HUP Association of Pharmaceutical Manufacturers: Price Indexation of Generic Medicines is Necessary

Over the past five years, generic medicines have reduced healthcare system costs in Europe by 41 percent while simultaneously increasing therapy availability by 27 percent, according to data prepared by Teva in collaboration with IQVIA. A significant rise in input costs combined with the existing model of automatic price reductions for generic medicines has disrupted this favorable trend to the brink of sustainability, both in the European Union and in Croatia, warned members of the HUP Association of Pharmaceutical Manufacturers today.

Given the rise in input costs and proposed pricing models, generic medicine manufacturers find themselves in an unsustainable situation. Croatia, just like the rest of Europe, has already felt the direct consequences, but Croatia still has a better picture due to domestic manufacturers holding a very good share of the market.

Drug shortages have been a frequent topic in recent months, and recently, the shortage of Klavocin has been most mentioned, which, as confirmed today, occurred due to a global shortage of active substances as it is increasingly rare in Europe for healthcare systems to have multiple suppliers. Although the situation is expected to normalize in the coming months, due to excessive demand and too few suppliers, the situation remains as it is.

Indeed, due to the continuous decline in prices over the past five years one medicine has been withdrawn from the Croatian market every third day. In other words, due to unsustainability, about 1500 medicines have been withdrawn, and the existing market for generic medicines cannot withstand further price pressures.

– We will not find a solution quickly, but we can make the situation a little better. We need to raise prices immediately; Germany has already raised prices in January, and Portugal has done so since the beginning of this month – stated HUP, emphasizing that indexation is only necessary for the cheapest medicines.

Thus, they claim it is necessary to raise the price of all prescription generic medicines that are currently not covered by public procurement contracts by 13.2 percent.

In addition to indexation, some of the other concrete proposals from HUP, which have proven effective in other EU member states, include recognizing generic therapy as key and faster introduction of generic and biosimilar medicines into the system, as well as changes in public procurement through a ‘multiwinning’ system.

– Smart public procurement of medicines through the ‘multiwinning’ procurement system is established in the EU because such a system supports market competition and stimulates the retention of most manufacturers in the Croatian healthcare system, thus enabling regular supply of medicines and the regular functioning of the healthcare system. This model is already used in Croatia for biosimilar medicines, ensuring market competition and increasing therapy availability – explained HUP, adding that the urgent introduction of these measures is necessary.