Switching from originator brand medicines to generic equivalents in selected developing countries: how much could be saved?

OBJECTIVES: In low- and middle-income countries, patients and reimbursement agencies that purchase medicines in the private sector pay more for originator brands when generic equivalents exist. We estimated the savings that could be obtained from a hypothetical switch in medicine consumption from originator brands to lowest-priced generic equivalents for a selection of medicines in 17 countries.

METHODS: In this cost minimization analysis, the prices of originator brands and their lowest-priced generic equivalents were obtained from facility-based surveys conducted by using a standard methodology. Fourteen medicines most commonly included in the surveys, plus three statins, were included in the analysis. For each medicine, the volume of private sector consumption of the originator brand product was obtained from IMS Health, Inc. Volumes were applied to the median unit prices for both originator brands and their lowest-priced generics to estimate cost savings. Prices were adjusted to 2008 by using consumer price index data and were adjusted for purchasing power parity.

RESULTS: For the medicines studied, an average of 9% to 89% could be saved by an individual country from a switch in private sector purchases from originator brands to lowest-priced generics. In public hospitals in China, US $ 370 million could be saved from switching only four medicines, saving an average of 65%. Across individual medicines, average potential savings ranged from 11% for beclometasone inhaler to 73% for ceftriaxone injection.

CONCLUSIONS: Substantial savings could be achieved by switching private sector purchases from originator brand medicines to lowest-priced generic equivalents. Strategies to promote generic uptake, such as generic substitution by pharmacists and increasing confidence in generics by professionals and the public, should be included in national medicines policies.