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Generic and Biosimilar Medications

Value

The UK generics industry is the engine room behind a virtuous circle of innovation and cost containment. Each year more than 1 billion items are prescribed generically in England and Wales, unlocking significant savings for the NHS. As well as delivering cost savings, generics also provide value through a number of means, not least by widening accessibility.

Generic and Biosimilar Medications

Promoting innovation

Competition between multiple suppliers of generic medicines rapidly reduces market prices at patent expiry, frequently by more than 90%.

 

By reducing the drugs bill to this extent, the use of generics by the NHS allows more patients to be treated with the same product. It also creates 'headroom' within the medicines budget to pay for future innovative products and the investment needed to develop them. Finally, it allows the NHS to use the savings elsewhere in the healthcare system.

 

By providing competition with the originator's product at expiry of the relevant patents or other exclusivity, generics also promote innovation. Without the onset of generic competition, which significantly reduces the originator's revenue from a product, there would be much less of an incentive to develop new treatments for unmet need.

 

 

Reinforcing resilience

From time to time, all medicines suffer from a shortage of supply due to reasons outside the manufacturer's control: these typically relate to active pharmaceutical ingredient or other raw material shortages; manufacturing difficulties, including quality concerns; logistical difficulties; or unexpected demand.

 

For the sole supplier of an exclusive (e.g., on-patent) product, these difficulties will usually have an immediate effect on the manufacturer's ability to supply. In the case of a generic product, there will usually be other suppliers of the same medicine which can make up any shortfall.

 

While the use of a generic or biosimilar is important in delivering cost containment and enhancing patient access to treatments, market resilience underpinned by a multi-source competitive supply chain is also a critical benefit and of significant value to the safe supply of NHS medicines.

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