1、White PaperBeneath the Surface:Unravelling the True Value of Generic Medicines April 2024PER TROEIN,Vice President,Strategic Partners,IQVIA MAX NEWTON,Engagement Manager,Strategic Partners(GS&AR),IQVIA MARCO TRAVAGLIO,Consultant,Global Supplier&Association Relations,IQVIA KELSEY STODDART,Consultant,

2、Global Supplier&Association Relations,IQVIA2|Beneath the Surface:Unravelling the True Value of Generic Medicines European PerspectivesTable of contentsExecutive summary 1 Introduction 2Generic medicines support predictable and sustainable pharmaceutical spending 5Generic medicines continue to delive

3、r savings long after loss of exclusivity 5Large opportunities for cost savings can be expected 5Generic entry contributes to reducing overall co-payments 6Generic medicines are key access catalysts 8Generic medicines doubled access in chronic disease areas 8Access benefits differ based on therapeuti

4、c category and market dynamics 8Generic medicines help to reduce disease burden in underserved markets 11Generic medicines have an important role to play in future health outcomes 12Generic medicines support supply chain resilience 12Multisource generic products mitigate the impact of shortages 129

5、In 10 critical medicines are generic medicines 13After loss of exclusivity,generic medicines are often the only option 14Generic manufacturers continue to invest in europe 15The off-patent sector supports innovation 17VAMs directly offer a range of unique benefits to patients 17Generic companies are

6、 progressing environmentally sustainable practices 18Generic savings cycle continues innovation 18Challenges and long-term outlook 19References 20About the authors 22 |1 |1Today,generic medicines are an integral part of the healthcare system and demand for these products continues to rise.However,wh

7、ile increased usage of generic medicines has led to unprecedented savings for healthcare systems,perspectives often remain focused solely on their cost-saving potential.This can underplay the societal value of generic medicines in Europe and underestimate their contributions,compounding the challeng

8、es that healthcare systems are facing today.This report explores the broad spectrum of contributions from generic medicines to European health systems,through an examination of their savings potential but also their role in supporting financial sustainability,increasing patient access,supply chain r

9、esilience,and better outcomes for patients.Although 70%of all medicines sold in Europe(by volume)are generics,the added societal value of these medicines beyond their cost-saving benefits has not often been discussed.This study aims to quantify generic medicines past contributions and future role,hi

10、ghlighting implications for all stakeholders in a time of increased demand and constraints on healthcare systems.While the results show the benefits that a sustainable generic sector can provide to country healthcare systems through savings,it also focuses on areas for improvement.Opportunities to i

11、mprove patient access remain,new therapeutic options are expected to provide a level of innovation that will improve health outcomes,and as Europes priorities change,the role in supporting supply chain resilience and continued investments by generic manufacturers show systems cannot be viewed in iso

12、lation.This report has been prepared by IQVIA at the request of Medicines for Europe with support from the Generic Medicines Group(a Medicines for Europe sector group).IQVIA gratefully acknowledges contributions from colleagues,Doug Long,Aurelio Arias,Michael Kleinrock,Shirley Tang,Jose Gonzalez and

13、 many others at IQVIA without whom this study would not have been possible.Executive summary70%OF ALL EUROPEAN MEDICINESAlthough 70%of all medicines sold in Europe(by volume)are generics,the added societal value of these medicines beyond their cost-saving benefits has not often been discussed.2|Bene

14、ath the Surface:Unravelling the True Value of Generic Medicines European PerspectivesExhibit 1:European generic market overviewSource:IQVIA MIDAS Q3 MAT 2023.Chart notes:INN insights(excl.vaccines,Inn insights not assigned,hospital solutions,diagnostics and ATC V products).Volume=standard units.Data

15、 is in LC(inflation adjusted)and includes hospital and retail panels.Rx only;Total biologic growth includes biosimilars.European geographic scope(includes Norway,UK,and Switzerland).Top 10 therapeutic area ordered by value(LCEUR).IntroductionGeneric medicines represent the majority of treatments in

16、Europe,accounting for 70%of treatment volume and 19%of the market value in 2023(Exhibit 1).Generic molecules are increasingly available for complex chronic conditions,reflecting the profile of originator molecules losing protection,and represent 60%of the top 10 therapeutic areas in Europe.At list p

17、rices(excluding confidential discounts and rebates),the generic medicine spending growth rate has recovered since dropping to its lowest levels in almost a decade in 2021(2%),reflecting European markets policies focused on savings.This recent shift comes after a series of challenging years,and altho

18、ugh the market appears to be benefiting from growth in the short-term,the benefits of generic medicines to European healthcare systems longer-term are not a foregone conclusion.The role of the generic industry has undergone an evolution in the past decades.Since the industrys inception in the 1980s,

19、the US was seen as the most attractive location for generic manufacturers,due to progressive regulatory frameworks and the need for mitigating high brand prices.By contrast,market fragmentation,comparably lower brand prices,complex intellectual property(IP)and regulatory systems limited the European

20、 market.Between the 1980s and the early 2000s,slow growth rates combined with limited government incentives shaped the view of these medicines as opportunists,eroding the market share of incumbent manufacturers of branded products.1 As a result,generic market growth in Europe lagged behind the US,cr

21、eating few opportunities for savings.70%20%10%0%OncologicsAntidiabeticsAntithromboticsImmunosuppressantsImmunologyAntihypertensivesRespiratory agentsPainMultiple SclerosisMental healthTop 10 generic average:60%Non-genericBiologicsTotal marketGenericsBiosimilarsSmall molsGenericNon-genericGeneric2019

22、20202021202220232019202020212022202320192020202120222023*(Q3 MAT)Volume share of the generics market(SU)Value share of the generics market(%total)67%68%68%69%70%70%70%45%37%82%76%33%82%18%81%30%30%55%63%18%24%67%18%82%19%33%32%32%31%30%20%20%19%19%19%80%80%81%81%81%Volume share of top 10 therapeutic

23、 areasYear-over-year spending growth(EU)|3Exhibit 2:Evolution of perspectives around generic medicines consumption in EuropeIIn the following decade,extensive reforms in EU Member States and the large volume of products facing loss of exclusivity,including several blockbuster products,changed the ro

24、le of generic medicines.Until 2005,Member States operated different periods of data protection,creating uncertainty for generic manufacturers.Exclusivity rules changed in 2005 when the EU pharmaceutical legislation harmonized regulatory protection for all Member States,paving the way for increased g

25、eneric penetration in Europe.A report published by the European Commission in 2009 shows that although Member States accrued their benefits differently,between 2000 and 2007 average prices in Europe fell by 20%one year after loss of exclusivity(LoE)and 40%after two years2,a relatively modest figure

26、compared to recent times(60%iii).Notably,these figures do not account for confidential discounts and rebates,meaning that the actual prices were likely to be even lower.Regardless,before the financial crisis,generic medicines were seen as key sources of cost savings,contributing to significantly hig

27、her access for patients.Following the financial crisis(2007-2009),many European countries introduced new austerity programs that included expanding the use of generic drugs as a way to keep budgets under control.During this time,generic medicines were often viewed as commodities to describe a market

28、 with large numbers of buyers and sellers,and with prices approximating the cost of production and distribution.Commoditization,combined with policy reforms in both regulated and unregulated markets,further increased generic usage,and thus savings,in Europe.Estimates suggest that spending on medicin

29、es in 2014 was 100 billion less than it would have been if prices had not been lowered with the introduction of generics.3 Today,the value of generic medicines continues to be centred on affordability and access.However,while the generic medicine industry has long played a critical role in keeping b

30、udgets under control,it is important to recognise that the nature and extent of that role is now evolving(Exhibit 2).As highlighted above,generic medicines are now used to treat the majority of complex chronic diseases and their role in bolstering pharmaceutical supply chain is increasingly recogniz

31、ed by all stakeholders.Perceived value Limited savingsLimited MS%No substitutionProduction advancementCopay reductionsDeveloped market share Market share reliancePermitting innovator spending Generic trust(auto sub.)Lower savings potential New formulations Originator retentionSavings generatorBudget

32、 supportPatient accessValue4|Beneath the Surface:Unravelling the True Value of Generic Medicines European PerspectivesThe report assesses the societal value of generic medicines in four novel dimensions,reflecting the changing priorities of European healthcare systems(Exhibit 3):Economic value:savin

33、gs post-loss of exclusivity,but also comprising budget optimisation,savings long-term,and the impact of lower prices on medicine access throughout the EU.Patient access value:treatment of patients in areas which were limited by access restrictions.These areas can now be broadened to a greater patien

34、t population and the gains are measured by understanding the impact of genericisation on value,volume,and price on key therapeutic areas over time.Value to the supply chain:the role of generic medicines in supporting access to critical medicines,and supply chain security,evidenced by the proportion

35、of generic medicines in the EUs critical medicines list and an investigation into the dynamics of shortages and the role that competition plays.Value to innovation:an important value provided by generic manufacturers represented by advances in delivery systems and production capabilities that can be

36、 optimised further by generic manufacturers.Exhibit 3:Four value dimensions of generic medicines Today,the value of generic medicines continues to be centred on affordability and access.However,while the generic medicine industry has long played a critical role in keeping budgets under control,it is

37、 important to recognise that the nature and extent of that role is now evolving.Additional contributions for healthcare systemsUniversally recognised valueEconomic valueAccessSupply chainInnovation Support predicatable and sustainable spending growth for healthcare systems Provide reliable future sa

38、vings for payers Reduce co-payments for patients Mitigate the risk of shortages through multi-source supply 9 in 10 critical medicines are generic medicines Provide the only option for 40%of all off-patent molecules 20 years after LoE Expand access to major chronic therapy areas Help to reduce disea

39、se burden in underserved markets Have an important role to play in future health outcomes VAM offer a range of unique benefits to patients Stimulate continued innovation from originators Companies are progressing environmentally sustainable practices |5Exhibit 4:EEA(+CH&UK)comparison of protected br

40、and LC spend by medicine class,20002023Source:IQVIA Institute 25-year dataset(June 2023).Notes:sales in LCEUR are calculated by applying annual exchange rate(20002023)to LCUSD sales data,and hence may be subject to fluctuations in exchange rates;Only includes non-biologic products.Protected brands i

41、nclude original protected brands,original new brands,upcoming LOE,and vaccines;EEA countries included:Austria,Belgium,Bulgaria,Croatia,Czech Republic,Denmark,Estonia,Finland,France,Germany,Greece,Hungary,Ireland,Italy,Latvia,Lithuania,Luxembourg,Netherlands,Norway,Poland,Portugal,Romania,Slovakia,Sl

42、ovenia,Spain,Sweden.LC:Local currency.Therapeutic areas are reported at the high class level.Cardiovascular is inclusive of all cardiovascular medicines(ATC1=C)except antihypertensives and cholesterol therapies(lipid regulators),which have their own high classes.Generic medicines support predictable

43、 and sustainable pharmaceutical spendingOver the past decades,the availability of generic medicines has contributed to cost containment in overall spending growth.Their availability and the effect of exclusivity losses in Europe have helped to offset the spending increase from branded medicines grow

44、th.This section describes the value of a sustainable generic marketplace in providing both short-term and long-term savings to healthcare systems.Generic medicines continue to deliver savings long after loss of exclusivity While the short-term savings are the core component of the value of generics,

45、savings can continue over long durations too if the system is managed sustainably.Since 2000,the expenditure on the largest therapy areas(i.e.cardiovascular,antibacterial,and cholesterol)has decreased from 37%of the total pharmaceutical expenditure to 8%because of the availability of generic treatme

46、nts(Exhibit 4).The value of a sustainable generic marketplace to healthcare systems is one that permits not only short-term but also long-term savings.Large opportunities for cost savings can be expected Major European markets have historically been dominated by small molecules,which has supported g

47、eneric market growth.As the biologic market continues to mature,this figure is expected to fall from 75%to less than 50%of upcoming losses of exclusivity(LoE)in the foreseeable future.However,the relative size of the small molecules facing LoE by 2027 is forecast at nearly 10bn,offering considerable

48、 opportunities for generic entry(Exhibit 5).Compared to biologic medicines,100%90%80%70%60%50%40%30%20%10%0%200020052010201520202023All othersCardiovascularCholesterolAntibacterialsTop 3 therapy areas in 2000:37%to 8%6|Beneath the Surface:Unravelling the True Value of Generic Medicines European Pers

49、pectivesExhibit 5:EU4+UK impact of exclusivity losses 20182027,BnSource:IQVIA Market Prognosis,Sep 2022;IQVIA Institute,Nov 2022.The Global Use of Medicines 2023:Outlook to 2027.Report by the IQVIA Institute for Human Data Science.Notes:Sales in LCEUR are calculated by applying annual exchange rate

50、to LCUSD sales data,and hence may be subject to fluctuations in exchange rates.small molecules are more likely to attract competition,meaning that generic entry will continue to generate substantial savings in the future.4 In total,the impact of exclusivity losses in EU4+UK markets from biologic med

51、icines and small molecules will reach nearly 23bn by 2027,almost double the impact of the previous 6 years(Exhibit 5)Generic entry contributes to reducing overall co-payments Countries with high per capita healthcare expenditures often attenuate pharmaceutical costs for patients via co-payments,new

52、reimbursement policies,and deregulation of certain therapies in order to reduce the impact on the healthcare system budget.In Latvia,despite near universal health coverage,publicly covered medicines are subject to co-payments determined by reimbursement levels.In 2016,medicine co-payments stood at 2

53、1%of their total cost,and in 2019,36%of health expenditure in Latvia was paid via out of pocket,which was the second highest level in the EU after Bulgaria,and significantly above the EU average(15%).5 However,in 2020,the government introduced a set of measures to reduce patients co-payments for rei

54、mbursable medicines which included provisions to increase generic usage via mandatory INN prescribing.According to the Latvian Ministry of Health,in the 6 months that followed,co-payments generated from reimbursable medicines decreased by 48%,corresponding to an annual estimated per capita impact of

55、 around 6.25.6 More recent data indicates that between 2018 and 2022 medicine co-payments decreased by 50%,while generic volume increased by 23%.Importantly,the share of generic medicines included in the Positive Drug List(PDL)also increased by 10%during this time,reflecting increased generic usage

56、and consumption(Exhibit 6).-0.2-0.3-0.5-0.5-1.3-0.8-0.5-0.6-2.2-3.2-1.8-2.5-2.5-2.3-1.2-2.1-2.0-5.2-4.5-2.1-1.5-1.1-1.0-1.1-3.4-5.3-3.8-7.7-7.0-4.4Forecast201820194.8Bn 8.6Bn13.4Bn20202021202220232024202520262027BiologicSmall moleculeTotal brand loss due to LoE13.8Bn 9.1Bn22.9Bn |7Exhibit 6:In count

57、ries with high co-payments,generic market entry is a driver of value for patients and payersSource:IQVIA MIDAS standard units(SU)MAT Q3 2023;OECD Statistics(accessed 28th November 2023).Rx only,Hospital and Retail data.Notes:co-payments data was retrieved from the State Agency of Medicine,Republic o

58、f Latvia.The analysis only includes spend on prescription medicines.1.51.41.31.21.11.00.90.80.70.60.5201620172018201920202021Co-paymentsShare of reference generics in the PDLGeneric volume(SU)Europe averageIndexIndexLatvia1.51.41.31.21.11.00.90.80.70.60.520182019202020212022Share of co-payments in E

59、urope as%of total health expenditure(Rx only,data indexed to 2017)Evolution of the Latvian generic market and medicine co-payments(Rx only,data indexed to 2017)8|Beneath the Surface:Unravelling the True Value of Generic Medicines European PerspectivesGeneric medicines are key access catalystsGeneric

60、 medicines have significantly contributed to increasing access to treatments in Europe,with considerable clinical benefits for patients.This section explores how generic medicines have been critical to not only increase access to key medication in Europe,but also improve health outcomes in key thera

61、peutic areas.Generic medicines doubled access in chronic disease areasMost studies published to date measure short-term savings in the years following competition at a molecule level,or the coming years,but rarely view the longer-term benefits from generic competition.This analysis shows the savings

62、 provided by generic medicines while ensuring that treatment volumes increase.In the past 20 years alone,the core seven therapy areas in 2000 were subject to the highest generic competition and have continued to provide savings while treatment volume has more than doubled(Exhibit 7).Access benefits

63、differ based on therapeutic category and market dynamics The effects of generic competition can vary considerably from country to country depending on price regulations,competitive barriers,the mix of molecules used,and distribution systems.To gain a detailed understanding of the impact of generic e

64、ntry on both cost and access in different markets,the analysis of value,volume and prices was extended to all 27 EU+UK markets.This analysis finds that in some therapeutic categories,generic entry has been pivotal in supporting healthcare systems in increasing affordability and access.For example,si

65、nce 2005 generic medicines have reduced the price of anti-ulcerants by 83%,while supporting a 145%increase in volume(Exhibit 8).Exhibit 7:Evolution of therapy volume,price of treatment and overall spend on treatment in 7 therapy areasSource:IQVIA MIDAS QTR Dec 2023;Selected therapy areas:Anti-depres

66、sants,anti-epileptics,anti-psychotics,anti-ulcerants,cholesterol regulators,narcotic analgesics and beta-blocking agents.Rx,retail,oral molecules only,combinations excluded;Includes 26 European countries;Normalized to population growth;Population data sourced from the World Bank.Note:Sales in LCEUR

67、are calculated by applying annual exchange rate(20002023)to LCUSD sales data,and hence may be subject to fluctuations in exchange rates.3.53.02.52.01.51.00.50.0Q3 2005Q3 2011Q3 2012Q3 2013Q3 2014Q3 2015Q3 2016Q3 2017Q3 2018Q3 2019Q3 2020Q3 2021Q3 2022Q2 2023Q3 2006Q3 2007Q3 2008Q3 2009Q3 2010Q3 2011

68、Price per TD()IndexSpend on treatment(,Bn)Number of treatment days/Capita3.53.02.52.01.51.00.50.02005201120112023 |9Data for cardiovascular and cholesterol therapies is broadly consistent.Prices of cholesterol therapies declined on average in all countries,yet,there was significant variation with re

69、gard to magnitude.Exhibit 9 shows that price decreases vary significantly across countries.Differences in market structures(notably the number of off-patent medicines)and prescribing practices likely explain these cross-country differences.The largest price declines were observed in countries that o

70、perate tender-like systems for generic procurement(i.e.Denmark,Sweden and Germany).However,the largest increases in access occurred in countries with only moderate price declines(i.e.Estonia,Lithuania,Romania).This shows that the potential benefits of the generics medicine industry cannot be maximis

71、ed if the focus is on the lowest price alone.In addition,forced price reductions may impact the economic viability of market players and lead to voluntary withdrawals from the market,which would deepen medicines shortages and reduce access.Exhibit 8:Generic anti-ulcerants reduce costs by almost 60%,

72、while doubling access and reducing prices 6-fold Source:IQVIA MIDAS long-term dataset.Chart notes:Sales in LCEUR are calculated by applying annual exchange rate(20002023)to LCUSD sales data,and hence may be subject to fluctuations in exchange rates;Only includes non-biologic products;Protected brand

73、s include original protected brands,upcoming LOE and vaccines,New brands include original new brands;LOE include drugs that lost patent protection;Generics include non-original branded products as well as drugs that are marketed using the molecule name.Standard unit(SU)refers to the number of doses

74、of a product sold.Since 2005 generic medicines have reduced the price of anti-ulcerants by 83%,while supporting a 145%increase in volume(Exhibit 8).Value(LCEUR Bn)876543210-59%since 2005in value20002020201520102005GenericsLoEProtectedbrandsNewbrandsVolume(SU Bn)2520151050+145%since 2005in volume2000

75、2020201520102005GenericsLoEProtectedbrandsNewbrandsPrice(LCEUR)3.02.52.01.51.00.50.0-83%since 2005in price20002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022Europeanaverageprice10|Beneath the Surface:Unravelling the True Value of Generic Medicines European Pe

76、rspectivesExhibit 9:Country-level analysis of historical changes in value,volume and priceSource:IQVIA MIDAS long-term dataset(Dec 2023).Notes:%change since 2007.Sales in LCEUR are calculated by applying annual exchange rate(20002023)to LCUSD sales data,and hence may be subject to fluctuations in ex

77、change rates;Only includes non-biologic products;Protected brands include original protected brands,upcoming LOE and vaccines,New brands include original new brands;LOE include drugs that lost patent protection;Generics include non-original branded products as well as drugs that are marketed using t

78、he molecule name.Standard unit(SU)refers to the number of doses of a product sold.Dark green in the heatmap reflects instances where the%change exceeded 1000%(Latvia,Lithuania,Estonia).DecreasedIncreasedEU4+UKREGIONANTI-ULCERANTSCARDIOVASCULARSANTI-CHOLESTEROLVALUEVOLUMEPRICEVALUEVOLUMEPRICEVALUEVOL

79、UMEPRICEFranceGermanyItalySpainUKCEEBulgariaCroatiaCzechiaEstoniaHungaryLatviaLithuaniaPolandRomaniaSlovakiaSloveniaNORDICSDenmarkFinlandNorwaySwedenOTHER WESTERNAustriaBelgiumGreeceIrelandLuxemburgNetherlandsSwitzerland |11Exhibit 10:The entry of generic PreP has contributed to a significant reduct

80、ion in HIV treatment access gaps across EuropeSource:IQVIA MIDAS;UNAIDS epidemiological estimates(accessed on 7th December 2023).Western Europe=Austria,Belgium,Denmark,Finland,France,Greece,Germany,Ireland,Italy,Luxemburg,Netheralnds,Norway,Portugal,Spain,Sweden,Switzerland,United Kingdom.CEE=Bulgar

81、ia,Croatia,Czechia,Estonia,Hungary,Latvia,Lithuania,Poland,Romania,Serbia,Slovakia,Slovenia.Analysis based on all 3 EMA authorized products for HIV prevention(PreP)as of 14th December 2023.Note:volume is in standard units(SU)and was normalized by country population data(source:World Bank,accessed on

82、 7th December 2023).Generic medicines help to reduce disease burden in underserved markets It is difficult to directly attribute health outcome improvements to medicines without a health economic assessment due to numerous variables however,in the European Union,new HIV infections have fallen by 45%

83、since the first branded PrEP,a prophylactic option for HIV prevention,was licensed in 2016.Disparities in access mean that infections have fallen more slowly in CEE compared to Western European countries(Exhibit 10).The high cost of treatment is among the main reasons for limited access amongst HIV

84、vulnerable populations in CEE countries.Currently,the EMA has approved two therapies for the use of PrEP:the combination of emtricitabine and tenofovir disoproxil fumarate(Truvada),and,more recently,the injectable cabotegravir(Apretude).However,in 2016,prior to the availability of generic medicines,

85、only one therapy was available in Europe and available data shows that consumption was mostly concentrated in Western Europe where,in some countries,oral PrEP(emtricitabine and tenofovir disoproxil fumarate)is often available at no extra cost.7 In contrast,in most CEE countries PrEP therapies are no

86、t publicly reimbursed and out-of-pocket payments are required.8 Research into the impact of generic availability of PrEP treatments indicate that countries with the lowest consumption of PrEP benefited the most from generic penetration.Exhibit 10 shows that following the commercialization of the fir

87、st generic PrEP in 2017,the volume of PrEP therapies rose in both Western and CEE countries,however the sharpest increase is seen in the latter group of countries where treatment volume rose by nearly 35%in 5 years.Infections/deaths number20,00015,00010,0005,00001stgenericPreP19901992199419961998200

88、02002200420062008201020122014201620182020202219901992199419961998200020022004200620082010201220142016201820202022Non-generic PrePGeneric PreP5,0004,0003,0002,0001,0000Western EuropeNew HIV infections and deaths(19902022)CEEInfectionsDeaths1stgenericPrePNormalised volume0.200.150.100.050.020162017201

89、820192020202120222023201620172018201920202021202220230.0350.0300.0250.0200.0150.0100.0050.00012|Beneath the Surface:Unravelling the True Value of Generic Medicines European PerspectivesSuch examples illustrate the importance of generic medicines in enabling healthcare providers to afford access to n

90、ew therapies where access barriers remain high,producing additional savings for healthcare systems through the indirect effects associated with improved population health.Generic medicines have an important role to play in future health outcomes In the near future,generic medicines will continue to

91、play an important role in expanding treatment access in underserved markets.Hepatitis C is an important example due to the impact on people living with the disease,indirect societal costs,and the high cost to the healthcare system of under-treatment.The disease affects 15,000 people in Europe and wi

92、th the notable exceptions of Denmark,France,the Netherlands,Scotland and Slovenia,which developed their first hepatitis C policies between 1997 and 2007,most of the current national hepatitis policies in Europe are recent and were developed in the wake of the Action 2030 plan for viral hepatitis.9 G

93、ileads breakthrough medication sofosbuvir(Sovaldi)is expected to face competitor generic entry in the next few years and thus generic companies are well-placed to seize the opportunity to fill treatment gaps and improve access to essential health products.Generic medicines also have the potential to

94、 improve health outcomes in major therapeutic areas,such as hypertension.Past research suggests that increased utilisation of generic medicines was one of the key factors behind the significant fall in hypertension-related mortality in Germany(by 50%between 1998 and 2010).10 However,underutilization

95、 of treatment guidelines and slower generic penetration in smaller markets mean that generic medicines still have a significant role to play in improving health outcomes.These examples highlight that to fully benefit from budget savings and population health benefits brought about by generic product

96、s,rapid generic uptake in volume terms and effective price competition among generic medicines producers should be facilitated.Generic medicines support supply chain resilience70%of medicines consumed in Europe are generics,and their large network of suppliers is of fundamental value to the supply c

97、hain and the wider pharmaceutical sector.This section explores the importance of generic medicines in supporting healthcare demand in Europe at normal and enhanced levels of need.Multisource generic products mitigate the impact of shortages Supply chain security has become a focus for governments ar

98、ound the world,with medicines shortages increasing in patient-critical therapies.Although the role of generic medicines in bolstering the pharmaceutical supply chain is increasingly recognized,their broader contributions to supply chain security are often overlooked.Shortages of innovative and prote

99、cted products are rare,however medicines shortages in the generics segment operate differently to those in the protected segment.With off-patent products,often multiple manufacturers can redistribute stock and meet demand within a country experiencing a shortage.For more complex shortages on product

100、s with few suppliers,volatile demand,and ultra-low prices,these dynamics do not always fill the gap,highlighting the benefits provided by a healthy competitive environment.To further illustrate the impact of this,there have been significant frictions in the supply of olanzapine in the UK after its p

101、rice dropped to its lowest level in 2016 and the number of suppliers fell from 5 to 2.Although a subsequent increase in price was followed by new market entrants,re-establishing original supply volumes took up to 6 months.11With off-patent products,often multiple manufacturers can redistribute stock

102、 and meet demand within a country experiencing a |13Importantly,the number of competitors for a given product has an impact on the risk of shortage(Exhibit 11).Over two thirds of all reported shortages between January 2023 and 2024 stemmed from medicines with low supplier count(i.e.less than 5 suppl

103、iers)in Europe,indicating that achieving continuity of supply requires sustainable levels of competition.Unlike protected brands,generic medicines are typically multi-source,with several generic medicine manufacturers producing the same product.This strengthens pharmaceutical supply chain resilience

104、 at times of increased demand.9 in 10 critical medicines are generic medicines The EU list of critical medicines contains human medicines whose continued supply is considered a priority in the EU,to avoid serious harm to patients and help healthcare systems function.92%of the European Commissions li

105、st of critical medicines for major events and/or public health emergencies are generic medicines(Exhibit 12).The list includes both innovative and generic medicines for human use covering a wide range of therapeutic areas,including antibacterials.oncologic and pain therapies,which together represent

106、 almost 40%of all generic medicines included in the critical medicines list(Exhibit 12).It is important to note that prior to the newly created European critical medicines list,some countries developed their own critical medicines lists.While the products included vary and the purposes of these list

107、s differ,the national picture of generic medicines remains the same.Generic medicines are 80%of the molecules and 90%of volume of European countries critical medicines list.For the most common INNs on European national critical medicines lists,there are rarely fewer than 5 competitors operating in e

108、ach country.Exhibit 11:The existence of multisource(MS)products is able to fill the gaps in European markets after shortages are reportedSource:IQVIA analysis.Chart notes:data is limited to total reported medicine shortages in all EU27 countries between January 2023 and January 2024.*Data includes b

109、oth single-source and multi-source products.Low supplier countcorrespondes to instances where the product is provided by 5 suppliers in Europe.The analysis does not account for the relative number of molecules,but does highlight the increased risk of shortages with low numbers of ccompetitors which

110、is linked to the size of the market.Number of shortagesTotal number of suppliers8,07573%27%Single sourceMulti source2,0001,5001,000500051015202530354045%European shortages by type(Jan 2023Jan 2024)Number of shortages by total supplier count66%of shortages are associatedwith low supplier count*14|Ben

111、eath the Surface:Unravelling the True Value of Generic Medicines European PerspectivesExhibit 12:Generic medicines are critical components of the EU critical medicines listSource:IQVIA MIDAS Q3 MAT 2023;https:/www.ema.europa.eu/en/human-regulatory-overview/post-authorisation/medicine-shortages-and-a

112、vailability-issues/availability-critical-medicines#ema-inpage-item-64278.Notes:*Analyses based on 249/268 active substance-ATC-5 code pairs included on the Union list of critical medicines published on 12th December 2023,due to data coverage;Includes EU27+NO,CH,UK markets.Bn=billion,in standard unit

113、s(volume).After loss of exclusivity,generic medicines are often the only option The supply chain security provided by generic medicines continues long after loss exclusivity as generic medicines can often be the only available treatment option.In many European markets,automatic substitution occurs f

114、or generic products meaning that the market share of the originator molecule will decline,replaced by competitors.Regardless of which substitution policies are present in each market,available data suggests that generic medicines are often the only option for off-patent products.In countries where s

115、ubstitution is legally allowed,40%of all off-patent products(in absolute numbers)are only available as generic medicines 20 years after LoE,representing 66%of the off-patent market by volume and 62%of the market by value(Exhibit 13).In countries where generic substitution is not allowed,the picture

116、only differs slightly.Of all the off-patent products available on the market,52%are generic only.92%of the European Commissions list of critical medicines for major events and/or public health emergencies are generic medicines(Exhibit 12).Non-genericGenericOtherOncologicsAntibacterialsPainEU critica

117、l medicines list overview(Generic vs Non-generic)EU critical medicine list by Therapy Area(Generic only)Share of molecules*Share of treatmentvolume(SU)16%14%7%64%N=22992%67%8%33%24964 Bn |15Exhibit 13:Generic medicines are often the only option,regardless of whether substitution is allowedSource:MfE

118、 Market review:European generic medicines markets(2023);IQVIA MIDAS Q3 2023;IQVIA Ark Intelligence 2023.Hospital and Retail.Rx only;INN insights(excl.vaccines,Inn insights not assigned,hospital solutions,diagnostics and ATC V products).Includes EU27+NO,CH,UK markets.Value=sales in EUR.Substitution n

119、ot allowed=countries where generic substitution is not allowed(Austria,Bulgaria and Croatia).Note that generic only products include instances where the product is supplied by both innovative brand and generic manufacturers,however the volume share of the originators is 25%of the total in standard u

120、nits.In summary,instances where generic medicines offer the only therapeutic option for a given molecule highlight the importance of the segment to patient care beyond simply savings and access.Generic manufacturers continue to invest in Europe Reshoring of manufacturing sites has been a discussion

121、topic since COVID-19,with many tender criteria now asking for a level of European manufacturing.In line with the European Commissions objective of supply chain security,there is a growing recognition among generic manufacturers of the importance of local manufacturing and supply chain strengthening.

122、This has raised efforts from the generics sector to support the pharmaceutical supply chain in its most critical areas.The generic medicines industry alone comprises over 400 manufacturing sites in Europe with over 20 projects currently underway across Europe to support manufacturing.12 However,the

123、development complexity is high since the relative size,current location of plants,and importance of sites is commercially sensitive(Exhibit 14).In Austria,Sandozs recent 200 million investment in penicillin manufacturing facility underscores the continued commitment of generic manufacturers to guara

124、nteeing sustainable access to antibiotics in Europe.13Generic manufacturers are also continuing to invest in API manufacturing at a time when the global production share of APIs in Europe has fallen from 53%to 25%between 2000 and 2022.14 Companies are attempting to improve their processes,with some

125、maintaining a minimum of two suppliers for every starting material15 as alternative sources.Share of generic only products(%)Years since LoE7060504030201000 to 56 to 1011 to 1516 to 20ValueProduct number(substitution not allowed)VolumeProduct number(substitution allowed)Share of off-patent products

126、for which generics are the only option(Years since LoE)off-patent volume share 20 years after LoE66%16|Beneath the Surface:Unravelling the True Value of Generic Medicines European PerspectivesExhibit 14:New generic medicine manufacturing investments in the EUSource:IQVIA GS&AR;Egualia,Osservatorio N

127、omisma Su Il sistema dei farmaci generici in Italia 2023(accessed on 12 December 2023);Medicines for Europe,Off patent industry new investments in EU manufacturing (2023);press releases and company websites.Despite increasing investment in Europe,generic manufacturers are still facing challenges fro

128、m overseas players.Although the market penetration of non-domestic generic medicine manufacturers in Europe has lagged that of the US,increasingly Indian and Chinese-based manufacturers are looking at the European generic medicine market with greater interest.Low production costs and a different pat

129、ent protection system confer competitive advantages which can place the European generic manufacturing industry at disadvantage.Grants,low-interest loans,and export incentives generate cost advantages which cannot be obtained within the EU.These market dynamics can expose European generic manufactur

130、ers to unsustainable levels of competition as overseas players are able to drive down prices and gain market share in price-only tendering systems.Distribution of generic manufacturing sites in EuropeReported developments of manufacturing sites in Europeas of Dec 2023Expanded plantsPipeline projects

131、New facilitiesThe generic medicines industry alone comprises over 400 manufacturing sites in Europe with over 20 projects currently underway across Europe to support manufacturing.12 |17Exhibit 15:Value-added medicines case studies from EuropeThe off-patent sector supports innovation Generic compani

132、es support innovation both indirectly through savings that are then used to fund further innovation,but also directly by innovating in manufacturing approaches,product improvements,and through improved environmental practises to have wider patient and societal benefits.VAMs directly offer a range of

133、 unique benefits to patients Value-added medicines(VAMs)are medicines based on known molecules that address healthcare needs,and deliver relevant improvements for patients,health care professionals and/or payers.They represent an opportunity to expand access to patients,while improving health outcom

134、es.While there is no dedicated approval process in Europe,the US offers well-established regulatory processes defining eligibility,submission criteria and exclusivity protection,via the 505(b)(2)pathway.The number of approvals obtained via this pathway can be used as a proxy to measure the pace at w

135、hich the industry is evolving in Europe.Current data suggests that off-patent innovation has progressed rapidly in the last decades,moving from small-step innovation(i.e.new salts,new excipients),to leveraging advanced technologies and new treatments in often neglected therapeutic areas,ultimately i

136、mproving outcomes for patients.As an example,recently launched VAMs can range from alternative dosing forms for patients16 no longer responding to their regular therapy,to products with improved pharmacological profile17,which enable effective treatment for more patients,or with reduced side effects

137、 allowing patients to continue their treatment,instead of switching to more expensive options.18 A summary of the major categories of VAMs are shown in Exhibit 15.These examples showcase some of the improvements that can be made to off-patent products by manufacturers other than the original develop

138、er that can have a benefit to the healthcare system.Superior efficacyDasatinib Zentiva:compared to dasatinib monohydrate,this product delivers the active ingredient irrespectively of the acidity in the stomach which enabled effective treatment for an additional 20%of patients.Reduced side effectsMet

139、hotrexate Medac:this once-weekly subcutaneous injection offers reduced side effiects compared to the oral formulation allowing patients to continue their treatment for longer,instead of switching to more expensive treatments,with financial gains for healthcare systems.Improved therapeutic optionLegi

140、con:direct delivery into the intestine circumvents the limitations of erratic gastric emptying and short plasma half-life of levodopa,providing a therapeutic option for advanced PD patients that no longer respond to oral treatments.VAM18|Beneath the Surface:Unravelling the True Value of Generic Medi

141、cines European PerspectivesOn another level,VAMs enable the development of safer ways to administer medicines,so that physicians and patients are exposed to lower risks of accidents.For instance,in 2021 the launch of a ready-to-dilute,higher strength formulation for a widely used oncological treatme

142、nt eliminated additional handling steps,reducing patients contamination risk and waiting times.19 Finally,beyond addressing unmet clinical needs,it is important to highlight that VAMs can also support healthcare systems in achieving improved efficiency and savings.For example,a recently published re

143、port by the UKs Department of Health and Social Care indicates that the increased use of ready-to-administer products could free up over 1 million hospital beds a year,helping the health system to achieve an estimated financial benefit of 346 million each year.20 Generic companies are progressing en

144、vironmentally sustainable practices While this is not unique to the generics sector,generic manufacturers are also exploring new approaches to meet environment,social and corporate governance(ESG)targets.Several companies have developed novel approaches to link both climate and access to medicine ta

145、rgets to a sustainability-linked bond(SLB).21 Some of these targets are not only associated with a reduction in both Scope 1 and 2 greenhouse gas(GHG)emissions,but also to an increase in access to essential medicines particularly for patients in low-and middle-income countries(LMICs).These efforts a

146、re increasingly being recognised by the industry.22,23Manufacturers are also exploring how new production processes that can help them to reduce their carbon footprint.Continuous manufacturing(CM),for instance,not only allows companies to speed up development timelines for new medicines,but also rep

147、resents an important advancement as separate production stages lead to significantly higher carbon emissions.At present,several companies have already invested in developing CM lines.24 Additional innovation comes from the implementation of new sustainable solutions to offset emissions.In 2023,one g

148、eneric manufacturer announced plans to complete one of the largest solar panels installations in Czech Republic at their local manufacturing site.25 More recently,another company introduced the first electric vehicle of its kind weighing more than 12 tons with cargo in Slovenia.26Generic savings cyc

149、le continues innovation Savings generated from generic entry can be deployed to cover the costs of newer,innovative medicines that support new standards of care and improve health outcomes.This process permits innovation as payers are able to reinvest back into new innovations in pharma,healthcare t

150、echnology,or staffing.If the pressure is only on costs without any holistic recognition of the true role of generic medicines in the healthcare ecosystem,then this innovative potential may not be fully maximized in the future.Savings generated from generic entry can be deployed to cover the costs of

151、 newer,innovative medicines that support new standards of care and improve health |19Challenges and long-term outlook Summary:Spending on top 3 therapeutic areas has decreased from 37%to 8%since 2000 The size of the small molecules facing LoE by 2027 is forecast at nearly 10bn Generic medicines have

152、 doubled access in chronic disease areas Nearly 70%of shortages are linked to products with less than 5 suppliers 9 in 10 of Europes critical medicines are generic medicines Generics are the only option for 40%of all off-patent molecules 20 years after LoEOver the past decades,it is unlikely that go

153、vernment and payers would have met the growing demand for medicines without the savings generated by generic medicines.Today generics are in use in all facets of healthcare and can only be replaced at enormous additional costs for society.Given the Europes ageing populations27,financial challenges,i

154、ncreased burden of chronic disease,and a surge in innovative treatment options,the contributions that generic medicines offer to health systems are increasingly important.Generic medicines entered the European market in the 1980s and 1990s,supported by government policies favoring their adoption.In

155、the following decades,the loss of patent protection for blockbuster medicines led to substantial healthcare savings,however subsequent cost containment policies have caused a sharper focus on their cost-saving potential at the expense of other contributions.The continued sustainability of the generi

156、c medicine industry is not a foregone conclusion and requires further consideration.While the core purpose is to deliver savings,viewing generic medicines solely as a cost-saving mechanism can limit their ability to deliver long-term benefits.Pricing pressures could limit the provision of older prod

157、ucts as the commercial viability becomes limited but can also incentivise progression onto newer treatment classes if these are available.The role of generics has grown in the post-COVID-19 era to one that supports Europes supply chain resilience.An understanding of the role in critical medicines,an

158、d a need for greater European manufacturing presence was not a priority in previous decades.Managing medicines shortages effectively,expanding Europes manufacturing footprint,and developing environmentally conscious approaches to products and manufacturing processes will add new costs in the short-t

159、erm.Despite clear benefits,the willingness for continued investment and willingness to pay remains uncertain.The focus on patient access,affordability,supply chain security,and environmental considerations come with an element of cost in their provision which is borne by different stakeholders.Manuf

160、acturers look for rewards for investments that add competition,stimulate innovation,and meet Europes social agenda.The changing landscape and proposition provided by the generic medicine sector raises new questions to be answered:1 What can healthcare systems do to optimize past and future savings f

161、rom off-patent opportunities provided by generic molecules?2 Is it possible to balance access to smaller volume products that have limited commercial viability but remain valuable treatment options?3 How can a greater supply security be ensured for Europe,and what are the implications on current pri

162、ces?4 What are the potential risks of reshoring and what challenges does the sector face?5 How can the economic and societal value provided by the sector be translated into futureproof generic medicine policies supporting investment in the sector?20|Beneath the Surface:Unravelling the True Value of

163、Generic Medicines European PerspectivesReferences 1.Schulz A.,Evolving Dynamics of US and European Generics Markets,Sage Journals(2004),2(1).2.European Commission,Generic Entry in Prescription Medicines in the EU(2009).Available at:https:/ec.europa.eu/dgs/competition/economist/prescription_medicines

164、.pdf 3.IQVIA,The Role of Generic Medicines in Sustaining Healthcare Systems:A European Perspective(2015).Available at:https:/ 4.IQVIA,Assessing the Biosimilar Void(2023).Available at:https:/ 5.European Commission,State of Health in the EU,Latvia,Country Health Profile(2021).Available at:https:/healt

165、h.ec.europa.eu/system/files/2021-12/2021_chp_lv_english.pdf 6.Latvia Ministry of Health(2021).Roadmap for Improving Access to Medicines in Latvia.Available at:https:/www.vm.gov.lv/lv/media/10082/download 7.AIDS Action Europe,Rapid Assessment on Access to PrEP in EU/EEA Countries(2023).Available at:h

166、ttps:/www.prepwatch.org/wp-content/uploads/2022/12/EU-PrEp-report-final.pdf 8.Tambor M,Klich J,Domagaa A.Financing Healthcare in Central and Eastern European Countries:How Far Are We from Universal Health Coverage?Int J Environ Res Public Health.2021 Feb 3;18(4):1382.doi:10.3390/ijerph18041382.PMID:

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168、 11.Oxera,The Supply of Generic Medicines in the UK(2019).Available at:https:/ 12.Medicines for Europe,Off patent industry new investments in EU manufacturing(2023).13.European Pharmaceutical Review,Sandoz mobilises critical medicine production in Europe(2023).Available at:https:/ for Europe,A stron

169、g European API industry can achieve strategic autonomy of the EU health system(2022).Available at:https:/ 15.Teva,Sourcing the Raw Materials for an API How its Done!Available at:https:/www.teva- Pharmaceuticals Technology,available at:https:/ 17.Sharma M,Holmes HM,Mehta HB,et al.The concomitant use

170、of tyrosine kinase inhibitors and proton pump inhibitors:Prevalence,predictors,and impact on survival and discontinuation of therapy in older adults with cancer.Cancer.2019 Apr 1;125(7):1155-1162.doi:10.1002/cncr.31917.Epub 2019 Jan 3.PMID:30605231;PMCID:PMC6420393.18.Braun J,Kstner P,Flaxenberg P,e

171、t al.,MC-MTX.6/RH Study Group.Comparison of the clinical efficacy and safety of subcutaneous versus oral administration of methotrexate in patients with active rheumatoid arthritis:results of a six-month,multicenter,randomized,double-blind,controlled,phase IV trial.Arthritis Rheum.2008 Jan;58(1):73-

172、81.doi:10.1002/art.23144.PMID:18163521.19.Sandoz,Sandoz announces EU launch of ready-to-dilute generic Pemetrexed to treat most prevalent form of lung cancer.Available at:https:/ 20.UK Department of Health and Social Care,Transforming NHS pharmacy aseptic services in England(2020).Available at:https

173、:/www.gov.uk/government/publications/transforming-nhs-pharmacy-aseptic-services-in-england/transforming-nhs-pharmacy-aseptic-services-in-england#thanks-and-acknowledgements 21.Teva,Teva becomes first pharmaceutical company to execute sustainability-linked bond tied to both climate and access to medi

174、cine targets(2021).Available at:https:/ awarded an EcoVadis 2020 Silver Medal in recognition of our sustainability rating(2020).Available at:https:/www.teva- Receives its First BSI Certification for Minimized Risk of AMR(2024).Available at:https:/ 24.GaBi,Continuous manufacturing versus batch manufa

175、cturing:benefits,opportunities and challenges for manufacturers and regulators(2021).Available at:https:/gabi- 25.Zentiva,Zentiva installs one of the biggest roof top photovoltaic installations in the Czech Republic(2023).Available at:https:/ 26.KRKA,Making sustainable mobility a reality:the first h

176、eavy-duty electric truck for transporting products in Slovenia(2024).Available at:https:/www.krka.biz/media-center/news/making-sustainable-mobility-a-reality-the-first-heavy-duty-electric-truck-for-transporting-products-in-slovenia/27.Eurostat data,Population age structure(2022);Available at:https:/

177、ec.europa.eu/eurostat/statistics-explained/index.php?title=Population_structure_and_ageing#The_share_of_elderly_people_continues_to_increase22|Beneath the Surface:Unravelling the True Value of Generic Medicines European perspectivesAbout the authorsPER TROEINVice President,Strategic Partners,IQVIA P

178、er Troein is a global leader at IQVIA,responsible for the relationships with different industry associations,government and EU bodies,wholesalers and pharmacies.His work is focused on policy issues for the pharmaceutical industry and is an expert in pharmaceutical pricing.Per graduated from Lund Ins

179、titute of Technology(Master in Science)in Sweden and holds an MBA from INSEAD.MAX NEWTONEngagement Manager,Strategic Partners(GS&AR),IQVIA Max Newton is an Engagement Manager with over 8-years of experience in pharmaceutical consulting,leading diverse projects across policy,government affairs,and co

180、mmercial strategy.Max manages a team responsible for strategic engagements with global associations,and industry groups and holds a BSc in Medical Microbiology&Virology for Warwick University,and an MSc in Drug Discovery&Pharmaceutical Management from University College London.MARCO TRAVAGLIOConsult

181、ant,Global Supplier&Association Relations,IQVIA Marco Travaglio is a Consultant in the Global Suppliers and Association Relations team of IQVIA,based in the London office.He has a strong foundation in pharmaceutical R&D,having previously worked at Eli Lilly and AstraZeneca.Marco supports strategic e

182、ngagements with global associations,EU bodies and industry groups and holds a MSci degree in Neuroscience from the University of Nottingham and a PhD in Toxicology from the University of Cambridge.KELSEY STODDART Consultant,Global Supplier&Association Relations,IQVIA Kelsey Stoddart is a Consultant

183、within IQVIA Global Supplier&Association Relations team.She has over 4-years of life sciences consulting experience across commercial strategy,value and market access projects.Kelsey holds a BSc in Pharmacology from Newcastle University,and an MSc in Pharmacology from University of O|23 2024.All rights reserved.IQVIA is a registered trademark of IQVIA Inc.in the United States,the European Union,and various other countries.04.2024.EMEACONTACT USFor further information,please contact