WHO Essential Drugs Strategy

1
Access to Generic Pharmaceuticals
Dr Jonathan D. Quick, Director Essential Drugs
and Medicines Policy - EDM Health Technology and
Pharmaceuticals Cluster - HTP World Health
Organization June, 2002
2
The worldwide role of generic pharmaceuticals
Price-lowering competition
Global generic market
National strategies
3
The worldwide role of generic pharmaceuticals
Global generic market
4
In poor countries drugs are largest household and
second largest public expenditure for health
Price-lowering competition
Pharmaceutical spending, as of total health
spending
Greece
Germany
Developed countries
Italy
(7 - 20)
France
Spain
Denmark
UK
United States
Netherlands
Norway
Bulgaria
Transitional countries
Czech Rep.
(15 - 30)
Hungary
Croatia
Poland
Estonia
Slovenia
Lithuania
Mali
Egypt
China
Indonesia
Thailand
Developing countries
Tunisia
Jordan
(24 - 66 )
Argentina
South Africa
0
10
20
30
40
50
60
70
5
Competition is perhaps the single most powerful
policy instrument for lowering medicine prices
Price-lowering competition

• USA - when patent expires the average wholesale
  price falls to
• 60 of the branded drugs price with 1 generic
  competitor
• 29 with 10 competitors

6
Price differentials between generic and brand
products vary greatly among countries
Global generic market

• Belgium
• Italy
• Spain
• Germany
• France
• Canada
• UK
• US

• 20
• 20
• 25
• 25 - 30
• 25 - 35
• 40 - 50
• 80
• 50 - 90

Source IMS, Pharma Strategy Group
7
Contraceptive price reductions through UNFPA
procurement practices
8
Competition is highly effective in reducing
prices - the example of antiretrovirals
Pharmaceuticals and trade
Source UNAIDS, B. Samb, 2000
9
Advocacy, corporate responsiveness, competition
have reduced antiretroviral prices 95 in 3 years
Price-lowering competition
??
10
The worldwide role of generic pharmaceuticals
Price-lowering competition
11
As of the mid-1990s, few countries had achieved
large generic coverage
Global generic market
DEVELOPED COUNTRIES
Source DAP Global comparative pharmaceutical
expenditures and IGPA
12
Drug sales 1990 and 2000 originator/licensed
products and unbranded/other brand generics
Generics 30 of global market
Source IMS Health, customised study. Data from
52 countries/areas
13
Against the trend - Pakistan 1990 and 2000
growth of other than originator brands
14
Rapidly changing drugs markets (1) Republic of
Korea, 1990 and 2000
2000 Population 46.7 million
15
Rapidly changing drugs markets (2) Hungary, 1990
and 2000
2000 Population 9.9 million
16
Rapidly changing drugs markets (3) Czech
Republic, 1990 and 2000
2000 Population 10.3 million
17
Generic shares (unbranded plus other brands) in
high, middle and low income markets, 1990 and 2000
Low
Middle
High
18
Global generics picture 1990 to 2000
Global generic market

• 1. Definition generics off-patent
  non-innovator drugs
• About 30 of world sales by value
• Unbranded generics - about 10 of world sales
• Commercial literature understates the share of
  generics by only looking at 2.
• 2. Declining share of generics in the high income
  countries over the last decade
• 3. Generics now dominant in markets of low income
  countries
• 4. Very rapid move away from generics to
  innovator drugs in some markets (C E Europe,
  Former Soviet Union, Korea)

19
Local pharmaceutical production capacity varies
greatly among countries
Unavailable
(23)
Sophisticated industry, significant research
(10)
Innovative capability
(17)
Active ingredients finished products
(13)
Finished products from imported ingredients
(84)
No pharmaceutical industry
(42)
Source UNIDO The world's pharmaceutical
industries. an international perspective on
innovation , competition and policy. 1992
20
The worldwide role of generic pharmaceuticals
Price-lowering competition
21
Building a large generic market takes time- and
requires a combination of strategies
National strategies
National strategies for generics 1. Supportive
legislation regulation 2. Reliable quality
assurance 3. Professional, public acceptance 4.
Economic incentives
Percent of new prescriptions, U.S.
22
1. Supportive legislation and regulation
National strategies

• product development authorized during patent life
• abbreviated marketing authorization
• differential registration fees
• generic labeling
• generic prescribing and substitution

23
Product development during patent period varies
among countries
National strategies

• Examples of early workings for generics
• access to innovator product safety and efficacy
  data
• production tests on a patent-protected product
• laboratory tests for marketing approval
• e.g. bioequivalence
• production and stockpiling prior to patent expiry
• Countries with some early workings provisions
• Argentina ? Hungary
• Australia ? Israel
• Canada ? USA

24
Source of market power for branded product

• Market exclusivity
• patents
• data protection - ethics
• sui generis - orphan drugs, paediatric
  indications
• new types of patents - use structure
• Trademarks
• Perceived quality
• Promotion
• Service

25
2. Reliable quality assurance
National strategies

• substitution / non-substitution lists
• national quality assurance capacity
• enforcement of good manufacturing practices (GMP)
• distribution system inspection and enforcement

26
3. Professional and public acceptance
National strategies

• involvement of professional groups
• phased implementation
• all training by generic name
• use of generic names in clinical manuals
• treatment guidelines
• brand-generic / generic-brand indexes
• public promotional information and activities

27
Stages in Generic Substitution - legislative
support for generic substitution may evolve over
time
National strategies

• 1. No substitution
• 2. Substitution permitted
• brand dispensing assumed
• generic may be requested
• 3. Substitution encouraged
• generic dispensing assumed
• brand may be requested
• 4. Substitution required

Increasing generic support
28
Generic substitution laws can give each party a
voice
National strategies

• Regulatory authority
• may declare products as substitutable or
  non-substitutable
• Prescriber
• may write no substitution by hand on the
  prescription
• Pharmacist - must substitute a generic unless
• prescriber or patient forbid substitution
• retail price of generic is higher than the brand
• product has been declared not substitutable
• Patient
• may forbid generic substitution by the pharmacist

29
Pocket manuals put generic names and
brand-generic lists at health professionals
figure-tips
National strategies
? 100 countries have treatment guidelines,
formularies
30
Public education campaigns help professional and
public acceptance to reinforce each other
National strategies

• Posters and brochures
• Radio and TV messages
• Folk media

31
4. Economic incentives
National strategies

• price information for professionals and the
  public
• retail margins favorable to generics
• use of generics for insurers / reimbursement
• development of generic industry

32
Indicative price information promotestransparency
and competition

• MSH-WHO essential drugs price indicator
• Drugs and diagnostics for HIV/AIDS
• Pharmaceutical starting materials
• Antiretroviral drugs in the Americas
• AFRO Essential drugs

http//www.who.int/medicines/organization/par/ipc/
drugpriceinfo.shtml
33
Price information - enlightens health
professionals and empowers consumers
National strategies

• drug pricing guide
• Colombia WHO ? MoH ? manufacturers association
• publication of pricing surveys
• Philippines, Georgia

• relative / absolute price information in clinical
  manuals

34
Different types of dispensing margins create
different incentives for rational dispensing
National strategies

• Cost fixed percentage
• EG cost to pharmacist 20
• Cost declining percentage
• EG cost 20 for cheaper drugs, declining to 5
  for expensive drugs
• Cost fixed dispensing fee
• EG cost 3 professional dispensing fee
• Cost differential dispensing fee
• cost 4 for generic drugs, 2 for brand name
  drugs

35
Insurance coverage is everywhere rising - generic
essential drugs are needed for cost control
National strategies
Each diamond represents of population covered
in one country Source WHO/DAP Global
pharmaceutical expenditures
36
National strategies for promoting use of
generic essential drugs
National strategies

• 1. Supportive legislation and regulation
• 2. Reliable quality assurance
• 3. Professional and public acceptance
• 4. Economic incentives

37
Some WHO tools to support generic drugs
National strategies

• Normative support
• International Non-propriety Names (INN)
• International Pharmacopoeia
• guidelines for stability testing
• Generically-oriented drug information
• model list of essential drugs
• model prescribing information
• model formulary of essential drugs
• Regulatory support
• WHO support for generic industry in ICH
• manual on marketing authorization
• comparator product system

38
What can be done to increase acces to generic
pharmaceuticals?
Conclusion
Price-lowering competition - better document
magnitude and sources of cost/price savings
Global generic market - analysis of trends and
reasons for high and low generic markets
National strategies - attack all 4 critical
elements - legislation, quality, acceptance,
incentives