A New Regulatory Framework for the Public Procurement of Off-Patent Pharmaceuticals in Italy: Balancing Cost Control and Supply Continuity

Introduction

Italian law recently established a comprehensive framework governing the public procurement of off-patent non-biological pharmaceuticals for which generic equivalents have been introduced to the market (section 11-quinquies added to Article 15 of Law Decree 95/2012 by Law 199 of 30 December 2025). This legislative intervention pursues a dual objective: ensuring the sustainability of pharmaceutical expenditure whilst simultaneously guaranteeing enhanced control over supply continuity—a critical concern in public health procurement.

Notably, this new provision complements the existing section 11-quarter of the same article 15, which addresses biosimilar medicines. Together, these provisions create a bifurcated regulatory architecture that recognises the fundamental scientific and regulatory differences between non-biological generics and biosimilar pharmaceuticals.

Multi-Supplier Framework Agreements and the Allocation Mechanism

According to the new law, where more than three medicinal products containing the same active pharmaceutical ingredient are available, public procurement procedures may be conducted through framework agreements open to all economic operators. This threshold-based approach ensures that framework agreements—which offer procedural efficiency and flexibility—are deployed where market competition is sufficiently robust to justify their use. In addition, the deployment of such framework agreements is not mandatory as the law states that contracting authority “may” use them, so they are not obliged to do.

Regional purchasing centres must establish a single lot, the composition of which must take into account the specific active ingredient (ATC Level V classification), the same dosage, and the same route of administration. This technical specification ensures genuine comparability between competing products.

In cases falling within the framework agreement procedure, and in order to guarantee expenditure sustainability whilst limiting the risk of discontinuity or interruption of supplies, specific allocation quotas are established for the first three pharmaceuticals in the framework agreement ranking, classified according to the criterion of lowest price or most economically advantageous tender. In particular, the quotas are the following:

• 55% to the first-ranked operator in the framework agreement ranking
• 30% to the second-ranked operator
• 15% to the third-ranked operator

This allocation formula represents a risk management mechanism. By awarding contracts to multiple suppliers rather than a single winner, the framework mitigates supply chain vulnerability. Should the primary supplier encounter production difficulties, regulatory issues, or financial distress, secondary and tertiary suppliers can maintain continuity of provision.

Patent Expiry for a Non-biological Product During Contract Performance

In the event of expiry of the patent or supplementary protection certificate for a non-biological pharmaceutical during the validity period of a supply contract, the contracting authority must, within sixty days from the date of marketing of one or more generic equivalents containing the same active ingredient, having verified the actual availability of product in the Italian market, open competitive proceedings between these and the reference originator pharmaceutical, with the possibility to deploy framework agreements where more than three medicinal products containing the same active ingredient are available.

The sixty-day mandatory timeframe for initiating competitive proceedings ensures that public purchasers can swiftly capitalise on the cost savings typically associated with generic entry, rather than remaining locked into potentially more expensive originator contracts for their entire duration.

The requirement to verify “actual availability of product in the Italian market” introduces a pragmatic safeguard. The mere regulatory approval or marketing authorisation of a generic does not automatically trigger renegotiation; the product must be demonstrably available for procurement.

In the event of subsequent market entry of additional non-biological pharmaceuticals containing the same active ingredient, new competitive proceedings shall be reopened upon expiry of the previous contract.

The Parallel Regulatory Framework for Biosimilars

The new legislation added a new provision to a law which already governed the procurement of biosimilars, providing a slightly different regulation to the two categories of products, reflecting the fundamental scientific differences between biological and non-biological pharmaceuticals.

Both provisions share several core structural features, suggesting a deliberate legislative strategy of creating parallel yet differentiated frameworks:

• Framework Agreement Mechanism: Both regimes mandate framework agreements with all economic operators when more than three products based on the same active ingredient are available. However, for biosimilars such mechanism results mandatory while for generics contracting authorities seems to have the discretion to use it or not.
• Single Lot Configuration: Both provisions require regional purchasing centres to establish a single lot defined by the specific active ingredient (ATC Level V), the same dosage, and the same route of administration.
• Distribution Obligations: Both regimes impose obligations on contracting authorities to supply prescribing centres with awarded products in accordance with public procurement legislation.
• Patent Expiry Provisions: Both frameworks include provisions addressing patent or supplementary protection certificate expiry during contract performance, with identical sixty-day timeframes for opening competitive proceedings following market entry of alternative products.

Despite these structural similarities, the two provisions diverge significantly in ways that reflect the distinctive nature of biological versus non-biological pharmaceuticals.

• Substitutability and Interchangeability: The provision explicitly prohibits automatic substitutability between a reference biological product and its biosimilar, and between different biosimilars. This prohibition acknowledges the scientific reality that biosimilars, whilst highly similar to reference biologicals, are not identical copies. The provision further establishes that biosimilarity can only be determined by the European Medicines Agency (EMA) or the Italian Medicines Agency (AIFA), having regard to their respective competences. Of course, no comparable prohibition exists for non-biological products. The provision implicitly treats generic equivalents as interchangeable with originator products and with each other.
• Allocation Mechanisms and Prescriber Autonomy: the provision on generics establishes a rigid proportional allocation formula: 55% to the first-ranked operator, 30% to the second, and 15% to the third. This creates supply certainty for multiple vendors whilst prioritising cost-effectiveness. Conversely, as to biosimilars, whilst patients must be treated with one of the first three products in the framework agreement ranking, physicians retain explicit freedom to prescribe any product included in the procurement procedure that they deem appropriate for ensuring therapeutic continuity for patients. This distinction reflects fundamentally different policy judgements about prescriber autonomy. For non-biological generics, the allocation formula operates mechanistically, with supply distributed according to fixed percentages regardless of individual prescribing decisions. For biosimilars, the framework explicitly preserves clinical discretion, recognising that biological medicines may require individualised treatment approaches. Moreover, the biosimilar provision’s emphasis on “therapeutic continuity” acknowledges a critical clinical concern: switching biological medicines, even between a reference product and an approved biosimilar, may not be appropriate for all patients. The legislative framework therefore subordinates procurement efficiency to clinical judgment in ways that the non-biological generic provision does not.
• Financial Accountability: the provision on biosimilars includes a striking accountability mechanism: any additional economic burdens arising from non-compliance with the provision’s requirements cannot be charged to the National Health Service. This creates a powerful incentive for compliance by ensuring that entities departing from the prescribed procurement framework bear the financial consequences. This accountability mechanism addresses a specific risk: that prescribers exercising their autonomy to prescribe outside the top three ranked products might generate additional costs.

Final remarks

The comparative analysis reveals two distinct regulatory pathways that may be explained on the basis of the different scientific characteristics of the two categories of products.

For non-biological generics, section 11-quinquies prioritises supply certainty and cost control through mechanical allocation formulae. Its underlying assumption is that generic equivalents are sufficiently interchangeable that procurement decisions can be driven primarily by economic considerations, with limited need for clinical discretion in product selection.

Conversely, as to biosimilars, section 11-quater balances cost rationalisation with clinical autonomy. It acknowledges that biological medicines occupy a more complex regulatory and clinical space, where scientific similarity does not necessarily imply therapeutic interchangeability, and where individual patient responses may vary. The framework therefore creates competitive pressure for cost containment whilst preserving professional judgment in treatment decisions.