| |
New Survey Reveals Sharp Contrast in Pricing Trends for Patent and Generic Drugs in Mexico
26 Mar 08
A new survey reveals that the average price of patent medicines purchased by public sector institutions in Mexico has declined by 11.3% over the past two years, while the price of generics has risen by 11.8%.
Global Insight Perspective | | Significance | A new survey by the Institute of Pharmaceutical Research and Innovation reveals that the average price of patent medicines purchased by public sector health institutions has declined by 11.3% over the past two years, while the average price of generics has increased by 11.8%. | Implications | The publication of the survey coincides with government plans to make savings of up to US$500 million by creating a new commission to negotiate the price of patent drugs in the public sector. The irony is that the commission will make no attempt to reduce the price of generic, over-the-counter (OTC) or private sector drugs, despite the fact that these areas have seen comparatively high price increases in recent years. | Outlook | Patent drug manufacturers are attempting to persuade the government to introduce new measures to counterbalance the creation of the new commission. In particular, manufacturers are petitioning for a higher volume of sales in the public sector, and for longer-term guaranteed contracts. |
The survey—whose results were published in the Reforma newspaper—also revealed that the price of innovative medicines now subject to generic competition declined by an average of 17% over the same period. Between 2006 and 2007, the average price of patent medicines purchased by the Mexican Institute of Social Security (IMSS), the ISSSTE (the insurance scheme for civil servants) and the Health Secretariat fell by 43 pesos to 338 pesos (US$31.59) per unit. In the case of the ISSSTE, the average unit price of patent medicines plunged from 516 pesos to 93 pesos between 2006 and 2007, while over the same period the average unit price that the ISSSTE paid for generics rose from 24 pesos to 42 pesos. For the IMSS, the average unit price of patent medicines rose by 0.22% in 2007, while the average price of generics fell by 4.87%. For the Health Secretariat, however, the average unit price of patent medicines shot up from 380 pesos to 645 pesos. Public Health Institutions Spend Small Proportion of Budget on Patent Medicines The price of patent medicines actually has a relatively small effect on the spending patterns of public health institutions, given that these products account for only 7.2% of their overall drug budget. 62% of the public sector drug budget goes on purchasing generics, while 5.5% goes on purchasing innovative drugs (see table). Public Sector Medicines Market 2007* | Drug Class | Units (%) | Cost(%) | Generic | 88.50 | 62.0 | Innovative** | 0.89 | 5.5 | Patent | 0.57 | 7.2 | Unidentified | 9.90 | 25.2 | * Includes purchases via auctions held by the IMSS, ISSSTE and Health Secretariat
** Innovative medicines that are now sold alongside generic equivalents
Source: Institute of Pharmaceutical Research and Innovation, Reforma |
Outlook and Implications Despite the relatively small role played by patent medicines in the public sector and the trend of declining prices, the government is still determined to create a new Co-ordinating Commission for the Negotiation of Medicine and other Health Supplies, which is aimed at driving down the price of patent medicines in the public sector (see Mexico: 14 February 2008: Creation of Mexican Price Commission Imminent). Industry sources have been quick to point out the irony of the situation, given that the new pricing commission will make no attempt to drive down prices for generics, over-the-counter (OTC) drugs and drugs sold in private pharmacies, despite the fact that these three sectors have experienced the biggest price rises over recent years. Julio Portales, Novartis's (Switzerland) vice-president of corporate affairs, is one of several industry figures who has been calling on the government to dispense with the pricing commission and to instead make savings by increasing the volume of its patent drug purchases (see Mexico: 20 March 2008: New Calls to Permit Foreign Drug Distributors in Mexico). The industry is also seeking guaranteed orders and the possibility of purchase contracts that last for several years, in order to help offset the impact of the pricing commission—which is expected to save the public sector up to US$500 million (see Mexico: 25 February 2008: Mexico's New Price Commission Predicted to Make Savings of US$464 mil.).
|
|
|
