New Chilean Pharmaceutical Law Focuses on Generic Substitution

The new Chilean pharmaceutical law, Ley de Farmacos, aims at regulating generics bioequivalence and biosimilars in the country as well as enforcing prescription by generic name as part of a joint effort between the Ministry of Health (MoH) and the Public Health Institute to regulate the pharmaceutical market in the country. According to Minister of Health Jaime Manalich, cited by the Nacional newspaper, the new law aims at better regulation of biosimilars and generics in the country as the "pharmaceutical environment is not regulated enough in Chile".

According to the source, the Public Health Institute is undergoing a process of bioequivalence testing, aimed at regulating differences between generic and bioequivalent drugs. According to the source, 65 generic products are currently registered as bioequivalent and the country is aiming at achieving bioequivalence on 250 generic products by the end of 2012, and bioequivalence on all products by the end of 2014 (source: Nacional).

Another part of the new pharmaceutical law focuses on fostering prescription by generic name: doctors will have the mandatory duty to prescribe drugs by active pharmaceutical ingredient (API) or generic name. This will prevent pharmacies from pursuing their pro-branded-drug stance with patients being able to choose whatever drug suits their budget. Furthermore, the new law also bans the so called "ley canela", a controversial practice under which pharmacists and doctors would receive monetary incentives or other types of incentives, such as trips aboard, from pharmaceutical companies for selling their products.

Outlook and Implications

With this new regulation, the Chilean government aims at placing the country at the forefront of biosimilars regulation in the region, together with countries such as Brazil and Mexico. The country is also aiming at achieving bioequivalence of all generics on the market by the end of 2014.

As well as achieving generics bioequivalence on all products, the new law aims at creating thorough legislation to regulate biosimilars in the country. The MoH is also working to enforce prescription by generic name in order to generate substantial savings for patients and the government. Enforcing stricter bioequivalence regulations go hand in hand with implementing the prescription and sales of generics, as patients will only be sure they can be safe purchasing generic drugs once the number of bioequivalence tests increases.

Following the example of other Latin American countries such as Mexico and Brazil, enforcing biosimilar regulations as well as bioequivalence for generics already on the market helps strengthen the domestic generic market, which is an invaluable resource to meet the health needs of all sections of the population in developing countries. As in the case of mandatory prescription by API enforced in Spain, the measure will cut pharmaceutical expenditure and generate significant savings. Conversely, however, in the long term, generics prescription has proved to affect the revenues of pharmacies, generating potential debts with wholesalers.