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

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

3
Affordability of health care a Pan-European
dilemma
Example France
NHS Deficit, billion
Cumulative deficit 42,6 billion
last estimate
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

5
World market growth rate continues to slide
Source IMS Health MIDAS ending MAT Q4
6
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
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
8
In dispensed Rx, generic erosion is usually
70-80 after 12 weeks
Source IMS National Prescription Audit
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
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
11
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
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
13
Switching to generics varies between countries
and molecules
Share of brand in total molecule Value, Q3 2005
CITALOPRAM Cipramil 28 10 30 39 6 50 50 37
34 84 17 87 100 37
SIMVASTATIN Zocor 9 15 50 26 16 13 56 23 2
7 40 32 19 84 34 24
AMLODIPINE Norvasc 51 53 89 59 62 11 87 53
100 46 97 66 99 100 6
PRAVASTATIN Pravachol 46 35 33 23 54 34 82
85 100 76 68 56 96 55
RAMIPRIL Triatec 17 5 45 89 56 23 95 28 60
80 66 46 97 35 77
OMEPRAZOLE Losec 5 18 48 1 5 39 13 53 33
58 51 50 82 44 3
Germany UK Italy Spain Portugal Netherlands Belgiu
m Austria Sweden Norway Finland Denmark Ireland Gr
eece Poland
Mainly Generic Mainly Brand
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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

15
Generics also show very different price levels
Official pharmacy purchase price per tablet in
Euros, December 2004
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
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
18
The relative savings to the healthcare system
varies greatly
Note excludes government clawbacks (important
in the UK)
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

20
The UK achieved these savings via specific policy
infrastructure

• PPRS profit controls
• Maximum price scheme

Medical training PCT Prescribing Budgets
The patient makes no savings fromgeneric
prescribing
Drug tariff Claw back system
21
The outlook significant new molecules will go
off patent in the next 5 years.
Top 7 markets
Preview
Source IMS New Generic MIDAS -Preview- Rx bound
ethical market
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

23
Potentials for drug savings in the generic sector
- experience accross Europe"

• Per Troein, IMS Health, ptroein_at_uk.imshealth.com