United Kingdom Proposes Applying Price Controls to Biosimilars

The government has launched a consultation that outlines the proposed changes to its price controls, which require brand-name drug makers to pay the government 7.8% of their sales of products to the National Health Service.
Kelly Davio
August 08, 2018
The United Kingdom has is considering changes to its national policies that would bring biosimilars under statutory price controls beginning in 2019.

The government has launched a consultation that outlines the proposed changes to its price controls, which were introduced in March 2018. The controls require brand-name drug makers to pay the government 7.8% of their sales of products to the National Health Service (NHS), and also establish criteria for the maximum price a company can charge the NHS for a given drug.

Currently, the controls apply to brand-name products whose sponsors do not agree to the voluntary Pharmaceutical Price Regulation Scheme, which is negotiated between members of the Association of the British Pharmaceutical Industry and the UK Department of Health, and which regulates the profits that companies can make on sales of drugs to the National Health Service (NHS).

The recently launched consultation would address all biologic medicine—including biosimilars, which are not typically understood to be branded products—within the price controls. The consultation indicates that, because biosimilars are not substitutable at the point of dispensing, “competitive forces generally act more slowly” to reduce costs.

Click here to read more about biosimilars in the United Kingdom.

According to the Department of Health’s own analysis, the average decline of a product’s price after the loss of patent exclusivity has been only approximately 45% for biologics, versus approximately 70% for small-molecule products. “It is appropriate for these health service medicines to be captured by the payment system, price control mechanisms and information requirements in the statutory scheme as market forces do not operate in the same way as they do for identical unbranded generics,” the consultation reads.

The consultation also proposes that the payment percentage of sales to the government rise to 9.9% in 2019, followed by 15.8% in 2020 and 21.7% in 2021.

Industry was quick to react to the proposals; Warwick Smith, director general of the British Generic Manufacturer’s Association and the British Biosimilars Association, said in a statement, “It makes no sense for the Government to intervene in pricing when competition or tenders already very effectively control prices of branded generics and biosimilars.” According to Smith, the government’s proposed changes could mean that biosimilar developers will be financially unable to launch products in the United Kingdom, and could also make projected NHS savings from biosimilars unachievable.

Earlier this month, NHS Improvement, the body that oversees the financial welfare of the NHS, reported that biosimilars had allowed the health system to exceed its savings target for the past fiscal year, and indicated that it could save an additional £100 million (approximately $131 million) during the current fiscal year by using new biosimilars of trastuzumab and adalimumab.



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