The impact of generic entry and price competition in Jordanian public health sector

Abstract

Objectives Generics as widely considered a major tool to control escalating drugs' expenditures. The objectives of this study were to evaluate the impact of generic participation on the bidding prices of originators participated in annual tenders in Jordan (2009–2011) and role of local generics in reducing pharmaceutical expenditures. Methods Data were collected from the Jordan Joint Procurement Department (JPD) website. The difference between bidding prices of originators before and after generics participation was estimated. All prices evaluated in this study were postpatent price. Savings associated with local Jordanian generics was estimated by comparing the price of originators competing against winning local Jordanian generics. Results A total of 17 tenders were reviewed between June 2009 till July 2011. Generic participation in the tendering process lowered the bidding prices of the originators. This contributed to saving of 77 million JDs in 2010 and 15 million JDs in 2011. The bidding prices of originators on average reduced by 11% when competed with generics. Local generics contributed to significant reduction in pharmaceutical expenditures, this contributed to savings of 25 million JDs in 2009–2010. Conclusions Generics entrant resulted in almost 10% reduction in originator competitors, the substantial savings contributed by local generics leads focus on adapting generic substitution and switching private sector purchases to higher generic uptake recommending that policy makers and local manufactures to maintain high production quality, increase confidence in generics and promote their acceptance by professionals and patients.