The document discusses Menzis, a large Dutch health insurer, and its preference policy for prescribing generic medicines. The policy aims to use the lowest priced generic equivalent once a brand name drug's patent expires. Pharmacists previously earned high margins substituting generics, without passing savings to customers. Under the preference policy, manufacturers submit annual prices and the lowest bidder wins preferred status for reimbursement. This has saved over 500 million euros annually. The policy could expand to include more drugs and be adopted in other countries to promote transparency and realistic drug prices.

1. The Dutch preference policy and rational prescribing Henk Eleveld, Pharmacist Contractmanager pharmacy Menzis Selling sickness, 8 October 2010

2. Contents of the presentation Menzis Medicines policy Preference policy

4. 2,1 million lives insured, in Eastern and Northern areas market shares up to 65%

5. Market share in The Hague 30% after acquisition of Azivo

6. Anderzorg is an internet brand with 129.000 lives and lowest price promise

7. Total premium income 4.6 billion

10. Contents of the presentation Menzis Medicines policy Preference policy

11. Preference policy Medicines no longer under patent protection were relatively expensive for consumers in the Netherlands (price difference with branded drugs < 2%) Dutch pharmacists made very high margins (compared with the rest of Europe) on unbranded medicines: they frequently earned money by substituting generic medicines for branded counterparts! They did not have to pass this on to the insured. The Healthcare Insurance Act enables preference policy;

14. What is preference policy? Once the patent on a medicine lapses, several manufacturers make an identical medicine. Preference policy finds the cheapest medicine based on the active ingredient in question. All manufacturers are invited to submit their price on a reference date. The manufacturer with the lowest price on the reference date = preferred for a period of 1 year. Healthcare insurer designates only the lowest-priced product for reimbursement. So: market share in exchange for the lowest price! Very successful since July 2008

15. 500 million euro annually € 30 per insured per year 40 mg simvastatin Nov. 2007: € 15.76 July 2008: € 0.88 July 2010: € 0.63

16. Apothekers in actie tegen bemoeizucht verzekeraars Trouw 6 december 2007 'Stijgende kosten door goedkope medicijnen' DVHN | Gepubliceerd op 21 februari 2007, 21:42

18. What does this mean for our insured's? Menzis is not taking the doctor’s place Absolutely safe medicines (the Medicines Evaluation Board, CBG) No therapeutic substitution (the same active ingredient is involved) Pharmacists often switch medicines themselves The more expensive medicines are reimbursed in the event of medical necessity No conflict with pharmacists or the pharmaceutical industry, but fighting on behalf of the patients and those paying the premiums! Not simply a harsh cutbacks campaign

19. Preference policy expanded as from 2009 and 2010! Not the end but the means Objective: transparency and realistic market prices without bonuses We have not heard of a better plan yet Preference policy is the only instrument so far In 2009/2010 expansion with more medicines that are no longer under patent Efficient prescription (by doctors in hospitals too)

20. Future of preference policy Biosimilars 1,2 billion € off patent products in next 5 years Expansion in other European Countries? Problem is the law in those countries Analysis of the law is required in each country.

21. Rational prescribing Once there are differences in prices, make use of them. Make use of guidances of doctors. Choose the rational product. Make contracts with doctors and hospitals to prescribe those most cost effective drugs op population base! Here are the results:

22. Rational prescribing