The impact on health outcome measures of switching to generic medicines consequent to reference pricing: The case of olanzapine in New Zealand

Abstract

INTRODUCTION: New Zealand’s Pharmaceutical Management Agency (PHARMAC) manages the list of medicines available for prescribing with government subsidy, within a fixed annual medicines budget. PHARMAC achieves this through a mix of pricing strategies including reference pricing. In 2011, PHARMAC applied generic reference pricing to olanzapine tablets. AIM: This study sought to evaluate change in outcome measures of patients switching from originator to generic olanzapine consequent to the introduction of the policy. METHODS: A retrospective study using national health data collections was conducted. Outcome measures included medicines indicators (change in dosage, concomitant therapy and treatment cessation), health care service indicators (use of emergency departments, hospitals and specialist services), surveillance reports of adverse events, and mortality. RESULTS: Subsequent to the removal of funding for originator brand olanzapine tablets, 99.7% of patients meeting the inclusion criteria switched to using generic olanzapine. Limited case reports of suspected therapeutic loss were received in the study time period. No increase in use of additional oral or injectable antipsychotic medication was observed after switching, nor any increase in other unique, non-antipsychotic prescription items. However, a high incidence of multiple switching between available brands was found. No net impact of switching brands on health service utilisation or mortality was found. DISCUSSION: The study shows that a switch can be made safely from originator olanzapine to a generic brand, and suggests that switching to generics should generally be viewed more positively. Generic reference pricing achieves considerable savings and, as a pricing policy, could be applied more widely.