The cost of evergreening strategies

Published: 2013-12-19

The cost of evergreening strategies

The practice of evergreening, where pharmaceutical companies make small patentable changes to existing products with soon-to-expire patents, contributed to increased healthcare costs in Switzerland, according to a study by authors from the University of Geneva and Geneva University Hospitals.

Companies may evergreen their patents by combining formulations or producing slow-release forms of an existing drug. Such ‘follow-on’ products then compete with generics introduced after the patent expiry of the originator drug.

The study, carried out by Vernaz and co-authors used hospital and community pharmacy invoice office data in the Swiss canton of Geneva to calculate utilization of eight follow-on drugs in defined daily doses (DDD) between 2000 and 2008. The authors calculated the extra cost incurred according to three different scenarios that could occur after patent-expiry of an originator drug. Scenario 1 assumed that all brand-name drug prescriptions were replaced by generics, scenario 2 assumed the same for all follow-on drug prescriptions and scenario 3 assumed that all brand-name and follow-on drug prescriptions were replaced by generics.

Eight follow-on drugs were identified as being available in the canton of Geneva during the study period:

  • 3 isomers: levocetirizine (follow-on drug for cetirizine), escitalopram (for citalopram), esomeprazole (for omeprazole)
  • 1 active metabolite: desloratadine (for loratadine)
  • 2 combination formulationsof the originator drug: alendronic acid combined with colecalciferol (for alendronic acid), simvastatin combined with ezetimibe (for simvastatin)
  • 1 slow-release formulation: zolpidem extended release
  • 1 structural analogue: pregabalin (for gabapentin).

The study found that the extra costs incurred were Euros 15.9 (95% CI 15.5; 16.2) million for scenario 1, Euros 14.4 (95% CI: 14.1; 14.7) million for scenario 2 and Euros 30.3 (95% CI 29.8; 30.8) million for scenario 3. The impact of strictly switching all patients using proton-pump inhibitors to esomeprazole at admission resulted in a spillover extra cost of Euros 330,300 (95% CI 276,100; 383,800), whereas strictly switching to generic cetirizine resulted in savings of Euros 7,700 (95% CI 4,100; 11,100).

The impact of listing these follow-on drugs in hospital restrictive drug formularies (RDFs) was also assessed and it was estimated that this practice resulted in extra costs of Euros 503,600 (95% CI 444,500; 563,100).

The authors concluded that the results demonstrate the effectiveness of evergreening strategies employed by pharmaceutical companies in the Swiss canton of Geneva. Despite competition from generics and co-payment incentives, the savings that could have been made from generics was offset by the successful marketing of follow-on drugs.

Conflict of interest
The authors of the research article declared that there were no conflicts of interest.

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