Generic medicines contain the same active substance and have the same therapeutic effect as branded medicines. Their price is at least between 54% and 60% lower than the original price of the branded medicine. Generic medicines allow more patients to be better treated.
All over the world, generic medicines are the perfect medium to make medicines widely available to patients. They break through the patent on the branded medicine and create competition on the pharmaceutical market, causing prices to fall. Because of this, generic medicines marketed in Belgium are at least between 54% and 60% cheaper than the initial price of the corresponding branded medicines. In practice, this can sometimes be as much as 80% or more. On top of that the average price of generic medicines falls each year. Over the past 8 years this price decrease has amounted to 32% in total. In this way both the patient and healthcare insurers can make significant savings on their medicine expenditure. For the Belgian INAMI/RIZIV this amounts to more than EUR 1.7 billion per year. These resources can now be used to make more new and often very expensive therapies accessible to patients and/or to treat patients who before the entry of the generic competition on the market did not receive optimum access to existing medicines.
But there is more. Due to the competition of generic medicines, manufacturers of branded medicines are constantly encouraged to improve existing products or introduce new molecules to the market. If this incentive was lacking, the reward for innovation would be much less.
There are also more and more pharmaceutical companies who, in one way or another, are present in both the innovative and generic segment. In this context, we often talk about hybrid companies.
There are currently 265 molecules on the Belgian market for which there is a generic medicine available. Generic medicines can be used for more than 70% of treatments.
However, the use of these cost-effective medicines in Belgium is relatively limited. For example, only 37% of the medicines bought at pharmacies and refunded are generic medicines. And even if you consider the 16% of branded medicines that have lowered their price due to generic competition, the use of cheap medicines remains significantly lower than in neighbouring countries. In those countries the total percentage is easily 70% or more. This shows that there definitely is room for improvement, both for healthcare insurance as for patients.
In this context, the application of the ceiling price model, as from 1 July 2018, is a step in the right direction. This means that for each medicine for which there is a generic alternative available only the cheapest version will be reimbursed. Generic or branded pharmaceutical companies who are willing to lower their price are therefore rewarded in comparison with competitors that don’t.