More competition. Stop the "package tenders" that favor the large producers who own both patented molecules and equivalents
Stop the "package" tenders, which suffocate in the cradle the "generic" drugs, based on molecules with already expired patents and therefore less expensive.
The warning comes from the Antitrust, which - in a report sent to Health, the State-Regions Conference and the Health Departments - warns of the effects of the tenders for the supply of medicines banned by the Local Health Authority and public hospitals "which allow companies to group the active ingredients subject to tender at their own choice".
The mechanism - it is obvious - guarantees considerable advantages to public companies: in addition to the discount on individual active ingredients, they manage to "snatch" an additional discount on the entire package. A bit like going to the market on Saturday, when it is closed, when the vendors prefer to dispose of foodstuffs "on a flat rate basis" that otherwise would not last over the weekend.
The beneficial effects for public finances - and therefore for citizens - are evident. But they represent a cleaver for those who exclusively produce drugs containing off-patent molecules and for market dynamics. "Genericist companies, even if they offer a discount on a single generic, will have little opportunity to prevail on an originator's offer relating to a package that includes patented drugs, for which there is greater room for maneuver on prices", comments the Competition and market Guarantor.
The possibility of offering mixed packages effectively allows the pharmaceutical companies holding patents to carry out "cross-subsidies between the prices of patented drugs and the prices of off-patent drugs", maintaining an overall competitive advantage over their generic competitors.
A detail that weighs. Especially in light of the latest estimates released by AIFA and industry associations: the expiry of patent coverage on high-consumption drugs should allow savings of between 400 and 600 million euros in 2008.
The lifeline proposed by the Antitrust?
Take advantage of "package" tenders by effectively "unpacking" supplies. «Yes» to separate packages – active ingredients under patent on the one hand, off-patent on the other – only if it is strictly indispensable. On the other hand, green light only for separate calls for tenders that group together active ingredients whose therapeutic function is shared within the scientific community (i.e. the same relevant market). An all-competition recipe, to get the maximum discount from everyone.
It remains to be seen what local health authorities and hospitals will think, which are still counting on traditional "package" savings. Sara Todaro – Il Sole 24 Ore of 12/01/2008 ECONOMY AND BUSINESS p. 18
