About generics
Generic medicines represent four out of five drugs prescribed by the NHS. These critical medicines are exact equivalents of existing originator (original) products and can be supplied to the NHS when the period of patent protection ends, known as loss of exclusivity. At this point, the NHS moves from paying one supplier's monopoly price to having a choice of manufacturers who compete for market share. The sudden injection of competition sees prices paid sharply tumble – often by as much as 90% – providing annual savings of more than £20 billion to the NHS budget. The more affordable medicines also mean that more patients can access treatments, and with more suppliers making medicines, the resilience of market supply is also improved.
Industry overview
The UK's generic industry is essential for access to affordable medication and underpins the NHS. Eight of the ten largest medicine suppliers to the NHS are generic manufacturers, which play a key role in ensuring early and affordable access to essential treatments.
Every day, more than 2.2 million off-patent generic and biosimilar prescription products are given to patients. Around a quarter of these medicines used in the UK are manufactured here. The UK's competitive market delivers the lowest medicine prices in Europe.
The current UK operating landscape is complex and challenging, with rising development and manufacturing costs and supply chain issues. The UK must now compete for global allocations of medicines, and therefore the environment needs to be conducive to attract manufacturers.
How generics save money
It takes more than a decade of research and clinical trials to develop an originator medicine. In recognition of this upfront investment, manufacturers are given exclusive rights to sell and market their new drug, typically for around 15 years, before the market is opened up to other manufacturers.
To recoup the development costs, the price of medicines during this period of exclusivity is often quite high. Once exclusivity is lost, other manufacturers can freely develop, manufacture and supply a medicine. Its generic versions are approved by the MHRA and are recognised as being equally safe and of the same effectiveness and quality as the more expensive, original medicine.
Because the development costs are lower, a manufacturer's selling price to the NHS is significantly reduced, especially if several suppliers enter the market and competition pushes prices down.
The UK has robust systems for pricing and reimbursement through both community pharmacy and NHS hospitals, encouraging the use of generic medicines. Manufacturers transparently provide their pricing and sales data every three months to DHSC as input to the NHS Drug Tariff, which is updated monthly.
Generic medicines for use in the hospital service are procured through regular competitive tenders. These mechanisms keep generics cost-effective for the NHS, patients and taxpayers.
Future outlook
Generic medicines play a pivotal role in ensuring the NHS has access to affordable medicines, meaning that more patients are treated, and often earlier. The UK generics and biosimilars industry is a well-regulated, competitive market that supports the NHS through significant cost savings and widened access to life-saving and life-changing medicines. In developing its medicines, the industry invests significantly in innovation, enhancing products and creating patient-friendly devices that are complemented by personalised patient support services.
Generic and biosimilar medicines and patented medicines are pieces of the same puzzle and essential for a sustainable NHS, necessitating a regulatory and operating environment which allows them both to thrive.
In the next five years, more than 250 products will lose their exclusivity. This will generate billions of additional savings on top of the annual £20 billion savings currently in place. However, for the UK to continue benefitting from a resilient and competitive off-patent market, the government must deliver a dedicated strategy for the off-patent sector that includes a supportive policy environment.
