Italy - Will the Italian generics market catch up with its European neighbours?

A number of high profile drugs have lost patent protection; will the Italian generic market take off as a result?

The Italian pharmaceutical market is expected to remain one of Europe’s slower growing markets over the next five years. Growth will continue to be constrained by low economic growth, cost containment measures for reimbursable products, reference pricing and an expected expansion of the generics market due to patent expiry on several high volume products.

On the plus side, this may be good news for the generic industry. Even by southern European standards, the Italian generics market is small. Excessive price regulation, long national patent supplementary protection, a lack of incentive distribution margins, confusion between branded and unbranded generics, a perception of generics as second-class drugs and the empowerment of doctors to stop generic substitution are all factors that have traditionally constrained the unbranded generic sector.

The combination of high profile drugs losing patent protection and the need to reduce costs should provide a boost to the generic market. In addition to the blockbusters that have lost patent protection in Italy in the last couple of years, a large number of medicines will lose their national supplementary certificates during 2010. Consumer perception of generics and generic awareness continue to improve. The Italian generic market is also being consolidated by leading generic producers in the country.

However, the generic industry has been coming under increasing pressure from manufacturers of branded products, which have begun to implement price cuts to minimise loss of market share. Significant price reductions have been closing the gap between off-patent brands and unbranded generics. The generic industry still has some way to go, but anticipates continued growth in market share and a progressive alignment with the rest of Europe.

Further reading - An in-depth review of the Italian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Italy (published May 2010)