Generics will not cut medicine bill, says Teva chief

Ireland's medicines bill will continue to rise despite efforts by the Minister for Health to cut the cost by increasing the use of generics, the head of the largest player in the Irish market has warned.

Generics company Teva Pharmaceuticals is now the largest supplier of medicines by volume in Ireland. Moves to cut the escalating cost of drugs by introducing generic substitution for branded products alongside reference pricing have seen it overtake long-time industry leader Pfizer, although the US company still leads in term of the value of its sales.

But country general manager Sandra Gannon says policymakers cannot rely on generics to deliver ongoing savings in the long term.

“We have seen savings from last year, meaningful savings,” Ms Gannon said, but she also noted that demand for medicines had risen 2 per cent last year alone. That triggered a €60 million increase in the HSE drug bill in 2013 despite the savings accrued through the increased use of generic medicines.

An ageing population, living longer and with access to more and more innovative drugs will place “inexorable upward pressure” on the State’s overall drug bill, she believes.

"I don't believe we can continue to make savings and give access at the same time and to continue to expect the generics industry to drive any savings," Ms Gannon said in an interview with The Irish Times. "As the reference pricing model becomes more mature and more products enter into that system, the savings are pretty much harnessed, the patent cliff has fallen and really the opportunities to make savings in that area are going to be less and less.

“A lot of those savings have already been made.”

And as Teva new global chief executive Erez Vigodman announced plans for increased focus on biosimilars – post-patent versions of newer, more complex biologic drugs – Ms Gannon called on Ireland to move to establish itself as a centre for this growing industry sector.

“It would be nice to see,” she said. “There is no advocacy for biosimilars , there is no policy in biosimilars. If you look at patents, the next big raft of patent expirations are all in biologics. That needs to be addressed.”