Competition from off-patent medicines has been key to expanding patients’ access to medicines and improving healthcare system sustainability in Europe. Unfortunately, the availability of off-patent medicines is threatened by current pricing, reimbursement and procurement policies that don’t allow off-patent medicine prices to adjust amid unprecedented spikes in cost of goods. With production costs rising and no avenue to adjust prices to cover these increase costs, access can be put at risk. This could lead to medicine shortages, entirely preventable by policy changes. Urgent action is needed to protect the availability of essential medicines for patients across Europe by ensuring the viability of the off-patent sector.

The Value of Off-Patent Medicines

Off-patent medicines are key drivers for patient access for European patients. When patents expire on novel medicine products, generic versions can enter the market, where competition drives down prices and reduces costs to healthcare systems immediately.

70%

of prescribed medicines in Europe are generic.1

30%

of pharmaceutical expenditure is for generics.1

2x

Generics have doubled patient access to certain treatments across Europe over the last decade.1

Barriers to a Sustainable Market for Off-Patent Medicines

Off-patent medicines face unique market dynamics. While other goods, such as food products or fuel, can adjust prices upwards to accommodate increases in costs of production due to supply chain constraints or inflation, off-patent medicines rarely have such an option. In most markets, price regulation of off-patent medicines does not allow companies to adjust prices. With no way to cover the additional costs, the off-patent market is uniquely vulnerable to inflation and higher prices for production inputs.

Rising Costs and Static Prices

The repercussions of the COVID-19 pandemic and the war in Ukraine have pushed production costs to unprecedented new highs, creating an immediate threat to the viability of off-patent medicines.

1. Eurostat
2. Eurostat
3. The Pharma Letter
4. Bizz Buzz
5. European Commission
6. EGF International

The Risk of Reduced Patient Access

Increased costs combined with price pressures may threaten patients’ access to essential medicines. Under these conditions, manufacturers may be forced to temporarily, or in some cases permanently take medicines off the market, leaving fewer or no suppliers of the affected products. Already in the last year, manufacturers have needed to withdraw one in five off-patent medicine products from the market in Belgium.

Policy Action to Protect Access to Essential Medicines

Policy changes that enable more nimble pricing, reimbursement and procurement models for off-patent medicines, accommodating current inflation levels, may help alleviate the risk of further medicine shortages. The off-patent medicines industry is encouraging policymakers to exclude off-patent medicines from price cutting measures, including claw-backs, external reference pricing, and other mechanisms that compromise the economic viability of medicines and therefore limit patient access.

Politico: Protecting patients’ access to affordable medicines as inflation bites

Inflation is threatening Europe’s medicines supplies. This is a major concern for the off-patent sector, which is experiencing unprecedented cost pressures.

1. Medicines for Europe