Geneva Study Finds ‘Evergreening’ Increases Healthcare Costs

By Brittany Ngo for Intellectual Property Watch

A recent Geneva-based study found that so-called evergreening practices utilised by drug manufacturers are successful in protecting profits by maintaining company market share and offsetting generic competition and cost containment policies.

The term “evergreening” refers to a strategy employed by pharmaceutical companies to extend their market monopoly by slightly changing the formulation of their brand drugs and obtaining new patents for “follow on” drugs. The purpose of the study was to assess the impact of such follow-on drugs on overall health care costs in the Swiss canton of Geneva.

The study, led Nathalie Vernaz from the Geneva University Hospitals, used hospital and community pharmacy invoice data in Geneva to calculate utilisation of eight follow-on drugs between 2000 and 2008. The researchers found that the number of patients receiving either an original brand or follow-on drug increased by 74,507 patients between 2001 and 2008. Of the total cost for all studied drugs (€171.5 million euros), more than €100 million euros was spent on brand-name drugs, €41.1 million euros for follow-on drugs, and €27.2 million euros for generic drugs.

Based on these results, the authors concluded that evergreening strategies for follow-on drugs contribute to overall healthcare costs. It also implies that policies that encourage prescription of generic drugs could induce saving on healthcare expenditure. The authors of the study urged healthcare providers and policymakers to be aware of the impact of evergreening strategies on overall healthcare costs.

The study, published in PLOS Medicine, is available here.

Brittany Ngo is currently completing her Master’s in Health Policy and Global Health at the Yale School of Public Health and previously obtained a Bachelor’s of Arts in Economics from Georgetown University. Through her studies she has developed an interest in health-related intellectual property issues. She is a summer intern at Intellectual Property Watch.