Health service’s £1bn patent expiry windfall
pharmafile | October 14, 2011 | Feature | Sales and Marketing | generics, patent expiry
Patent expiries could shave £1 billion from the NHS drugs bill, and could yield major savings by 2015 for the NHS in England.
The health service will enjoy the windfall in savings from its medicines bill over a three-year period, thanks to pharma’s wave of patent expiries.
More than 50 major branded drugs will go off patent from the beginning of this year up until December 2013.
NHS data shows that primary care prescribing in England cost the NHS £1.36 billion in 2010, but the arrival of generics in the future could cut this bill substantially.
Over half the cost comes from just six treatments: Lilly’s Zyprexa, Novo Nordisk’s NovoRapid, Pfizer/Eisai’s Aricept, Takeda’s Amias, AstraZeneca’s Seroquel, and Pfizer’s Lipitor.
Together these drugs cost the NHS in England over £725 million last year, and represents 8% of the total £8.83 billion spent on primary care drugs for 2010.
Generic versions for remaining treatments are already lining up, with their price likely to be around 70 – 90% cheaper than their branded equivalents.
A generic form of Zyprexa is already available, after being approved by the European Medicines Agency in March this year.
But even though these drugs began to lose their patent protection in 2011, it will not be until 2015 that the real savings from generics can be made, as both doctors and patients will not make the switch automatically.
Doctors will be under pressure to do so, however, as the NHS is currently seeking to make £20 billion in savings by 2015, and the man in charge of this target, Jim Easton, will be reminding managers how they can make major savings by making these changes.
Chief executive of the ABPI Stephen Whitehead said: “If you look at these major patent expiries and what’s coming up in the pipeline, then you can see that the NHS can make significant savings.”
He said that these savings can also be realised quickly as: “We [the UK] have one of the most efficient generics market so as soon as a patent is gone, the price collapses and the generic uptake is huge.”
Whitehead added that there would also be greater use of certain drugs, such as statins, once they have gone off patent, meaning the NHS will enjoy a greater uptake at a lower cost.
The ABPI has been speaking with Jim Easton, head of the Department of Health’s QIPP cost and productivity drive, which aims to squeeze out efficiencies throughout the health service, including prescribing.
The ABPI say the Department of Health acknowledges that the expiries represent significant savings for the health service, and knows it is down to the NHS to maximise savings from this process.
Despite this, no one in UK pharma will believe the government will be satisfied with these savings, and new cost saving measures (such as Avastin in AMD) continue to spring up as financial pressures mount in the health service.
A TABLE OF UK PATENT EXPIRIES (2011-13) IS AVAILABLE HERE.
Notes on the figures:
The cost data is from the Prescription Cost Analysis report for drugs prescribed in primary care in NHS England for 2010.
The table does not include prescribing data from secondary care in NHS England, which is published separately.
*Plavix (clopidogrel) is not due to lose its patent until 2013, but generic forms of the drug have been approved by the European Medicines Agency since 2009. Generic companies exploited a loophole in the drug’s patent that allowed early genericisation.
In England, this has already hit sales of Plavix hard: in 2010 the brand lost £90 million worth of sales, giving the NHS in England earlier savings from the drug.
Related Content
Leading pharmaceutical companies sued in US for conspiring to drive up generics prices
26 pharmaceutical companies are being sued by most US states for allegedly conspiring to reduce …
Trump signs deal with generics company Phlow Corp to help shift drug manufacturing to the US
The Trump administration will sign a $354 million deal with the generics company Phlow Corp …
How the intended role of generic medicines is being undermined in America
The introduction of a generic medicine should, in theory, incentivise companies to lower the price of …
