Pricing policies for generic medicines in Australia, New Zealand, the Republic of Korea and Singapore: patent expiry and influence on atorvastatin price

ABSTRACT

Background Little is known about how the different policies available to promote use of genericmedicines affect the price per unit supplied or sold. This study compares the influence of pricingpolicies for generic medicines on atorvastatin prices in Australia, New Zealand, the Republic of Koreaand Singapore, after market entry of generic atorvastatin.Methods The annual price of atorvastatin per defined daily dose supplied (price/DDD) was examinedfor each country from 2006 to 2015 (≥2 years before and ≥4 years after generic market entry). Priceswere converted to international dollars and cumulative percentage price reductions were calculated forthe first 4 years following generic entry.Results Prior to market entry of generic atorvastatin, New Zealand had the lowest price ($0.10/DDD),and the Republic of Korea the highest ($2.89/DDD). The price/DDD fell immediately after generic entryin all countries except New Zealand, which already had low prices. The largest immediate decreasewas observed in Singapore (46%, year 1). By the fourth year after generic entry, the price had fallen by46–80% in all countries; however, large price differences between countries remained.Conclusion New Zealand’s tendering system and use of preferred medicines resulted in verylow atorvastatin prices well before patent expiry. Pricing policies in the other three countries wereeffective in reducing atorvastatin prices, with reductions of between 46% and 80% within 4 years ofgeneric entry. Where tendering and use of preferred medicines were the mechanisms for atorvastatinprocurement (New Zealand), prices were lowest before and after generic entry. Mandatory pricecuts, combined with price-disclosure policies (Australia), produced similar relative price reductions totendering systems (New Zealand, Singapore) at 4 years. By comparison, mandatory price cuts upongeneric entry as the sole measure, while initially effective, were associated with the smallest relativereduction in price after 4 years (Republic of Korea).