What is the value of access to medicines?

As governments around the world grapple with rising healthcare costs, aging populations, and increased incidence of non-communicable diseases (NCDs), the importance of ensuring sustained access to more affordable quality-assured generic and biosimilar medicines is especially important.? But with consistent pressure on pharmaceutical supply chains and constraints to competition, the generic and biosimilar industries face significant challenges.?

Addressing these challenges is critical not just for the industry, but for governments, patients and other stakeholders that rely on the quality-assured medicines produced by these companies.??

The United Nations notes that “the percentage of the global population aged 65 and above is expected to rise from 10% in 2022 to 16% in 2050”[1]. The aging population requires more healthcare services and incurs a significant proportion of healthcare costs, putting increased pressure on healthcare systems and health budgets.?

And non-communicable diseases (NCDs) are increasing rapidly, including disproportionately impacting people in low and middle-income countries (LMICs).? According to the World Health Organization, NCDs kill 41 million people each year, with 86% of those dying before age 70 living in lower- and middle-income countries (LMICs)[2]. The combined burden of NCDs and continued impact of infectious diseases is placing incredible strain on health systems and budgets in LMICs.

The aging population, the increase prevalence of NCDs, and healthcare systems’ financial challenges are all problems with deep societal implications, compromising human development at all levels.

Generic and biosimilar medicines can ease these burdens by providing more affordable, quality-assured options that enable greater access to needed medicines.? The competition brought by off-patent medicines brings relief to payers, governments, and patients. In terms of market volume, generic medicines provide global populations with most of their medicine needs. While utilization varies per country, IGBA reports market volume shares of generic medicines above 70% for each of its members’ jurisdictions[3].

Evidence of the impact of generic and biosimilar medicines on health budgets is significant: in the U.S. in 2022, over 90% of prescriptions were filled with a generic or biosimilar medicine, but these medicines accounted for less than 18% of prescription spending[4]. In Chile, generic substitution could reduce total health expenditure by 4% and total pharmaceutical expenditure by 10%[5]. ?The list goes on.

Despite these benefits for individual patients and for population health, the generic and biosimilar industries face an increasing array of challenges that limit their ability to expand access to medicines.? ?

From an Intellectual Property (IP) perspective, patent evergreening (i.e., the extension of periods of patent exclusivity through varying means for the same or slightly modified inventions) is on the rise.[6],[7] Some countries are taking action to balance IP and competition. For example, in Argentina, government efforts to address perceived abuses of the patent system could set global precedents. Argentina’s preservation of its Guidelines on the Examination of Pharmaceutical Patents[8] is an example of a balanced IP system with benefits to the off-patent sector, and thus, to the general population. In Europe, new legislation will prevent the denigration of generic and biosimilar medicines and the use of IP to threaten healthcare authorities from encouraging generic and biosimilar medicines competition.

From a supply chain perspective, the industry is facing pressure from many different sources. Unexpected—and unpredictable—surges or decreases in demand can alter the ability of off-patent manufacturers to produce efficiently at scale. Supply disruptions—including altered operations in manufacturing sites or difficulties in acquiring active pharmaceutical ingredients, as exemplified by the case of the cancer medicine tamoxifen in Germany[9]—can lead to shortages. Solutions could be found in governmental reforms to create healthy, competitive markets that enable company investments in the diversification of production.

Fundamentally, supply chain pressures are a question of market sustainability. Capped pricing approaches have the potential to leave markets at the mercy of inflation or supply chain disruptions. Inadequate reimbursement and pricing policies may also hinder the development and sustainability of market segments. Perhaps most importantly, certain procurement practices, including inflexible contracting based only on the lowest price and single-winner tenders, can lead to market exit, thus creating more risk of shortages. Solutions can include dynamic pricing approaches, such as the pan-Canadian Tiered Pricing Framework[10]; push and pull incentives for biosimilars and complex generics; and multi-winner tenders based on criteria other than only the lowest price.

From a regulatory perspective, the lack of harmonized global standards, including, for example, the inability to conduct a single set of studies globally in support of a generic or biosimilar medicine application, increases the costs of development and constrains the ability to register off-patent medicines in all countries. Single Global Development—enabling off-patent medicine manufacturers to prepare a single data package globally acceptable in all jurisdictions—and regulatory harmonization is imperative to enable timely, equitable access to medicines across the world.

The generic and biosimilars industry is a precious asset for human development and global health. Ensuring sustained access to these medicines is central to reaching the UN’s Sustainable Development Goals. Without the off-patent medicines sector, access would be severely compromised. This is why it is critical for governments to address the challenges mentioned above. A strong, resilient generic and biosimilar medicines industry supports sustainability in governmental healthcare investments and ultimately enables increased access to medicines for patients. The generic and biosimilars industry stands ready to work with governments, patients, and other stakeholders to make this a reality.?

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[1] UN Global Issues, Ageing. United Nations, 2019. https://www.un.org/en/global-issues/ageing#:~:text=Latest%20trends%20in%20Population%20Ageing&text=The%20proportion%20of%20people%20aged,2022%20to%2016%25%20in%202050 .

[2] NCD Factsheet.? WHO.? 16 Sept. 2023. https://www.who.int/news-room/fact-sheets/detail/noncommunicable-diseases

[3] Market penetration of generic medicines, IGBA, 2023. https://www.igbamedicines.org/doc/Market-Penetration-of-Generic-Medicines.pdf

[4] America’s patients and healthcare system in 2022. Bian, J.Y. https://www.goodwinlaw.com/en/insights/blogs/2023/09/generic-and-biosimilar-drugs-save-$408b-for-americas-patients-and-healthcare-system-in-2022

[5] ?Cuánto podrían ahorrar y qué ganarían los hogares Chilenos usando medicamentos genéricos en vez de sus equivalentes de marca? Atal, et al. Development Bank, 2023. https://publications.iadb.org/es/publications/spanish/viewer/-Cuanto-podrian-ahorrar-y-que-ganarian-los-hogares-Chilenos-usando-medicamentos-genericos-en-vez-de-sus-equivalentes-del-marca.pdf

[6] FTC Challenges More Than 100 Patents as Improperly Listed in the FDA’s Orange Book. Federal Trade Commission, 2023. https://www.ftc.gov/news-events/news/press-releases/2023/11/ftc-challenges-more-100-patents-improperly-listed-fdas-orange-book

[7] Update On Competition Enforcement in The Pharmaceutical Sector (2018-2022), European Commission, 2024. https://ec.europa.eu/commission/presscorner/detail/en/ip_24_413

[8] Guias de Patentabilidad en la Argentina . Ministry of Health, 2012. https://www.wipo.int/edocs/lexdocs/laws/es/ar/ar109es.pdf

[9] Information on medicinal product supply shortages: tamoxifen. BFArM, 2022. https://www.bfarm.de/EN/Medicinal-products/Information-on-medicinal-products/Supply-shortages/tamoxifen.html

[10] Generic Drugs. Pan-Canadian Pharmaceutical Alliance. https://www.pcpacanada.ca/generic-drug-framework