Spanish doctors told to prescribe cheaper generic drugs

Zapatero government expects £2bn yearly saving in law change limiting use of costly branded medicines

In a move designed to save €2.4bn (£2.1bn) a year, Spain's socialist government has passed a law forcing doctors and pharmacies to prescribe generic drugs rather than the more expensive brand names sold by pharmaceutical companies.

Spanish doctors will now have to complete prescriptions giving only the details of the active ingredients of the medicine that their patients must take, as well as the dose and format. The drugs are paid for partly by the state and partly by patients.

Pharmacies will be obliged to provide the cheapest available versions of drugs, which will frequently mean not the better-known brand names sold by the big drugs firms.

The government believes the overall saving to the state and to the regional governments who administer health, combined with other drug-price reduction measures adopted on Tuesday, will be about €2.4bn (£2.09bn) a year.

"It means an important saving for the public accounts and will, without doubt, benefit most people who use public health services," said the Basque nationalist deputy Josu Erkoreka, whose party backed the move. "The interests of the big drugs companies must give way to public interest, and what matters is reducing the deficit and lowering the drugs bill for millionsof people who use public health services."

The prime minister, José Luis Rodríguez Zapatero, told parliament the measures would help Spain continue to lower the cost of drugs to the state, a move that began last year and which has led to the first-ever fall in the national pharmaceutical bill. This year's bill was already cut by 10%, in part because of measures that had increased the generic drugs used.

The change will help Spain's budget deficit as the government works to bring it down from the 11.1% of 2009 to 6% by the end of 2011.

But pharmaceutical firms will be hurt, claimed the Catalan nationalist deputy, Josep Antoni Duran i Lleida. Jobs are likely to be lost in the sector.

Zapatero is also considering reintroducing a wealth tax on the assets of Spain's rich, according to El País newspaper.

This tax was suppressed across the board in 2008, but with just 47,000 wealthy individuals reportedly accounting for €1bn of wealth-tax money, the government believes it has found an efficient way to raise extra tax.

In a surprise proposal, Zapatero on Tuesday also proposed a change to Spain's constitution, to limit the deficit by law. His proposal imitates one already made by the opposition People's party (PP), which immediately gave its backing.

Zapatero has called a general election for 20 November, but cross-party support means that if the two main parties can rapidly agree on a text the measure could be pushed through within a month.

Opinion polls suggest that with Spain's 21% unemployment, sluggish growth, and spending cuts, a government after the November elections will probably be led by the PP's Mariano Rajoy.

He criticised the government for failing to introduce the law earlier and for allowing public spending to soar after the economy crashed in 2008.

Rajoy also pledged to prolong a temporary tax cut on the purchase of newly built homes, introduced by the socialist government on Tuesday.

This tax cut, from 8% to 4%, aims to accelerate the sale of homes and reduce the stock of an estimated 700,000 newly built homes that remained on the market after the housing bubble burst three years ago. The cut will also benefit foreign buyers of holiday homes in Spanish resorts, where many of the unsold properties can be found.

Contributor

Giles Tremlett in Madrid

The GuardianTramp

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