Part of a total healthcare solution
A strong and successful generics business plays an increasingly important role in the overall Novartis strategy of offering a range of medicines to patients, physicians and healthcare providers worldwide.
For governments and payors, the use of generics can also free up capital for more innovative treatments.
In the UK, for example, 55-60% of the National Health Service drug volume is dispensed as generics, but accounts for just 10% of total drug expenditures. In essence, generics enable 90% of drug spending to fund innovative new products.
Further, a study by the US Department of Commerce examined drug-price regulatory systems in 11 OECD (Organisation for Economic Co-operation and Development) countries that rely on some form of price controls to limit spending on pharmaceuticals. The study found that the regulatory restrictions had enabled the countries to save USD 27 billion on patented medicines.
Understanding generics
Generic pharmaceuticals are the bioequivalent of innovative, brand name products. This includes dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. Generics are held to the same strict standards as the innovator product, dictated by the US Food and Drug Administration (FDA) and other regulatory agencies throughout the world. Although generic pharmaceuticals are chemically identical to their branded counterparts, they cost less for consumers because they do not require initial basic and clinical research programs.