The Pharmaceutical Market: Italy ; The provision of health care in Italy, in common with other western European countries, is advanced, with universal access. Being initially based on the NHS-model of the UK, the Italian health service is also facing similar scenarios, most notably efforts to restrain rising costs.
The size of the population ensures that the Italian pharmaceutical market remains the fourth largest in Europe despite the market having the lowest growth rate of all the developed economies. Whilst the overall population is declining, the ratio of those over 65 years of age has already reached 20.3% and is set to rise still further with a corresponding increase in chronic and long term medical conditions. This will inevitably increase demand for pharmaceutical products, placing additional financial strain on the working population to support those of pensionable age. However, cost containment measures are restricting growth in the pharmaceutical market, particularly the retail pharmacy market.
In June 2010, a decree law introduced austerity budget measures that included reimbursement limits for off-patent drugs, generic drug price cuts and a requirement for doctors to prescribe the cheapest equivalent drug. The measures proposed reductions in wholesaler margins and in the pharmacy share of the end-user price, thereby reducing the price pharmacies charged the national health service. A subsequent amendment reduced the pharmacy price cut from the proposed 3.65% to 1.82%; this was passed by the senate in July 2010. To compensate for this change, drug manufacturers will be required to pay 1.83% of the price of their drugs to the regional health authorities.
Since the introduction of a reference pricing system in 2001, the market share of generic drugs has grown steadily but remains below the European average. The industry association estimated that generics accounted for 5.9% of pharmaceutical sales by value and 10.8% by volume in 2009. In 2009, sales of unbranded generics declined by 5.6% in value terms, although they increased by 6.2% in volume. The government´s austerity measures encourage greater generic substitution in an effort to reduce the overall cost of the drugs bill. This will, in turn, increase the market share of generic drugs in the coming years.
The size of the population ensures that the Italian pharmaceutical market remains the fourth largest in Europe despite the market having the lowest growth rate of all the developed economies. Whilst the overall population is declining, the ratio of those over 65 years of age has already reached 20.3% and is set to rise still further with a corresponding increase in chronic and long term medical conditions. This will inevitably increase demand for pharmaceutical products, placing additional financial strain on the working population to support those of pensionable age. However, cost containment measures are restricting growth in the pharmaceutical market, particularly the retail pharmacy market.
In June 2010, a decree law introduced austerity budget measures that included reimbursement limits for off-patent drugs, generic drug price cuts and a requirement for doctors to prescribe the cheapest equivalent drug. The measures proposed reductions in wholesaler margins and in the pharmacy share of the end-user price, thereby reducing the price pharmacies charged the national health service. A subsequent amendment reduced the pharmacy price cut from the proposed 3.65% to 1.82%; this was passed by the senate in July 2010. To compensate for this change, drug manufacturers will be required to pay 1.83% of the price of their drugs to the regional health authorities.
Since the introduction of a reference pricing system in 2001, the market share of generic drugs has grown steadily but remains below the European average. The industry association estimated that generics accounted for 5.9% of pharmaceutical sales by value and 10.8% by volume in 2009. In 2009, sales of unbranded generics declined by 5.6% in value terms, although they increased by 6.2% in volume. The government´s austerity measures encourage greater generic substitution in an effort to reduce the overall cost of the drugs bill. This will, in turn, increase the market share of generic drugs in the coming years.
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