 87% 100% 37% PRAVASTATIN Pravachol 46% 35% 33% 23% 54% 34% 82% 85% 100% 76% 68% 56% 96% 55% Germany UK Italy Spain Portugal Netherlands Belgium Austria Sweden Norway Finland Denmark Ireland Greece Poland Mainly Generic Mainly Brand • 13

  14. Issues to achieve generic penetration • Drs loyal to innovator • “Franchise” relationships • “old habit” • Prescriber attitude • Pharmacist attitude • Patient attitude • Substitution right • Margin system penalise pharmacist for using cheaper drug • Available discounts • Perceptions of generics • Differentiated co-payments • 14

  15. Enalapril (10mg) Omeprazole (20mg) Simvastatin (20mg) Dec-04 Dec-04 Dec-04 AUSTRIA 0.14 0.48 0.43 CZECH REPUBLIC 0.08 0.23 0.34 FINLAND 0.05 0.72 0.14 FRANCE 0.73 GERMANY 0.14 0.79 0.34 GREECE 0.63 HUNGARY 0.60 0.38 NETHERLANDS 0.19 0.36 0.27 NORWAY 0.07 0.52 0.15 POLAND 0.32 PORTUGAL 0.69 0.55 SLOVAKIA 0.07 0.14 0.24 SPAIN 0.08 0.18 0.27 UK 0.21 0.57 0.35 Generics also show very different price levels … Official pharmacy purchase price per tablet in Euros, December 2004 • 15

  16. Increased awareness where the money ends – market price is far below Drug Tariff in UK Simvastatin Tabs 20mg/28 price development in UK DoH Intervenes £ £2.26 £0.63 Drugtariff.com April 2005; Pat exp - simvastatin 0503; • 16

  17. 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

  18. The relative savings to the healthcare system varies greatly Note: excludes government ‘clawbacks’ (important in the UK) • 18

  19. 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

  20. Physicians Suppliers Pharmacists Patients The UK achieved these savings via specific policy infrastructure Medical training PCT Prescribing Budgets • PPRS profit controls • Maximum price scheme The patient makes no savings fromgeneric prescribing Drug tariff Claw back system • 20

  21. Top 7 markets Preview The outlook – significant new molecules will go off patent in the next 5 years. Source: IMS New Generic MIDAS -Preview- Rx bound ethical market • 21

  22. 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

  23. Potentials for drug savings in the generic sector - experience accross Europe" Per Troein, IMS Health, ptroein@uk.imshealth.com

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