Generic medicine pricing in Europe: Current issues and future perspective

Abstract

This editorial discusses a number of trends affecting the pricing of generic medicines in Europe. With respect to pricing, recent evidence has emerged that European generic medicine manufacturers face competition from Indian manufacturers; that the price level of generic medicines varies substantially between European countries; and that generic medicine manufacturers engage in competition by discount rather than price competition in France, The Netherlands and the UK. These trends suggest that there may be scope for further reducing the prices of generic medicines in several countries. In relation to reference pricing, most European countries have incorporated market incentives within reference pricing systems with a view to promoting price competition. The European experience indicates that the generic medicines industry delivers competitive prices under a reference pricing system if demand-side policies are in place that stimulate physicians, pharmacists and patients to use generic medicines. Finally, caution needs to be exercised when focusing on the drivers of generic medicine pricing as these drivers not only vary between countries, but may also vary within a country. Manufacturers of originator and generic medicines do not take a single pricing approach following patent expiry, but vary their pricing strategy from molecule to molecule. © 2008 Informa UK Ltd.