Regulatory Issues
No Immediate Change to Generic
There will be no immediate action to amend the Medicines legislation in relation to generic substitution. However provisions to enable pharmacists to substitute without authorisation, provided substitution only occurs using a medicine deemed to be interchangeable with the brand prescribed, will be incorporated into the new Therapeutic Products draft legislation (currently awaiting a place on the legislative programme).
Public consultation results in divided support
Safety concerns not justified for ‘interchangeable’
medicines
No immediate change in generic substitution regulations
Last year the Ministry sought opinion on the potential cost savings and overall public benefit from permitting generic substitution at pharmacy level, without the authority of the prescriber. Comment was also sought on the proposal that, as a safeguard for consumers, substitution might only be allowed if the two brands of medicine were listed as being interchangeable (see article entitled ‘Generic substitution - are changes ahead?’ in Prescriber Update No. 14, February 1997).
Public consultation results in divided support
Analysis of the 78 submissions received showed no consistent or overwhelming support for, or opposition to, the proposal to allow pharmacists to substitute without prior authorisation. Forty-seven percent of the submissions were in favour, 35% against and 19% stated no preference.
Medical organisations: Opposed the proposal citing fear of patient confusion and reduced compliance, concerns with the quality and bioavailability of generics, and concern about unwarranted interference in the consultation process between the doctor and patient.
Pharmacy organisations: Supported the proposal because it would lead to more cost effective dispensing through better stock control and rationalisation of stock lines. Consumers would benefit as there would be no delay obtaining brands not normally stocked or obtaining an authority to substitute from the prescriber. It was recognised that generic substitution would require extra time for the pharmacist to explain the substitution and obtain consumer consent if this was a requirement.
Consumer groups: Two thirds supported the proposal, provided substitution only occurred with those medicines listed in the "Interchangeable Multi-source Medicines" booklet. Consumers perceived that substitution would lead to cost savings to both themselves and the government. Opinion was divided as to whether confusion could result if the appearance of medication changed due to brand substitution. Some consumers considered it was the prescriber's responsibility to decide which brand should be prescribed and dispensed.
Pharmaceutical companies: Of those that responded, two generic companies supported the proposal and two research-based companies opposed it. The pharmaceutical industry organisations were similarly divided.
Generic companies see opportunities for greater sales volumes leading to more profitable market entry and increased price competition. They also see that generic substitution would enable companies to recoup the investment made in having their products included in the Interchangeable Multi-source Medicines booklet.
Research-based pharmaceutical companies recognise that generic medicines, introduced following an adequate patent term for the innovator, have a valid place in the market. They are, however, opposed to special advantage being conferred upon any particular category of products, such as generics, at the expense of the principles of free and fair competition.
RHAs & IPAs: Three of the 4 RHAs responded, two opposing the proposal and one unable to support or commit to any proposal. Nine IPAs responded with only one supporting the proposal. The IPAs felt that generic substitution at pharmacy level could negatively impact on their ability to enter into contractual arrangements with pharmaceutical companies. It was felt that generic substitution, encouraged through bonuses and other incentives for pharmacists, financially benefited only the pharmacist.
PHARMAC: Supported the proposal on the grounds that it would have significant benefits to both RHAs and IPAs. PHARMAC stated that a substantial share of the efficiency gains generated over the past three years can be attributed to price reductions resulting from the entry of generic products into the market. As wider generic substitution would increase the market potential for generic medicines, it would also enhance the effectiveness of existing price/volume contracts and provide opportunities for greater use of such contracting strategies. The submission noted that these initiatives have met with professional resistance, and progress towards their implementation has been slow. It was also stated that contractual arrangements would be unlikely to cover all prescribers or pharmacists, so that a regulatory regime for generic substitution may be a more effective way of achieving the desired cost savings. Generic substitution would not undermine the development of preferred medicines lists, since prescribers wishing a particular brand to be dispensed could annotate the prescription with "no substitution".
Safety concerns not justified for ‘interchangeable’ medicines
Medsafe believes that prescribers and pharmacists can be confident that patients will not be adversely affected when medicines on the list of interchangeable medicines are substituted. Therefore it is no longer reasonable on safety grounds to require a pharmacist to obtain the authority of the prescriber before undertaking generic substitution from the medicines on the list.
No immediate change in generic substitution regulations
The Minister of Health has decided that there will be no immediate action to amend the Medicines Act 1981 and Medicines Regulations 1984 in relation to generic substitution.
New provisions relating to generic substitution will instead be incorporated into Regulations under the new Therapeutic Products draft legislation currently awaiting a place on the legislative programme. These provisions would enable a pharmacist to substitute another brand of medicine without the authority of the prescriber, provided substitution only occurred using a medicine deemed to be interchangeable with the brand prescribed.