March 4. 2024. 11:45

The Daily

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Spanish generics, biosimilars industry calls for ‘guaranteed profitability’


Leading representatives of the generic and biosimilar pharmaceutical industry in Spain have alerted authorities of the damage they are suffering due to the low prices of their drugs.

They are calling for their profitability to be guaranteed to continue saving resources for the National Health System (SNS) and, ultimately, to protect patients.

According to data from the Organisation for Economic Co-operation and Development (OECD), the selling price of medicines in Spain is around 16% lower than the European Union (EU) average. While in December 2009, the average cost per prescription was €13.39, it has now fallen to €10.81, almost 20 % less than ten years ago, according to the international organisation.

To mitigate pharmaceutical costs, the Spanish Ministry of Health has lowered the reference prices of more than 1,000 drugs, some of them included in the lists of medicines considered “essential and strategic” by the World Health Organisation (WHO) and the Spanish Agency for Medicines and Medical Products (AEMPS).

The strong impact of inflation

The minimum reference price has been set at €1.60 (previously €1.80), with some drugs priced even below the threshold, which, according to the generics and biosimilars industry, is close to the limit of profitability.

In interviews with EuroEFE, the managers of two key players in helping to guarantee the financial sustainability of the health system, generic drugs and biosimilars, warn of the risk to some drugs if a minimum profitability threshold is not maintained.

The Director General of the Spanish Generic Medicines Association (AESEG), Ángel Luis Rodríguez de la Cuerda, defends the “social usefulness” of generic medicines, thanks to which, he says, the health system coffers achieve substantial savings.

“Generic drugs produce very considerable savings for the National Health System in pharmaceutical costs of at least 40% and contribute to wider patient access to medicines,” he told EuroEFE.

However, the expert considers that, in the current complex inflationary context, among other factors, from the war in Ukraine, in order to guarantee the continuity of generics, “it is urgent to be able to raise prices somewhat”.

“Despite the fact that generics are medicines of the same quality, efficacy and safety as their brand-name counterparts and that we are endorsed by AEMPS and the European Medicines Agency, we are currently suffering from the problem of low prices,” said the head of AESEG, which represents 95% of the companies in the sector in Spain.

The generics industry in Spain, directly and indirectly, employs around 40,000 people. It has 20 manufacturing plants throughout the country, invests 27% of its profits in innovation and development, and exports 30% of its products mainly to other EU countries, according to AESEG data.

A ‘minimum threshold’ of profitability

He said the average price of generics in Spain is around €3.50, but almost 50% of all generics are priced at €1.60 or less.

“We are being hit by several external factors. Since the pandemic and for the last year with the war in Ukraine, the price of energy, transport and raw materials has skyrocketed, and all these elements have had a powerful impact on generics, which already have lower prices. In addition, the situation has been aggravated by the unstoppable rise in inflation,” he said.

Biosimilars (the equivalent of generics for branded biological drugs) share the same problems, although there are notable differences in several aspects, Encarnación Cruz, general manager of the Spanish Association of Biosimilar Medicines (Biosim), told EuroEFE, while highlighting the benefits of this type of drug.

“They were a turning point in the treatment of certain pathologies. For example, a cancer patient whose treatment possibilities had previously ended, today (with biological drugs) can see their life expectancy significantly prolonged, and in some cases even cured,” said Cruz.

However, she points out that “these are very expensive drugs, costing almost €100,000 (in some cases), and that limits their use considerably.”

On the other hand, Cruz stressed that biological and biosimilar medicines are “the future”, as 71% of all drugs approved by the European Medicines Agency (EMA) in 2021 were biological.

“Unlike generic drugs, which suffer two price decreases (after their authorisation, and then annually with the state regulatory setting of reference prices), biosimilars suffer a third decrease,” she said.

She noted that the authorisation of a biosimilar by the EMA and prior to marketing in Spain, the Interministerial Commission sets the price at which it will be financed by the National Health System.

“There is no fixed rule for determining the discount to be applied to biosimilar medicines, but the most common is that the financing price of the biosimilar is 20-30% lower than that of the original. This is the price that will be used for sale in pharmacies,” Cruz said.

In her opinion, although biosimilars have, among other objectives, to contribute to the sustainability of the NHS, it should not be forgotten that, for the industry, their production has to be minimally profitable.

“If we break the profitability threshold, they (biosimilars) may disappear from the market. For example, the pharmaceutical industry may no longer be interested in developing a biosimilar. And, in the end, the biggest problem will be for patients,” Cruz warned.

In Spain there are only 11 production centres for biological drugs, and of these, only two manufacture biosimilars, she explained, urging the Spanish authorities to invest more in the sector.

Increasing generics’ price

In the case of generics, one of the possibilities for preserving their profitability would be “to be able to increase prices by at least 10%.”

“We are not alone in this. Countries like Portugal have developed a rule that all medicines under 10 euros will have a 5% increase. That is an important relief,” said Rodríguez de la Cuerda.

The price of pharmaceuticals in Spain has evolved very differently from the consumer price index set by the National Statistics Institute (INE).

In this sense, the Spanish pharmaceutical industry, which is part of Farmaindustria, stresses that, rather than economic aid, it would be necessary to change the current regulation so that factors such as inflation do not have such a negative impact on the sector.

One solution could be to exclude strategic drugs from reference prices, as this would make it “easier to guarantee their supply”, according to Farmaindustria sources.