Economic data
 
 
No generics without originals

A few notes by SAFS on the original drug development costs.

Considering prices of original drugs it is necessary to realise that although the economic aspect of this issue is very important, we always have to study patient's needs firstly.

Registration of a new original molecule in Slovakia makes it easier for generic drugs to penetrate the market. According to the Law on drug, generic drugs are no longer patent-protected and comparing to their original they have the same quantitative and qualitative structure and equivalent drug form. Moreover, they need to be biologically equivalent - bioequivalent. According to the EU legislation, which has already been implemented to the Slovak Law on drug, generic drugs can be registered in Slovakia using referenced application (application with a reference to the original drug). If patent protection of the original drug and vested data protection period have expired, it is not necessary for the generic industry to submit part II. (toxicological and pharmacological testing) and part IV. (clinical testing) with the reference to the original drug registered in Slovakia.

Quality of domestic as well as imported drugs is guaranteed by the State institute for Drug Control. The Institute examines samples submitted by the producer and occasionally it also controls their batches. As a result, the production costs of generics are exceptionally lower. Generic producer does not have to invest neither into research and development nor into subsequent drug safety monitoring. There is no need for him to make any pre-clinical or clinical research. He is usually seeking an alternative for original substance synthesis and afterwards he begins to produce it. In some cases he only purchases raw material from a different producer and from that he produces a particular drug form. In the registration process he may use the outcomes of clinical testing conducted by original producer and on the local market also the findings of its marketing department. Generic drug enters a "built market" without risk of non-using the molecule.

According to the renowned centres dealing with drug R&D cost analysis, the price of one new molecule that reaches the phase of market entrance has risen. While in 1997 its value was 459 million USD (Myers&Howe), in 2001 the price was 802 million USD (Tufts Center for the Study of Drug Development). This intense growth of inevitable investments, of course, results into increased market prices of innovative drugs.

An important aspect with generic drugs launching is drug cost of the healthcare system. The truth is that generics are from obvious reasons less expensive. But recent analyses show that in countries where prescription of generics has reached a higher market share, the prices of these drugs have increased too (E.g. Great Britain).

In negotiations with price committee, Ministry of Finance, in Slovakia, generic producers are suggesting prices higher or equivalent to the prices of originals. This is not common neither logic. The main reason for launching generics should be price substantially lower in comparison with originals.

We have to note that the starting point in Slovakia in 1989 was 100% generic market and foreign medicines unavailable for the most of the population. An optimist sees a bottle half-full, while a pessimist calls it half-empty. That's how we can describe changes, which took place in the next period. We understand this development as positive, because patients can now have drugs which are corresponding the therapy level in the outer world.

Western countries promote these days strategies for generics launching. The contribution of these drugs to overall consumption is around 20% in terms of value (IMS 2000). In Slovakia it reached 46% (IMS 2001). This expression can be easily influenced by the methodology used. According to a SAFS study, in which we have calculated consumption of "pure originals" (originals that have no generic substitute) in DDD - Daily Defined Doses. In second trimester 2001 the overall drug consumption consisted of 65% generics and 35% originals, from which only 25% have no generic substitute.