Biosimilars: How Can Payers Get Long-Term Savings?

Abstract

The term ‘biosimilar’ refers to an alternative similar version of an off-patent innovative originator biotechnology product (the ‘reference product’). Several biosimilars have been approved in Europe, and a number of top-selling biological medicines have lost, or will lose, patent protection over the next 5 years. We look at the experience in Europe so far. The USA has finally implemented a regulatory route for biosimilar approval. We recommend that European and US governments and payers take a strategic approach to get value for money from the use of biosimilars by (1) supporting and incentivising generation of high-quality comprehensive outcomes data on the effectiveness and safety of biosimilars and originator products; and (2) ensuring that incentives are in place for budget holders to benefit from price competition. This may create greater willingness on the part of budget holders and clinicians to use biosimilar and originator products with comparable outcomes interchangeably, and may drive down prices. Other options, such as direct price cuts for originator products or substitution rules without outcomes data, are likely to discourage biosimilar entry. With such approaches, governments may achieve a one-off cut in originator prices but may put at risk the creation of a more competitive market that would, in time, produce much greater savings. It was the creation of competitive markets for chemical generic drugs—notably, in the USA, the UK and Germany—rather than price control, that enabled payers to achieve the high discounts now taken for granted.

key Drivers for Market Penetration of Biosimilars in Europe

“…This study showed that the number of incentive policies dedicated to enhance biosimilar uptake is an important driver of biosimilar penetration, as already suggested in qualitative studies [16,17,39,40]. The opposite would have been surprising and would have questioned the face validity of the results or the effectiveness of such policies.…”

“…One study estimated the impact of biosimilar entry in terms of healthcare systems savings between 2007 and 2020 for eight EU countries (France, Germany, Italy, Poland, Romania, Spain, Sweden, and the UK), ranging from €11.8 billion to €33.4 billion [12]. Other qualitative studies assessed the levers and barriers to the uptake of biosimilars based on analysis of biosimilar uptake, price reduction, and various policies implemented across EU MS [2,8,[13][14][15][16][17] One quantitative study (Rovira et al [18]) assessed market dynamics of biosimilars in 24 EU MS, as well as Norway and Switzerland, between 2007 and 2010 using bivariate regression, and reported faster launch of biosimilars after marketing authorisation, associated to countries' gross national income and expenditure on health, pharmacists' generics substitution (inversely), and medicines' price level index. A recent survey providing an overview of pricing and reimbursement policy approaches across Europe for biological medicines, and specifically applied to biosimilars showed heterogeneity in policies and their implementation between the different countries [11].…”

Supply-Side and Demand-Side Policies for Biosimilars: An Overview in 10 European Member States

“…Biosimilars should be distinguished from generics, especially in terms of higher development costs, owing to the complexity and high cost of the manufacturing process, and different development requirements [48,119]. Despite significant differences between biosimilar and generic markets, similar trends have been observed with regard to the factors potentially influencing generic and biosimilar uptake.…”

“…IRP, ERP, tendering, and mandatory price linkage) in general seem to limit the penetration of biosimilars in the long term, despite short-term savings. In contrast, demand-side policies are considered to impact uptake positively [119][120][121][122][123][124].…”

How Can Pricing and Reimbursement Policies Improve Affordable Access to Medicines? Lessons Learned from European Countries

“…Policies to encourage the uptake of biosimilars differ from policies to encourage to uptake of generic medicines because of the perception that biosimilar medicines should not be treated as 'generics' [116]. For instance, prices of biosimilars are linked to originator prices, the required difference between the biosimilar and the originator price is lower compared to generics (e.g., 30% for generics and 15% for biosimilars in Croatia; and 50% for generics and 30% for biosimilars in Lithuania) [117].…”