Demand-Side Policies Increase Biosimilar Market Penetration in Europe

An examination of national policies on biosimilars in 10 European Union (EU) member states concludes that supply-side policies targeting price can limit biosimilar penetration in the long term, even though such policies create short-term savings. However, demand-side policies positively impact biosimilar uptake and are important drivers for biosimilar market penetration.

Demand-side policies include:

• Physician, pharmacist, and patient incentives targeting biosimilars
• Pharmaceutical prescription budgets and prescription quotas, combined with monitoring systems
• Financial incentives or penalties to stimulate uptake

The study, published online in the Journal of Market Access & Health Policy, comprised a comprehensive literature review that identified supply-side and demand-side policies and their effect on biosimilar uptake in the 10 member states that have the highest pharmaceutical expenditures in the EU: Belgium, France, Germany, Greece, Hungary, Italy, Poland, Spain, Sweden, and the United Kingdom.

Supply-side policies are measures that are primarily directed at specific healthcare-system stakeholders who are responsible for the pricing and reimbursement of medicines. These policies include price regulation, health technology assessments (HTA; systematic, multidisciplinary evaluations of properties, effects, and/or impacts of health technology to evaluate the social, economic, organizational, and ethical issues of a health intervention or health technology), and procurement conditions. Supply-side policies affecting biosimilars commonly include price linkage, price reevaluation, and tendering. The use of internal or external reference pricing varies between countries.

Demand-side policies are measures that are directed toward stakeholders who prescribe, dispense, and ask for medicines. Demand-side policies use pharmaceutical prescription budgets or quotas along with the monitoring of prescriptions (with potential financial incentives or penalties).

The researchers said that, despite significant differences between biosimilar and generic markets, they saw similar trends with respect to the factors potentially influencing generic and biosimilar uptake. “Biosimilars should be distinguished from generics in terms of higher development costs due to their complexity and development requirements,” they state.

The authors found that supply-side regulations targeting price in general limit the penetration of biosimilars in the long term even as they create short-term savings. In contrast, demand-side policies have a positive impact on uptake: “Supply-side policies aim to push biologic reference medicine and biosimilar prices down to generate savings, but significant compulsory price cuts on biosimilars are considered disincentivizing for manufacturers,” the researchers explain. “To compete with biosimilars, reference medicine manufacturers would be tempted to cut their prices to maintain the uptake of branded biologics, thus reducing competition and decreasing the revenue profitability of biosimilar producers.” Decreasing competition following biosimilar entry would ultimately lead to price increases in the longer term.

The authors note that switching biosimilars for reference biologics is generally allowed in the EU, though switching is solely the physicians’ responsibility, as automatic substitution is forbidden in most EU member states. Thus, prescribers’ positive attitudes toward, and trust in, biosimilar medicines should be a priority.

However, the researchers point out, studies have shown that physicians’ familiarity with biosimilars is not yet satisfactory, and that prescribers perceive the information on biosimilars to be both insufficient and untrustworthy. The authors recommend implementing HTAs to create opportunities to satisfy both patients’ and physicians’ needs for better education about biosimilars and to potentially increase biosimilar acceptance. Germany, for example, has a high biosimilar uptake rate and has implemented several demand-side policies such as prescription budgets, quotas, financial incentives, and informational campaigns.

“Understanding that a return on investment is needed to ensure the sustainability of the biosimilar industry is critical for achieving both the economic savings associated with biosimilar entries and the health benefits associated with a wider use of biologics,” the authors conclude. “Further research is needed to inform biosimilar supply- and demand-side policies within the EU.”