Generics to save France Euro 4.6bn by 2010, says study

The use of generic medicines in France will produce savings of Euro 4.6bn between 2007 and 2010, according to a study by health economist Claude Le Pen.

The study was funded and carried out in co-operation with the French arm of generics manufacturer Ratiopharm.

Le Pen had carried out a first study for Ratiopharm in 2004 on savings expected from generics in 2004-8. This study had concluded that increased use of generics was likely to lead to savings of between €4.1bn and €5.3bn over this period.

Retrospective analysis for 2004-6 half way through the study showed these annual savings had materialised, said Le Pen. Savings over these three years had in fact reached €3.2bn, which is even more than than the €2.46bn savings projected for this period. 'The penetration rate [for off-patent and generic drugs] has been lower than we expected, but this has been compensated by price decreases' under the French medicines plan,' he explained.

The second study uses the same methodology, pricing generics at 40% less than patented drugs and applying a 73% average health insurance reimbursement rate.

Le Pen said that 2003-6 had been very fruitful in terms of medicines patent expiry. The 20 highest-selling drugs that lost their patents had accounted for retail sales worth €2.22bn in 2002. But he claims that there is still great potential in the next few years, with 64 more drugs going off-patent: 19 in 2007, including lansoprazole and amlodipine; 12 in 2008; 14 in 2009, including esomeprazole and pantoprazole; and 19 in 2010, of which one is anastrozole.

Of the projected €4.6bn savings, 40% will come from new patent expiries, €2.8bn from increasing penetration of generics in the off-patent market and €1.9bn from new generic medicines, Le Pen said.

He explained that the slowness of the increase in the generic substitution rate has been partly compensated for in several departements (administrative areas) by the implementation of a policy whereby patients refusing generic substitution have to pay the full price of pharmacy medicines up-front, rather than just the obligatory, non-reimbursable copayment (tiers payant).

But a 100% generic substitution rate would be both impossible and undesirable, he added, as it would put an end to competition between patented and generic medicines. He noted that no country has a substitution rate above 85-90%.