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

Abstract

Little is known about how the different policies available to promote use of generic medicines affect the price per unit supplied or sold. This study compares the influence of pricing policies for generic medicines on atorvastatin prices in Australia, New Zealand, the Republic of Korea and Singapore, after market entry of generic atorvastatin. The annual price of atorvastatin per defined daily dose supplied (price/DDD) was examined for each country from 2006 to 2015 (≥2 years before and ≥4 years after generic market entry). Prices were converted to international dollars and cumulative percentage price reductions were calculated for the first 4 years following generic entry. 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 entry in all countries except New Zealand, which already had low prices. The largest immediate decrease was observed in Singapore (46%, year 1). By the fourth year after generic entry, the price had fallen by 46-80% in all countries; however, large price differences between countries remained. New Zealand's tendering system and use of preferred medicines resulted in very low atorvastatin prices well before patent expiry. Pricing policies in the other three countries were effective in reducing atorvastatin prices, with reductions of between 46% and 80% within 4 years of generic entry. Where tendering and use of preferred medicines were the mechanisms for atorvastatin procurement (New Zealand), prices were lowest before and after generic entry. Mandatory price cuts, combined with price-disclosure policies (Australia), produced similar relative price reductions to tendering systems (New Zealand, Singapore) at 4 years. By comparison, mandatory price cuts upon generic entry as the sole measure, while initially effective, were associated with the smallest relative reduction in price after 4 years (Republic of Korea).