The use of pharmaceutical generics can increase cost-effectiveness and efficiency in health care provision and spending.
According to the recently published “Health in Ireland: Key Trends” Report, the percent share of generics has more than doubled in Ireland since 2008, while the OECD average has increased by 36.6% in the same period.
However, Ireland is still significantly below other OECD countries for use of generics.
Generic substitution was introduced by the Health Service here in 2013, with the usage of these medicines growing from 11% to 53% in the first four years thereafter. Generic drugs made up over 60% of the total off-patent medicines market in Ireland by the end of 2014. Many within the industry have been vocal about reform being essential, to maintain this momentum, warning that medicine costs for the HSE and patients will continue to increase over the period ahead unless further reforms are prioritised.
Key achievements derived from generic substitution over the period have included:
Paul Neill, Associate Director with Teva Pharmaceuticals Ireland, says it’s important to remember where Ireland started from.
“While Ireland’s use of generics has doubled since 2008 and of course this is very positive, we have to remember that Ireland was starting from an extremely low base” says Mr Neill.
“The 2013 Act helped to drive generic usage and the trajectory was upward for a number of years, this growth has plateaued over the last year or two. This leaves Ireland still way behind the best performers for generic penetration in Europe. With just under 60% generic usage in the market here, contrasted with as high as 90% uptake in other EU states, it’s clear that there remains much yet to do.
“In 2019, it feels like the reforming zeal of 2013 has been lost somewhat. However, against a background of increasing healthcare expenditure, an aging population and growing health service demands, the need to continue to drive generic uptake remains as important today as it was five years ago.”
Jeffrey Walsh is Ireland Head of Sales with Pinewood Healthcare. He believes governmental lack of priority is one of the leading reasons for Ireland’s lack of progress within this sector.
“While there has been some progress in Ireland, we are still falling behind model countries such as the UK who have almost 90% generics use” he told Irish Pharmacy News.
“Failure of the Irish Government to agree a National Pricing Agreement with the generics industry sends a message that the uptake of generic medicines is not a priority. Although legislation is still only five years old, the Government cannot be complacent. We need to keep pushing increased genericisation including the use of biosimilars over biologics which are depressing the generic uptake numbers.”
In order to counter this, encouragement of competition and a new Pricing Agreement is key.
“There needs to be dynamic market pricing that encourages competition and opens the market to multiple suppliers” he continues. “This call for a new National Pricing Agreement which sets ambitious targets for generic penetration that is on par with Europe’s best performing markets in addition to the publication and implementation of a National Biosimilar Policy.”
According to Mr Neill, a lack of agreement between the generics industry here and the Department of Health makes no sense.
“Currently there is no agreement between the generics industry here and the Department of Health. It makes no sense that the Government does have an industry agreement in place with the representatives of minority suppliers (IPHA) but none with the generics industry, the largest suppliers of medicine to the State. It is sending the wrong message in terms of the priority that is placed on the use of procuring more affordable generic medicines and, ultimately, on increasing access to medicines for patients in Ireland.”
However, the need for reform is ongoing. There are many areas of the market which remain untouched by reform and all stakeholders need to remain focussed on continuing to promote and use the most affordable but equally efficacious medicine, such as generics” adds Mr Neill.
“In my view, unless we have a constant focus on cost efficient prescribing and increasing generic penetration there will be a risk of a slow creep of medicine budget increases in the years ahead” he says.
“I feel there is now a need to look again at our medicine spend and introduce further reforms to ensure that payers do not slip into old habits of overdependence on more expensive originator medicines, whilst continuing to support generic usage.”
Medicines shortages have become a growing feature of the Irish healthcare landscape in recent years, prompting bodies such as the HPRA to now move to develop solutions to the problem.
However, industry groups such as Medicines for Ireland point out that the unsustainably low reimbursement price set by the HSE for many of these medicines is often a major driver for shortages.
Many generic medicines are now priced so low as to render them unattractive to global suppliers, who direct these products away from Ireland to higher priced markets.
Chair of Medicines for Ireland and Country Manager for Mylan, Owen McKeon adds, “Ireland has now reached a tipping point whereby the price of some generic medicines has fallen to such an extent that often a month’s supply can cost less than a bar of chocolate. This is unsustainable over the longer-term. These low-cost medicines continue to be used by tens of thousands of Irish patients but are also often most vulnerable to shortages.”
“This unsustainable pricing has made the Irish market unattractive to global suppliers, who have to factor in development, production, regulatory and staffing costs before supplying the market here.”
“Despite the fact that reference pricing and generic substitution has delivered over €1.2 billion in savings over the period of 2013 to 2018, Medicines for Ireland strongly feels that there is still more that the Government can do,” Mr McKeon continues.
Savings Potential with Biosimilars
“This involves a new National Pricing Agreement which includes the generics industry and sets targets for generic penetration, a National Biosimilar Policy to increase biosimilar uptake and more responsive pricing in the market to drive competition.”
Martin Gallagher, Director of Sales & Business Development at Clonmel Healthcare, believes that the Government are finally waking up to the potential savings that can be achieved from biosimilars.
He welcomes Professor Michael Barry’s plan, as outlined recently in the Sunday Business Post, to announce ‘in the coming weeks’ specific measures to move to better value biosimilar medicines. It is understood that the measures may include compulsory prescribing of better value biosimilar medicines over the more expensive, biologic alternatives. Professor Barry also signalled that consideration is being given to making changes to the State reimbursement system which would require GPs and hospital consultants to justify their prescribing decisions if they choose to prescribe medicines which are more expensive that the better value biosimilar alternative.
Each year the HSE spends over €280 million on the more expensive biologic medicines, despite more affordable biosimilars available on the Irish market. Biosimilar medicines represent only 6% of the total share of the market in Ireland, compared to as much as 90% in other EU states.
“Professor Barry’s remarks, as published, are encouraging. If implemented, it would finally represent changes which we and others have long been calling for,” says Mr Gallagher.
“The proposals indicated can transform medicine budgets by delivering immediate savings of significant of significant magnitude, just as changes to generic medicines did I 2013. In doing so, taxpayers get better value, and the ability to fund newer innovative medicines is enhanced.”
Tony Hynds is Managing Director with Accord Healthcare Ireland. He told us, “Publication of the Biosimilar policy, assuming it advocates biosimilar prescribing or interchangeability would make a significant reduction in Government spending of €800 million over five years, according to the IPU.”
In July of last year, The Irish Pharmacy Union (IPU) called on the Government to allow pharmacists to substitute biological medicines for biosimilars, to help plug overspending at the Department of Health. Pharmacists have clearly demonstrated that savings are available if steps are taken to address soaring spending on biological medicines but, despite concrete proposals being submitted in September 2017 by the IPU, no action has been taken.
IPU Secretary General Darragh O’Loughlin says failure to implement this proposal is costing €2 million in potential savings per week. “If the Government had heeded IPU advice when we submitted the proposal last September, approximately €80 million could have been saved to date. The IPU is presenting solutions to budget problems, but the Government continues to ignore potential savings.
“Substituting expensive biological medicines with more cost-effective biosimilars would require a legislative change, but could save the exchequer up to €800 million over five years,” said Mr O’Loughlin, who added “This is the fastest and most effective way to ensure a rapid and meaningful increase in the use of biosimilars.
“In the absence of specific steps being taken to improve biological uptake, HSE spending on biologics is expected to reach €900 million by 2020. If this amendment is made, there are potential savings of €370 million over the next three years, and up to €800 million over five years. In 2017 the Department of Health held a public consultation on a National Biosimilar Medicines Policy, and the IPU made these proposals in our submission in September 2017.
“The time to act on this is now, and we’re calling on Minister Harris to amend the Health (Pricing and Supply of Medical Goods) Act 2013 and allow pharmacists to substitute biological medicines with more cost-effective biosimilars,” adds Mr O’Loughlin.
Mr Hynds also believes one of the key reasons Ireland is still behind other OECD countries lies with the interchangeable lists.
“While the interchangeable list includes over 70 molecules, there are remarkably few additions as new molecules lose patent protection. The list should be reviewed at least quarterly to enable pharmacists to substitute newly patent expired products where generics are available,” he says.
“The Department of Health should request the HPRA assess newly patent expired molecules for inclusion in the interchangeable list post patent expiry.”
Impact of Brexit
In the event of a hard Brexit, My Hynds says the risks are considerable. He believes Brexit remains the biggest challenge to this market.
“Many products on the Irish market are manufactured, packed or tested and released in the UK. Time is needed to change these activities within the EU. In the event of a transition period being agreed, there will still be pressure on MA holders to make alternative arrangements to their supply chains to exclude the UK.
“Also, many products are pack shared with the UK and while the HPRA has indicated its willingness to support this arrangement post Brexit, the physical testing of stock for the Irish market will have to take place in the UK.
There are many unknowns at play, according to Teva’s Mr Neill. “However, what’s most important is the extent to which manufacturers, suppliers, healthcare providers and other relevant stakeholders now manage that risk,” he says.
“At Teva, we have been working hard to identify and minimise any risks that Brexit poses within our portfolio, this includes ensuring that where necessary we have additional stocks of medicines supplies in Ireland. We have also developed alternative supply routes into Ireland to reduce dependency on the UK land-bridge for the transportation of goods from mainland Europe.”
And what of the existing opportunities for generics in Ireland? “This lies in negotiating a new National Pricing Agreement with the Department of Health which increases generic usage to ‘best practice’ levels within Europe,” continues Mr McKeon.
“Equally, a biosimilar policy which sets ambitious targets on biosimilar usage. The challenge, as ever, lies in the risk posed by vested interests who continue to resist the movement of the increased usage of equally effective but more affordable generic medicines. As was the case for many years up to 2013, they will continue to resist change.”
Pinewood’s Mr Walsh says, “I hope (in the future) that it will be a mature medicines market with high levels of generic penetration where all stakeholders are fully attuned to the benefits of generics, particularly in terms of increasing patient access to life enhancing medicines and the opportunity they present to drive the affordability of such medicines for our patients and wider healthcare system.”
The future according to Mr Neill lies in working together to unlock potential. “The opportunity for further growth in generic medicines is linked to all stakeholders working to unlock barriers to further generic uptake in the Irish market. Proactive measures such as a National Pricing Agreement, a dynamic, competitive market and a sensible approach to pricing which recognises that we need a sustainable price for medicines to ensure continuity of supply in the relatively small Irish market, all are critical to strengthening the position of generics in Ireland.”
“Notwithstanding these constraints, we are hugely optimistic about our capacity to increase out footprint in the Irish market in years ahead,” he concludes.
Reproduced with permission from IPN+ magazine March 2019