Generic brands seen lowering prices of other prescription drugs, says study
An increase in the number of generic drugs in the local market reduces the price of all types of prescription drugs in the market, highlighting the benefits of the presence of these pharmaceutical products touted by the government as more affordable yet equally effective.
This is according to a policy paper issued on Friday by the Philippine Competition Commission (PCC), which focused on a local market study that looked at the effect of the entry of generic drugs on the local prices of drugs.
“The findings are consistent with the literature that the increase in the number of generic drugs in the market reduces the price of all types of prescription drugs. This is true for branded generics,” concluded the policy paper.
“Consumers will benefit from the increase in the number of generic players in the market,” it added.
Entry of drugs
The study drew its conclusion from quarterly data by US health information technology and clinical research firm IQVIA, covering the years 2000 to 2020, which included the local sales of antidiabetes, anti-infectives, cholesterol and hypertension medications.
The policy paper said that for all types of drugs, an increase in the number of branded nonoriginators in the market decreased the price of originators and unbranded nonoriginators.
Article continues after this advertisementOriginators are those that were manufactured by the original patent holder of a particular drug.
Article continues after this advertisementBranded generics
“Branded nonoriginators compete with originators and unbranded nonoriginators. The effects of the number of branded nonoriginators are statistically significant,” according to the policy paper.
“One explanation is that in a sector where there is asymmetry in information on the quality of prescription drugs and significant distrust on the quality of generic drugs, branded generics present a cheaper alternative to originators,” the paper said.
The PCC-issued policy paper recommended that generic drug substitution policies should be enforced to introduce consumers to generic drugs.
