The 15th Biosimilar Medicine’s Conference was held in London on March 23rd – 24th 2017, and was attended by Decision Resources Group’s Biosimilar team. An annual event organized by Medicines for Europe, the conference serves as a platform for industry leaders to gather and discuss the most pertinent issues currently facing biosimilars in Europe. This year, a notable discussion point was how biosimilars could contribute towards the sustainability of healthcare systems, whilst maintaining the sustainability of the biosimilars industry.
Biosimilars present payers with an opportunity to reduce costs at a time of mounting financial constraints. Industry stakeholders recognize that increasing biosimilar use is a cornerstone of any plan aimed at ensuring the sustainability of national healthcare systems, by reducing drug expenditure. At the same time, uptake of biosimilars can improve patient access to modern therapies, by reducing the cost of treatment.
As highlighted by Dr. Steinar Madsen of the Norwegian Medicines Agency, some markets, such as Norway, have adopted aggressive strategies to drive biosimilar uptake. By implementing national tender agreements with one manufacturer per drug molecule, which can be the originator or competing biosimilars, Norway’s “winner takes all” approach has achieved substantial cost savings with biosimilars. In the case of infliximab, the 2016 tender was won by Inflectra, offering a 61% discount versus the price offered for Remicade. Furthermore, with strong financial incentives in place for hospitals to use biosimilars, and a positive stance on biosimilar switching from the regulatory body, Norway has achieved rapid uptake of infliximab and etanercept biosimilars shortly after launch. Notably, at 12 months postlaunch, infliximab biosimilars had a 43% market share, while etanercept biosimilars had a 77% market share in terms of volume; strong uptake has continued since, with infliximab biosimilars reaching 95% market share in March 2017, at 30 months postlaunch. Importantly, since the launch of infliximab biosimilars, a greater number of patients have been treated with TNF-alpha inhibitors, owing to the reduction of cost.
Single tender agreements however may present long-term challenges for the sustainability of the biosimilars industry, even if they help with ensuring the sustainability of healthcare systems. It is widely acknowledged that competition drives down prices, and within the context of biosimilars, lower costs can also result in higher uptake (although the level of discounting needed for robust uptake is debatable). Michele Uda, Director General of the Italian Biosimilars Group (IBG), presented Italy’s new regulatory framework for procurement, which has recently been implemented to address competition and pricing concerns. The revised procurement framework now requires the reopening of supply agreements within 60 days of a biosimilar entering the market; in cases where more than three competitors exist in the market, multi-winner tender agreements are mandatory (a minimum of 3 preferred products), while in cases with fewer than three competitors in the market, a single- or multi-winner tender can be used. The goals of Italy’s new procurement framework are to harmonize the country’s diverse procurement landscape, promote biosimilar uptake, and reduce costs by maintaining competition among biosimilar manufactures. In addition to reducing the cost of therapies, multiple winner tenders could also help to reduce the risk for biosimilar manufacturers, by removing some of the pressure to heavily discount products in order to win a single-winner tender. As such, more biosimilar manufacturers can have a meaningful presence in the market. However, the new procurement framework maintains physician freedom to prescribe, to allow for therapeutic continuity when patients are already receiving biological treatments from previous drug tenders. Automatic, pharmacy-level substitution is not allowed in Italy.
It is clear that countries across Europe have undertaken different strategies to increase biosimilar use and to lower costs, with the hope to establish a more sustainable healthcare system. Although Norway’s biosimilar uptake has been a big talking point for the industry, it remains to be seen how bidding wars to win a single tender could impact the sustainability of biosimilars in single-winner, tender-driven healthcare systems. A multi-winner tender system, such as the one recently implemented in Italy, appears to be a more suitable solution to the problem of reducing costs, and sustaining a healthy biosimilars industry. Building and maintaining a strong biosimilars industry is multifaceted, but a key requirement is the ability for multiple companies to operate within a given market; competitive pricing, incentives to drive adoption, switching and managerial support are also important.