Generic medicine pricing in the Netherlands.

Objective: Generic policy and pricing is a much discussed topic regarding the containment of pharmaceutical expenditure. This thesis has the objective to gain insight in the possibilities for the Netherlands to put further downward pressure on generic prices and at the same time increase volume sales. Methods: A review has been made of country specific pharmaceutical and reimbursement policy information. Databases from OECD, PPRI, EFPIA, EGA and SFK were analysed to gain insight in these profiles. Furthermore data about prices and volumes were analyzed and summarized by using descriptive analyses. Results: The countries included in this study all implemented a regulatory pricing system with internal and external reference pricing. Germany is the exception with handling a free pricing system and/or only internal reference pricing. All countries handled supply and demand side measures, but the extension and combination of these measures differed. In the northern European countries more financial incentives were used to stimulate generic utilization. Conclusion: Lowering generic prices and raising volumes in not just simply possible by implementing demand and supply side measures. The Netherlands is already a precursor with a generic market share of 56 %, but there are still some possibilities. When it comes to supply side measures the Netherlands could benefit by introducing transparent price negotiations. At the moment price negotiations are present in the preference policy, but these are not publicly known. Increased transparency may lead to more competition, which would put downward pressure on prices and trigger the patient to be more aware about the generic substitute for a more expensive pharmaceutical. In addition it could be taken into consideration to price generics at a certain percentage below the originator product to secure equal and lower prices for generics. Another option is to give a more prominent role in the generic policy to the physicians and general practitioners. When they are financially incentivized to prescribe and dispense generics, this could boost generic volume sales. Finally more financial incentives could be introduced. Introducing more cost sharing incentives for patients for branded pharmaceuticals could stimulate generic utilization. When patients face more costs when they use branded pharmaceuticals, the use of generics, which have lower costs, will be more attractive. In the Netherlands health insurers and patient both face the costs of their pharmaceutical behavior, so both parties have an interest in more generic uptake. Health insurers prefer more generic uptake because this will bring down expenditure and patients have a lower or even no co-payment when they use generics. When determining where to start the first point of attention is to increase sales volumes before decreasing prices, and therefore first focus on demand side measures. When this is realized there will be more clearance room to increase volume sales.