Thursday 25 October 2012

‘No-brainer’ inevitabilities...Generic medicine prices in Ireland

Radical changes overdue
With generics = 5% of the €1.85bn drug bill in Ireland vs. 80% in the UK (Dail Questions: Reilly, 25th Oct 2012), and generics prices in Ireland = 2% less than branded prices but 12 times UK generics prices, we would suggest it is inevitable that:
  • The government will legislate to increase generics usage to something approaching the UK %
  • Prices of generics will then be forced down to levels comparable with the UK (think legislation or encouragement of parallel importing, or both)
In other words, on current levels of consumption, a 50/50 split of generics and branded, and generics pricing being reduced even by 50%, the annual drug bill will be reduced to €1.4bn, minimum…

Time for a ‘what if’ on the sales impact of matching UK levels (generics usage = 80% and generics prices reduced by 92% )?

NB. What does this mean for those outside the market?
The above is an example of a market anomaly, with change becoming inevitable when you run the numbers, hopefully leading to better business forecasting. We shall include ‘no-brainer’ inevitabilities as a regular feature of KamBlog, to help clarify the obvious in unprecedented times.
All suggestions welcome!

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