Spain Generics Drive Hits Red Tape Hurdles

Spanish generics makers' association AESEG has reported that the value of the country's generics sector increased by some 19% in 2004, but the market is still only worth EUR410mn (US$530.67mn). This total is dwarfed by the overall drug market, which is dominated by branded products and currently valued at US$16.1bn.

The tiny market share of generics in Spain comes despite aggressive government moves to promote the sector as its drug bills continue to soar. Generics lobby groups have cautiously welcomed the so-called Plan de Farmacias initiative introduced in December 2004, but the industry has failed to make significant inroads in recent years, with sales growing just 0.3% last year. This compares unfavourably with an 11% growth for patented prescription drugs in 2004.

The latest government measures have included automatic pricing procedures for drugs falling within certain cost ranges, as well as accelerated marketing approvals for generic products. However, red tape continues to be cited as the main culprit for stunted growth rates for generics, especially as generic marketing applications are only able to be processed after the expiry of patents on innovator equivalents. This contrasts with approval conditions in many other European countries, where generics account for up to 15% of the market.

The government will be hard pushed to meet its target to quadruple generics sales within the next few years, as only about 11 active ingredients are currently available in various generic formats in Spain. Further, with among the lowest prescription drug prices in Europe, it will also be up to the government to establish clear cost differentials between generics and branded medicines if the sector is to match value forecasts of US$6.6bn by 2008.