Demand-side Policies to Encourage the Use of Generic Medicines

An Overview

Pieter Dylst; Arnold Vulto; Steven Simoens


Expert Rev Pharmacoeconomics Outcomes Res. 2013;13(1):59-72. 

In This Article

Abstract and Introduction


Demand-side policies to encourage the use of generic medicines are important to increase their use. A plethora of different demand-side policies has already been initiated by European governments, thereby targeting physicians, pharmacists and patients. This review aims to give an overview of the different demand-side policies which governments have at their disposal and to evaluate their impact on the use of generic medicines. Positive knowledge and perceptions of physicians, pharmacists and patients of generic medicines are necessary prerequisites to increase the use of generic medicines and governments should initiate policies to achieve this. These policies should be combined with policies to increase their financial responsibility to the healthcare system and policies to facilitate the prescribing of generic medicines.


Generic medicines offer an interesting opportunity for governments and healthcare payers to contain escalating healthcare budgets as their prices tend to be 10–80% lower than their originator equivalents.[1] Generic medicines are substitutes for original medicines with the same quality, safety and efficacy and whose bioequivalence with the originator medicine has been demonstrated by appropriate bioavailability studies.[2] For a generic medicine to be deemed bioequivalent, the 90% CIs for the ratios of the area under the curve (AUC) and the Cmax between the generic and the originator medicines must fall between 0.8 and 1.25.[3]

As the generic medicines industry is mainly driven by volume,[4] they will only be able to deliver competitive and sustainable prices if they are ensured a high volume of the pharmaceutical market. Therefore, governments have implemented several demand-side policies in addition to supply-side policies to improve the prescribing efficiency from the availability of generic medicines.[1,5–7]

Supply-side policies are related to market access, pricing and reimbursement of generic medicines, while demand-side policies are related to incentives for physicians to prescribe, pharmacists to dispense and patients to ask for generic medicines.[1] Demand-side policies to increase the use of generic medicines are important, all the more as it has been shown that countries with high generic medicines market shares have seen a larger reduction of generic medicine prices than countries with a low generic medicines market share.[8]

The experience in European countries has shown that the development of a generic medicines market seemed to be driven by one key demand-side policy, which is dependent on the local demographic, cultural, economic and institutional characteristics of the country.[9] For instance, the use of generic medicines is mainly driven by physician budgets in Germany, by prescribing by International Nonproprietary Name (INN) in the UK, by generic substitution in France and Denmark and by reference pricing in Belgium.[10] To be most effective, those key demand-side policies need to be supported by other supply and demand-side policies, thereby creating a coherent generic medicines policy. This is probably to encourage the development of a generic medicines market, as evidence has shown that only a coherent generic medicines policy resulted in the highest generic medicines market shares in Europe.[1] Table 1 provides an overview of different European countries which have initiated demand-side policies for physicians, pharmacists and/or patients.[11]

This narrative reviews aims to give an overview of the different demand-side policies which European governments can initiate to increase the use of generic medicines and to evaluate the impact of current policies on the use of generic medicines.