10.6. The impacts of general subsitution on pharmaceutical industry and wholesale companies

Public examination of a doctoral dissertation in the field of social pharmacy

Doctoral candidate: MSc (Pharm) Johanna Timonen

Time and venue: 10.6.2011 at 12 noon, Mediteknia Auditorium, Kuopio Campus

Generic substitution (GS) was introduced in Finland in 2003. The aim of this study was to explore the impacts of GS on pharmaceutical and wholesale pharmaceutical companies in Finland. In addition, the attitudes of pharmaceutical and wholesale companies toward GS and the expected impacts of GS on their activities (e.g. sales, marketing, storage) were investigated.

The attitudes and expected impacts were explored by quantitative content analysis of articles from mass communication and statements. The impacts of GS on pharmaceutical companies were     investigated with a postal survey conducted among companies with an office in Finland and     substitutable medicines in the Finnish pharmaceutical market in 2004 (n = 23, 56 %) and 2008 (n = 22, 56 %). The impacts of GS on wholesale companies were explored by thematic telephone interviews (altogether 16) of interviewees representing different activities at Oriola Oy and Tamro Suomi in 2004 and 2008.

The attitudes of the pharmaceutical industry and wholesale companies toward GS were negative. Mostly, GS was expected to cause medicine availability problems, affect medicine storage and have an impact on price competition, research activities, sales and gross margins of pharmaceutical   companies. GS had increased turnover in generic product companies and decreased it in original product companies. Price competition caused by GS had decreased gross margins in both company types. The companies had also compensated for their decreased gross margins in different ways. The number of employees and the amount of prescription medicine marketing had decreased in many of the original product companies after GS. The original product companies also had problems related to storage shortly after GS was introduced. In the generic product companies, prescription medicine representatives' visits to pharmacies increased at the beginning of GS. GS also caused problems with storage of pharmaceuticals one year and five years after the reform. GS had increased the amount of work in wholesale companies. Medicine storage, stock management, regular price updating and ensuring medicine availability had required much work during the years of GS. In the beginning of GS, the process of compensating pharmacies for the decrease in the value of medicine stocks also required much work. Price competition caused by GS had decreased wholesale margins. From the perspective of pharmaceutical and wholesale companies, GS generally had not caused availability problems with medicines. 

GS has had many expected impacts on pharmaceutical and wholesale companies. They include effects on sales and gross margins and medicine storage in pharmaceutical and wholesale companies and impacts on the number of employees and amount of medicine marketing in pharmaceutical companies. Of the expected effects, medicine availability problems have not materialized. The   impact of GS on research activity requires more research in the future.

The doctoral dissertation of Master of Science (Pharmacy) Johanna Timonen will be examined at the Faculty of Health Sciences. The opponent in the public examination will be Professor Emeritus Jussi Huttunen of the Finnish Medical Society Duodecim and the custos will be Professor Riitta Ahonen of the University of Eastern Finland.

Photo available for download at http://uef.fi/vaitoskuvat.

Publishing year: 2011

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