Differentiating generics in a crowded marketplace 20 Feb 2024
The UK promotes a favourable environment for generic medicines manufacturers, but stiff competition in the market drives prices down. How can producers ensure pharmacists and consumers choose their products and generate a price premium?
The global generic drugs market is forecast to grow by $176.25 billion in the period 2023-2027, accelerating at a Compound Annual Growth Rate (CAGR) of 7.11% over that time, according to Research and Markets. Looking specifically at the UK, the same analysts valued this market at $13.67 billion in 2020, and project it to grow at a CAGR of 4.6%, worth $17.16 billion, by 2025.
As well as being a strong and growing revenue generator for the pharma industry, generics benefit patients and health systems by introducing competition, driving down prices and widening availability.
The UK has a mature generics market, which has been expanding since the early 1970s. Doctors in Britain are trained and encouraged to prescribe them using the approved international non-propriety name (INN), and the patient population is generally accepting of generic medicines for treatment.
The British Generic Manufacturers Association (BGMA) quotes NHS figures stating that more than a billion generic items are prescribed each year, saving the NHS around £15 billion annually. Further, it says that a review of 40 originator products that have come off patent since the beginning of 2014 shows that introducing generics reduced sales prices by an average of 89%.
UK market good for generics manufacturers
The UK is a desirable market for pharmaceutical producers, sitting in the top 10 globally in 2022. The generics sector is driven by the Government’s desire to reduce NHS costs through encouraging the use of these products in hospitals and pharmacies. It has created an environment that makes the UK more attractive than many European countries for generics manufacturers, as prices are set by competition and there is little bureaucracy. Market access requires the manufacturer to gain Marketing Authorisation for the product based on its safety, quality and efficacy. Once this is achieved, the UK’s GPs and pharmacists are incentivised to prescribe and dispense generics. This supportive position saves the NHS money and speeds the early market entry of generics.
In contrast, many European countries use a variety of mechanisms to establish the cost of generics, basing them on the price of the branded equivalent, tendering, or some other reference pricing method. This reduces competition and disincentivises companies from entering these markets. This results in a greater risk of shortages, higher costs for health services and a slower market entry.
Beating the competition
While the benefits of selling generics in the UK are clear, strong competition and multiple players can make it hard for manufacturers to gain a profitable foothold. With low price margins and no distinction between generic formulations, how can a product stand out and gain market share? The answer lies in strong branding and marketing.
Many painkillers are supplied in packets with basic designs and wording to keep costs down. There is little to choose between them apart from the price. However, distinctive packaging can ensure a generic product differentiates itself.
When the manufacturer is satisfied with the branding design, it is a requirement in the pharma industry that the packaging and wording must be signed off by the Medicines and Healthcare products Regulatory Agency (MHRA).
Once regulatory approval is granted, greater awareness of the brand must be generated among pharmacists and consumers, so the packaging design must be backed by a targeted marketing programme. Pharmacists wield the power to dispense from a range of generic options, so should be approached with a campaign that raises awareness and builds their trust in the brand. Consumers can be presented with attractive and eye-catching packaging that tempts them to choose the product over competitors on the shelf. A range of marketing methods can be used, which should be designed to suit each specific audience.
Increasingly, the Government wants pharmacists to give more advice to consumers about their medicines to reduce the burden on NHS services. Therefore, providing pharmacists with comprehensive information leaflets is a good way to raise awareness of a specific issue.
For example, materials that explain the difference between a migraine and other types of headache possibly indicative of more serious causes, can help in a pharmacist’s accurate diagnosis. Coupled with a well designed and implemented awareness campaign, this will make it more likely that the pharmacist will remember the information received and offer the generic painkiller associated with the awareness campaign if it adequately meets the customer’s need. Brand recognition and reinforcement builds trust in the product and a greater likelihood that it will be the pharmacist’s recommendation.
The consumer choosing an off-the-shelf medicine requires a marketing approach tailored to his/her needs as well. Again, the packaging must be attractive and noticeable on the shelf. With medicines it is particularly important to build trust in the brand. Marketers often say that consumers must see a brand at least seven times before they take action to find out more or buy the product. Here, a joined-up programme of marketing, like a TV campaign plus large advertising displays in suitable locations, such as chemists, can raise awareness and build the brand in people’s minds.
Taking painkillers again as an example, manufacturers can further segment the market, using a generic painkiller but focusing if appropriate, on a specific type of pain. This could mean the product if licensed is marketed as bringing relief for back pain, period pain, or headache, purely through targeted branding. This marketing approach works well for established generics that are already trusted by consumers for one form of pain, as the hard work of brand recognition has already been done.
Investment in professional branding and marketing combined with useful and informative health care professional and patient information, leads to increased sales and a substantive premium over competitor generic products. In what is a crowded sector the regulatory and marketing effort required for such campaigns can provide a very significant return on investment.
Of course, understanding how to position a product in this marketplace is not easy.
The efficient and timely production of the required branded packaging for MHRA approval, the type of marketing campaign that will be most effective, plus how to target different stakeholders, requires the services of experts who have demonstrated experience in this field.
PharmaMedic Consultancy has worked with a number of generic manufacturers to guide them through this process. The Consultancy has specialist regulatory, medical and marketing consultants who can work with you to produce branded campaigns and regulatory product documentation to produce significant returns on your investment.
Please contact us for an initial chat via hello@pharmamedic.co or T: +44 (0) 207 691 4912.