FROM ORIGINATOR PREMIUM TO PRICE CONVERGENCE: THE GENERIC EFFECT IN THAILAND’S PROCUREMENT

Abstract

This study examined the pricing behavior of originator medicines in Thailand’s public procurement system following two key market events: the first generic entry (FGE) and the expansion of market competition to three or more active competitors. A cross-sectional quantitative analysis was conducted using procurement data from the Thai Comptroller General’s Department covering fiscal years 2018–2022 and encompassing 923 public hospitals nationwide. Products with generic registrations during 2019–2021 were identified, and median annual procurement unit prices were calculated before and after the occurrence of FGE and the first attainment of markets with at least three competing manufacturers or importers. From 75,755 procurement records covering 81 GPUs and 588 TPUs, 23 GPUs met the analytic criteria (11 with no generic purchases over five years; 12 with generic competition). Among the 13 GPUs experiencing first generic entry (FGE), immediate first-year originator price reductions were observed in only 2 cases (15%; bevacizumab, olopatadine). When the first generic was supplied by the same manufacturer as the originator (authorized generic), no clear price decrease was detected. For biologics, announcing a Maximum Procurement Price (MPP) at the time of FGE was associated with an average ~30% reduction in originator prices within the first year. In markets with ≥3 competitors, procurement prices trended downward consistently in line with reference-price implementation, and in some instances originator products withdrew from market. Overall, the findings indicate that FGE by itself does not reliably reduce prices; a MPP and more competitors are essential for achieving meaningful price reductions.