Academic journal article Applied Health Economics and Health Policy

The Impact on Health Outcomes and Healthcare Utilisation of Switching to Generic Medicines Consequent to Reference Pricing: The Case of Lamotrigine in New Zealand

Academic journal article Applied Health Economics and Health Policy

The Impact on Health Outcomes and Healthcare Utilisation of Switching to Generic Medicines Consequent to Reference Pricing: The Case of Lamotrigine in New Zealand

Article excerpt

Published online: 9 July 2014

© Springer International Publishing Switzerland 2014


Background Many countries have implemented generic reference pricing and substitution as methods of containing pharmaceutical expenditure. However, resistance to switching between medicines is apparent, especially in the case of anti-epileptic medicines.

Objectives This study sought to exploit a nation-wide policy intervention on generic reference pricing in New Zealand to evaluate the health outcomes of patients switching from originator to generic lamotrigine, an anti- epileptic medicine.

Methods A retrospective study using the national health collections and prescription records was conducted comparing patients who switched from originator brand to generic lamotrigine with patients who remained on the originator brand. Primary outcome measures included switch behaviour, changes in utilisation of healthcare services at emergency departments, hospitalisations and use of specialist services, and mortality.

Results Approximately one-quarter of all patients using the originator brand of lamotrigine switched to generic lamotrigine, half of whom made the switch within 60 days of the policy implementation. Multiple switches (three or more) between generic and brand products were evident for around 10 % of switchers. Switch-back rates of 3 % were apparent within 30 days post-switch. No difference in heath outcome measures was associated with switching from originator lamotrigine to a generic equivalent and hence no increased costs could be found for switchers.

Conclusions Switching from brand to generic lamotrigine is largely devoid of adverse health outcomes; however, creating an incentive to ensure a greater proportion of patients switch to generic lamotrigine is required to achieve maximal financial savings from a policy of generic reference pricing.

1 Introduction

Cost-containment strategies are ubiquitous internationally in the management of pharmaceutical expenditure. Strate- gies to reduce the purchase cost of medicines include reference pricing, tendering and other supply-side mecha- nisms, and cost-sharing policies are aimed at influencing behaviour of prescribers and consumers [1, 2].

In New Zealand the state acts as the national insurer, purchasing medicines at prices negotiated by the Pharma- ceutical Management Agency (PHARMAC). PHARMAC in turn, employs a mix of pricing policies to achieve maximum efficiency for the pharmaceutical budget [3]. Generic-reference pricing, whereby the price of generic equivalent brands are weighed against one another, is one key strategy, with the preferred lower-priced product assured of becoming listed in the PHARMAC Schedule as the preferred supplier for national requirements. Periodic changes to the Schedule are thus made, with the generic product being listed for subsidy and the previous brand either being delisted or having a reduced subsidy applied to it.

However, the issue of interchangeability of generic-for- brand medicines is contested in the literature and popular media, and uncertainty persists amongst clinicians and patients alike [4-6]. Arguments against generic substitution include potential negative health consequences via a loss of therapeutic effect, toxicity or adverse events and conse- quent increased health services utilisation, as well as increased inequity as the expensive originator brands are only available to those who are willing and able to pay. In the case of anti-epileptic medicines, specific arguments against generic substitution centre on the concept of narrow therapeutic index, whereby small changes in serum con- centration of a medicine could theoretically result in loss of therapeutic efficacy or in toxicity. Loss of efficacy in a condition such as epilepsy has profound social conse- quences alongside medical and financial costs, especially when a patient has been seizure-free for a period of time, and a reluctance to change between brands is thus under- standable. …

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