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1 s2.0 S1098301515000029 Main
1 s2.0 S1098301515000029 Main
POLICY PERSPECTIVES
Need for Multicriteria Evaluation of Generic Drug Policies
Zoltán Kaló, MD, MSc, PhD1,2,*, Anke-Peggy Holtorf, PhD, MBA3,4,
Rafael Alfonso-Cristancho, MD, MSc, PhD5, Jie Shen, MSc, MBA6, Tamás Ágh, MD, MSc, PhD2,
András Inotai, PharmD, PhD2, Diana Brixner, RPh, PhD4
1
Faculty of Social Sciences, Department of Health Policy and Health Economics, Eötvös Loránd University (ELTE), Budapest, Hungary;
2
Syreon Research Institute, Budapest, Hungary; 3Health Outcomes Strategies, Basel, Switzerland; 4Department of Pharmacotherapy,
College of Pharmacy, University of Utah, Salt Lake City, UT, USA; 5Department of Surgery, School of Medicine, University of
Washington, Seattle, USA; 6Abbott Products Operations AG, Allschwil, Switzerland
AB STR A CT
Policymakers tend to focus on improving patented drug policies some cases drug formulations, supply reliability, medical adherence
because they are under pressure from patients, physicians, and and persistence, health outcomes, and nondrug costs, however, are
manufacturers to increase access to novel therapies. The success of also attributes of success for generic drug policies. Further methodo-
pharmaceutical innovation over the last few decades has led to the logical research is needed to measure and improve the efficiency of
availability of many off-patent drugs to treat disease areas with the generic drug policies. This also requires extension of the evidence
greatest public health need. Therefore, the success of public health base of the impact of generic drugs, partly based on real-world
programs in improving the health status of the total population is evidence. Multicriteria decision analysis may assist policymakers
highly dependent on the efficiency of generic drug policies. The and researchers to evaluate the true value of generic drugs.
objective of this article was to explore factors influencing the true Keywords: adherence, drug policies, generic drug, multicriteria
efficiency of generic prescription drug policies in supporting public decision analysis, price erosion, real-world evidence.
health initiatives in the developed world. Health care decision makers
often assess the efficiency of generic drug policies by the level of price & 2015 Published by Elsevier Inc. on behalf of International Society for
erosion and market share of generics. Drug quality, bioequivalence, in Pharmacoeconomics and Outcomes Research (ISPOR).
* Address correspondence to: Zoltán Kaló, Faculty of Social Sciences, Department of Health Policy and Health Economics, Eötvös Loránd
University, H-Budapest, Pázmány P. 1a. – 1117, Hungary.
E-mail: kalo@tatk.elte.hu.
1098-3015$36.00 – see front matter & 2015 Published by Elsevier Inc. on behalf of International Society for Pharmacoeconomics and
Outcomes Research (ISPOR).
http://dx.doi.org/10.1016/j.jval.2014.12.012
VALUE IN HEALTH 18 (2015) 346–351 347
interchangeable generic version meeting the bioavailability health care services and accessibility to primary health care
threshold. For this article, we use the term generic drug in services—is highly dependent on the availability and appropriate
concordance with the definition from the World Health Organ- utilization of off-patent drugs.
ization: A generic drug is a pharmaceutical product usually The price differential between original and generic pharma-
intended to be interchangeable with an innovator product that ceuticals is usually significant, but often extremely variable, and,
is manufactured without a license from the innovator company to some degree, depends on the strength of price regulation [12].
and marketed after the expiry date of the patent or other Because of scarcity of health care resources, original patented
exclusive rights [4]. We will consistently refer to the innovator drugs are increasingly used only for those patients who cannot
drug as the original drug and assume the generic drug to be benefit from existing low-priced generic drugs. The number of
considered interchangeable within currently described generic patients on original drug therapies is limited; thus, improvement
drug policies. in health status based on these small groups may not apply to
the total population. Therefore, the major societal benefit of
original drugs is the improved equity in access to effective
Importance of Generic Drugs therapies for those patients with relatively greater unmet
medical need.
In health care systems of developed countries, pharmaceuticals
play a central role in the practice of medicine and patients are
increasingly treated with off-patent drugs [5,6].
Once the patent of a commercially successful, original pharma-
Components of Generic Drug Policies
ceutical has expired and exclusivity rights are lost, several generic
manufacturers proceed with the production and commercialization Market authorization criteria for generic drugs are simplified
of the drug. The market authorization process is simplified because compared with those for original pharmaceuticals. After market
of substantial scientific evidence behind the original drugs from entry, generic substitution, international nonproprietary name
clinical trials and real-world evidence from many patient-years prescribing, price control for generics, generic reference pricing,
demonstrating the effectiveness and safety of the compound. and tenders are widely used measures to promote the uptake of
The most important policy objective of health care systems is generic drugs at the lowest drug acquisition cost [13,14]. Policy-
to improve the health status of the population [7]. The success of makers have several options to incentivize stakeholders to abide
pharmaceutical innovation over the last few decades has by generic drug policies [15–17]. These tools appear to influence
improved the health status of patients for most major diseases, each other; thus, generic drug policies commonly include mixed
reducing the unmet medical need for new pharmaceutical thera- approaches applied by decision makers and health policy
pies. In disease areas with the greatest public health burden (e.g., experts with the ultimate aim to accelerate price erosion and
cardiovascular diseases, mental health, and diabetes mellitus [8]) penetration of generics. In Table 1, a nonexclusive list of differ-
first-line therapy is usually off-patent medicines [9–11]. There- ent policy options for generic prescription drugs is presented,
fore, the success of public health programs in improving the with their expected societal benefits related to different
health status of the total population—in addition to preventive stakeholders.
Table 1 – Common generic drug policy interventions and their expected societal benefits
Policy interventions Expected societal benefit related to different stakeholders
Registration based on Reduced development Increased therapeutic Opportunity for drug Increased accessibility
proof of bioequivalence cost for generics; alternatives substitution to lower-priced drugs
to originals or reference increased competition
by more generic drugs
Mandatory price Continuous generic price Increased therapeutic Opportunity for drug Reduced financial
reduction of new erosion with new alternatives accor- substitution by burden on patients
generics compared with generic entries ding to socio- considering the
reference product economic status of socioeconomic
patients status of patients
International reference Domino effect of generic NA NA Reduced financial
pricing price erosion in other burden on patients
countries
Central tendering in Maximized price erosion Reduced variability in Reduced variability Minimized co-payment
public reimbursement by delisting higher- drug prescribing in drug dispensing for patients
priced off-patent
competitors
International Reduced investment into Reduced impact of Incentives to Increased utilization of
nonproprietary name continued medical marketing and CME dispense the nonbranded generics
prescribing and generic education (CME) and activities on prescribers cheapest generic
substitution by marketing activities alternative
pharmacists
NA, not applicable.
348 VALUE IN HEALTH 18 (2015) 346–351
persistence of patients reduces direct pharmaceutical costs, the available treatments [51]. A similar approach can be used to
health status of patients without drug therapy can decline. Acute illustrate the value of generic drug policies, where the individual
schizophrenic events may increase the cost of inpatient care, and components that comprise value include cost, quality, and out-
therefore the cost-savings potential on the total health expendi- comes as demonstrated by a waterfall diagram (Fig. 2).
ture after patent expiry can be difficult to predict. Patent protection provides additional value for new original
To minimize such switching induced by generic substitution drug manufacturers compared with off-patent medicine manu-
policies, physicians may prescribe patented drug therapies to facturers. Two policy scenarios can be differentiated for off-
prevent stable patients with schizophrenia from switching patent drugs. In the first scenario with multiple criteria policy
back and forth among different generic drug formulations [50]. objectives, there would be more regulatory control on the bio-
In such cases, patients can stay on effective drugs without the equivalence criterion, and regulators often check product quality.
risk of substitution by pharmacists. This scenario results in Payers would not force patients to switch to the least expensive
potentially equal health gain with increased pharmaceutical generic drug. Therefore, patients can stay on the same off-patent
expenditure. drug formulations for longer periods, and their adherence and
The example of schizophrenia shows how persistence with persistence may remain more stable. This may lead to health
drug therapy after patent expiry influences the success of generic outcomes equal to those with original pharmaceuticals, without
drug policies in some chronic diseases (Table 2). an increase in nonpharmaceutical cost of care. This policy
scenario adds differential value to an alternative policy scenario
in which the maximization of generic drug price erosion serves
the only policy objective. The added value of the multiple criteria
Economic Value of Different Generic Drug Policies
policy scenario compared with the lowest price policy scenario is
The value of innovative pharmaceuticals depends on multiple that such methods can be country specific. Further local research
criteria that differentiate the innovator product from other is needed to quantify the potential magnitude of multicriteria
Fig. 2 – Example for multicriteria value assessment of chronic maintenance off-patent drugs. R&D, research and development.
350 VALUE IN HEALTH 18 (2015) 346–351
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