Patent expiries and the imminent threat of competition from generics is the bane of many pharmaceutical companies’ lives and I’m frequently reading and writing about the doom and gloom pharma is facing because of these issues. This is of course a serious issue for the industry, but there are many beneficiaries, including healthcare providers.

Recently, Datamonitor has revealed that European healthcare providers could benefit from massive savings in excess of £3.3 billion a year by 2014 because of patent expiries and the opening of the market to generic competition. For the UK’s National Health Service (NHS), the onslaught of patent expiries is perfectly timed — only last month, the agency was told to deliver annual efficiency savings of £15 to £20 billion by 2013–2014.

“The potential savings derived from the expiry of key branded drugs could not have come at a better time for the NHS and will have no impact on service delivery,” Alistair Sinclair, lead strategic healthcare analyst at Datamonitor said in a press statement.

Other national health services around the world also stand to benefit from pharma’s fall from the patent cliff, particularly as the global economic crisis has affected many government budgets. According to Datamonitor, the average discount for generic drugs in the EU is 34% and 80% for drugs in the US.

“While a portion of the savings made will be offset by the launch and coverage of novel branded drugs, this still represents a significant saving for payers and will help governments grappling to find budget reductions over the coming years,” Sinclair added.

Interestingly, however, although generics can undoubtedly offer cost savings to healthcare payers, the UK’s Ethical Medicines Industry Group (EMIG) has urged the UK Department of Health in a press statement not to introduce automatic generic substitution in primary care. “EMIG believes that generic substitution will not result in significant savings to the NHS as approximately 83% of drugs are already written generically,” Leslie Galloway, Chairman of EMIG, said in a press statement. “Moreover, EMIG members are opposed to the introduction of generic substitution as they believe it could hinder patient safety.”