What do generics have to do with insurance contributions?
The financing of the German health care system works in such a way that all insured persons pay into a pot. The money that comes together in this way must be enough for all the treatments of the insured. Some therapies, however, are very expensive, sometimes requiring expenditures in the millions. It is good that there are generic medicines that keep the costs for the majority of pharmaceuticals low and still guarantee the very best quality and safety.
Crucial for the patients: If the expenses for the health ensurers are higher than the income, the health insurance contributions have to be increased. To prevent this from happening, generic medicine is used whenever possible. This curbs costs – also for the insured.
What distinguishes a generic medicine from its reference medicine?
A generic medicine is available for patients in all pharmaceutical forms – as pills, juices, creams, sprays etc. Although name, colour and form of the generic medication can differ, the impact and effects on the body are equivalent and not affected by these distinguishing factors, since the API they contain is identical to that of the original pharmaceutical.
Which illnesses can be treated with generics medicines?
The range is very broad since they are available for treatment of a huge variety of illnesses and ailments, including widespread diseases such as asthma, high blood pressure, diabetes and osteoporosis. Furthermore, the majority of pharmaceuticals used in the treatment of several severe cancers are generics medicines. Of course, for many treatments for occasional minor health complaints such as heartburn or itching after an insect bite, a generic pendant exists. The World Health Organisation (WHO) List of Essential Medicines contains almost exclusively generics medicines.
How many generic medicines are there?
For nearly every API that is no longer patented, there is at least one generic pharmaceutical. Almost 79 per cent of the entire demand for pharmaceuticals in Germany – from pain medication which has proved effective over the last decades to modern cancer drugs – is supplied by generics manufacturers, and the tendency is still rising. There are APIs, such as, for example, the painkiller Metamizole and the antihypertensive Ramipril, for which up to 99,8 per cent of prescriptions are for generics medicines. Most tellingly, the 79 per cent of pharmaceuticals demand in Germany met by generics account for merely 9 per cent of the annual total of health insurance spending.
Is the substitution of the original with the generic version safe?
Yes! After passing the registration and authorisation processes of the respective state authority – Federal Institute for Drugs and Medicinal Products (BfArM) in Germany, or its European counterpart, the European Medicines Agency (EMA) – it is officially proven that the generic version of a pharmaceutical contains the identical API with the same effectiveness and adhering to the same high quality standards for pharmaceuticals.
How much do generic medicines generally cost?
As previously mentioned, they are significantly cheaper than their reference medicines. The average price that the manufacturer in Germany receives per defined daily dosis (DDD) (before considering any type of price reduction) amounted in the year 2019 to 4,18 euros for patented pharmaceuticals, and only 0,17 euros for generics (after considering discount agreements even less – only 6 cents per DDD).
Generally speaking, the more manufacturers there are for a certain generic medicine, the lower the price thereof on the market.
Why are generic medicines so much cheaper?
The main reason for the low costs is that generic pharmaceuticals do not have to be developed completely from scratch. After patent protection expires, it can also be manufactured by other manufacturers. This cost advantage can be passed on to the patients and the public health care system by the manufacturers. This means, more people can be supplied with important pharmaceuticals.
Another important factor leading to substantial cost savings is the aspect of competition on the pharmaceutical market. Frequently, several different generics manufacturers offer the exact same pharmaceutical. More suppliers mean more variety and thus lower prices.
Why do patients sometimes get one pill from one manufacturer, sometimes a different one?
In Germany, this is mainly due to so-called Rabattverträge (literally: rebate contracts) between health insurance providers and pharmaceutical manufacturers. During the time agreed upon in the contract, only one specific manufacturer (or a few selected manufacturers) gets to supply the patients insured by the respective provider. If the contracting party or parties, of one such contract changes, patients insured with that provider will receive the identical pharmaceutical but from another manufacturer. The API, however, is always the same. If there are no rebate contracts for a pharmaceutical, the pharmacist can decide which preparation from which manufacturer to dispense.
Can patients also get generic versions of over-the-counter medicines?
Yes! When buying a preparation that is available without a prescription but is required by pharmacies – such as the painkiller paracetamol – patients can ask directly for a generic or a cheaper alternative. Such medicines are called OTC preparations – because they are sold “over the counter”.
In the case of prescription medicines, the patient can ask the doctor to prescribe the active ingredient in generic form. The doctor can then tick the “aut idem” box on the prescription and the pharmacist must then dispense exactly these medicines (and not a cheaper alternative).
