Generic Medicines Crisis: The Danger of a Supply Collapse

Sick people in our country could lose access to essential medicines such as Paracetamol and Metformin (a basic treatment for diabetes) due to legislative and administrative blockages, generic medicine manufacturers warn. They stress that the situation requires urgent interventions to protect both patients and the financial stability of the public healthcare system. "Bureaucracy cannot justify the loss of lives or financial resources," said Simona Cocoş, president of the Association of Generic Medicines Manufacturers in Romania (APMGR), calling on the Ministry of Health, the National Health Insurance House (CNAS) and the National Medicines Agency to simplify access to generic medicines.

• Effects of the EU Directive

According to the APMGR, the EU Directive on urban wastewater treatment imposes new taxes on medicine manufacturers, seriously affecting generic medicine factories in Romania. In particular, medicines such as Paracetamol and Metformin are threatened with extinction due to the additional costs imposed by this directive. "The directive could lead to the withdrawal of critical generic medicines, severely impacting the availability of Paracetamol and Metformin for patients," the APMGR press release states. Since manufacturers cannot increase prices, given the strict regulations of the Ministry of Health, they may decide to withdraw certain products from the market.

• Price hikes: an inevitable crisis

Paracetamol, not being subject to price regulation, could see a 45% price increase, a cost that patients would have to bear in full. For Metformin, the price would have to increase by 48%, but being a price-regulated medicine, manufacturers may have to withdraw it completely from the market, making it unsustainable. The same problem affects over 700 other low-priced, compensated generic drugs, which risk becoming unsustainable as a result of this European directive and the "clawback" tax.

• Clawback tax and the impact on the market

Starting with 2023, the clawback tax for generic drugs has been set at 15%, a value that is difficult to bear for low-priced drugs. APMGR states that from 2013 to 2020, over 2,000 generic drugs disappeared from the Romanian market, due to the economic unsustainability imposed by this tax. "In cost-volume contracts, CNAS mainly includes innovative drugs, and when their patents expire, generic drugs should automatically enter the compensated list. However, access to the compensated list is delayed by up to two years, causing additional expenses and the loss of the opportunity to treat more patients," APMGR emphasizes.

• The role of generic medicines in budget optimization

Generic medicines cover over 70% of patients' treatment needs and come to the market at lower prices than their innovative counterparts. The entry of these medicines into the market has brought savings of over one billion euros between 2016 and 2023, allowing CNAS to offer treatments to a significantly larger number of patients. For the period 2023-2028, APMGR estimates a budget optimization of 500 million euros by replacing innovative medicines with generics after patent expiration. However, the continuation of these savings depends on maintaining a legislative framework that supports patients' access to affordable medicines. APMGR emphasizes the need for urgent measures to avoid a major crisis in the supply of essential medicines. Simplifying access to generic medicines and adjusting price regulations are imperative to prevent patients from losing access to basic treatments, at a time when public health is a priority.