All OECD countries view generics and biosimilars as opportunities to increase efficiency in pharmaceutical spending, but many do not fully exploit their potential. In 2023, generics accounted for more than three‑quarters of the volume of pharmaceuticals sold in Chile, Germany, the United Kingdom, the Netherlands, Canada, New Zealand and Latvia. Between 2013 and 2023, the volume of generics increased in most countries, with notable growth observed in Luxembourg, Japan and Greece (Figure 9.7). In value terms, generics accounted for 25% of the pharmaceutical market, on average, but over 50% in Chile and the United Kingdom (Figure 9.8).
Differences in market structures (notably the number of off-patent medicines) and prescribing practices explain some cross-country differences, but generic uptake also depends on policies (OECD, 2018[1]; Socha-Dietrich, James and Couffinhal, 2017[2]). For example, in Austria, generic substitution by pharmacists is not permitted; in Luxembourg, generic substitution by pharmacists is limited to selected medicines. In some countries, such as Ireland, generic penetration is low, but originators and generics may be priced at the same level.
Many countries have implemented incentives for physicians, pharmacists and patients to boost generic markets. For instance, Japan established a roadmap to increase generic uptake in 2013. Since then, the government has steadily raised its targets and implemented various measures, including incentives for hospitals and pharmacies. In Switzerland, pharmacists receive a fee for generic substitution; in France, pharmacies receive bonuses if their substitution rates are high. In many countries, third-party payers fund a fixed reimbursement amount for a given medicine, allowing the patient a choice of the originator or a generic, but with responsibility for any difference in price.
Biologicals are a class of medicines manufactured in, or sourced from, living systems such as microorganisms, or plant or animal cells. Many are produced using recombinant DNA technology. When such medicines no longer have market exclusivity, “biosimilars” – follow-on versions of these products – can be approved. The market entry of biosimilars creates price competition, thereby improving affordability and cost containment efforts.
From 2013 to 2023, biosimilars steadily gained market share in the accessible market across ten key therapy areas (see the “Definition and comparability” box). In 2013, biosimilars represented just 1% of the market volume, but by 2023, their share had increased to 22% across 25 countries This trend highlights the growing acceptance and integration of biosimilars into healthcare systems. In 2023, biosimilars accounted for more than one‑quarter of the accessible market in selected therapy areas in countries including Italy, Spain, Sweden, Austria and Portugal (Figure 9.9).
