BACKGROUND: In order to increase price competition, government regulations focus on controlling drug costs. Drug costs after patent expiry are an area of particular interest because the substitution of branded medication with generics represents an opportunity for lowering drug costs. However, drug costs may not decrease after patent expiry, because of a lack of price competition and different national pricing systems. AIM: The aim of this study was to investigate the trends in the use of generics after patent expiry for enalapril, fluoxetine and ranitidine and the subsequent changes, if any, in the costs of these medications. METHODS: A drug-utilisation study was performed using data from a large sample of Dutch pharmacies. Both volumes (measured as defined daily doses [DDD] per 1000 population) as well as drug costs (calculated per DDD) prior to and after patent expiry were calculated. Costs per DDD were compared using trend-line analysis. In addition, the relative market shares of the different trade channels (branded, parallel imported and generic) were compared before and after patent expiry. RESULTS: The costs per DDD decreased for all three drugs and, as expected, these costs decrease more rapidly after patent expiry. Significant differences in the trend lines were found for enalapril and fluoxetine. CONCLUSIONS: Despite relatively high reimbursement prices for generics in the Netherlands, this example from the Dutch pharmaceutical market demonstrates the benefit of generic substitution for containing pharmaceutical costs, which contrasts with concerns raised by the Dutch government.
BACKGROUND: In order to increase price competition, government regulations focus on controlling drug costs. Drug costs after patent expiry are an area of particular interest because the substitution of branded medication with generics represents an opportunity for lowering drug costs. However, drug costs may not decrease after patent expiry, because of a lack of price competition and different national pricing systems. AIM: The aim of this study was to investigate the trends in the use of generics after patent expiry for enalapril, fluoxetine and ranitidine and the subsequent changes, if any, in the costs of these medications. METHODS: A drug-utilisation study was performed using data from a large sample of Dutch pharmacies. Both volumes (measured as defined daily doses [DDD] per 1000 population) as well as drug costs (calculated per DDD) prior to and after patent expiry were calculated. Costs per DDD were compared using trend-line analysis. In addition, the relative market shares of the different trade channels (branded, parallel imported and generic) were compared before and after patent expiry. RESULTS: The costs per DDD decreased for all three drugs and, as expected, these costs decrease more rapidly after patent expiry. Significant differences in the trend lines were found for enalapril and fluoxetine. CONCLUSIONS: Despite relatively high reimbursement prices for generics in the Netherlands, this example from the Dutch pharmaceutical market demonstrates the benefit of generic substitution for containing pharmaceutical costs, which contrasts with concerns raised by the Dutch government.