The European Commission, in conjunction with the Organization for Economic Co-operation and Development, has released its Health at a Glance: Europe 2018 report which highlights the need for and value of generic and biosimilar products.
The European Commission, in conjunction with the Organization for Economic Co-operation and Development, has released its Health at a Glance: Europe 2018 report.
The report highlights the need for and value of generic and biosimilar products to reducing wasteful spending in healthcare systems. “After inpatient and outpatient care, pharmaceuticals represent the third largest item of healthcare spending, accounting for a sixth of health expenditure in the [European Union] in 2016,” the authors note.
Additionally, the report notes that nearly one-fifth of health spending is considered “wasteful,” and could be reduced or eliminated without undermining health system performance or quality. Reducing spending is particularly important when one considers that as much as 9.6% of European Gross Domestic Product is directed to healthcare.
In order to address wasteful pharmaceutical spending, the report describes 4 approaches: ensure value for money in selection, coverage, pricing, and procurement; fully exploit potential savings from generics and biosimilars; improve adherence to treatment, optimize packaging, and reduce waste; and promote rational prescribing while curbing overuse.
Specifically, biologics represent one of the most rapidly growing segments of the pharmaceutical market; it is estimated that biologics will increase from 25% of global pharmaceutical sales (by value) in 2017 to 31% in 2024. While biosimilars have been available in Europe for more than 10 years with 40 plus biosimilar products available in 15 different biologic classes, market penetration remains low. However, opportunities for further savings are substantial, as many major patent expiries are anticipated between 2018-2024.
The report explains that, across Europe, there are significant differences in policy approaches to biosimilar pricing and reimbursement, as well as stakeholder incentives for biosimilar use and education around the products. A recent study conducted across 20 EU Member States, Iceland, Norway, Russia, and Serbia, found that many biosimilars were not uniformly accessible across Europe. Significantly, the study found that Germany was the only country in which all approved biosimilars were available and funded.
In certain countries across Europe, incentives exist for physicians to prescribe biosimilars. In France, physicians are encouraged to prescribe at least 20% insulin glargine biosimilars in ambulatory care. Similarly, in Belgium, biosimilars are incorporated into physicians’ quotas for prescribing low-cost medications, and providers are encouraged to prescribe at least 20% biosimilars specifically for treatment-naïve patients.
In terms of potential savings from biosimilars, estimates have been substantial. In 2016, it was estimated that biosimilars could save up to €100 billion ($113 billion) by 2020 in the 5 most inhabited countries in the EU (Germany, France, Italy, Spain, and the United Kingdom) and the United States. The report also stresses the importance of promoting biosimilar uptake as a way to drive savings; however, it notes that “it is the market entry of biosimilars that promotes price competition,” as the correlation between biosimilar market share and price reductions is weak, suggesting the existence of barriers to effective competition.
Recently, Portugal has implemented financial incentives for pharmacies to encourage dispensing of lower-price medicines, including defining target market shares for biosimilar versions of infliximab, etanercept, and rituximab. In the Netherlands, there are limitations on the prescribing of reference products as part of agreements reached between insurance companies and hospitals, though the report noted that budget constraints within hospitals already provide incentives for the use of biosimilars.
Interestingly, substitution rules are also of importance in influencing biosimilar uptake in Europe. Most countries, with the exception of Estonia, France, Latvia, and Poland, do not allow unrestricted substitution of biologics at the point of dispensing. In France, draft legislation was introduced in 2017 permitting the substitution of biosimilars, but it is limited to initiating treatment in biologic-naïve patients, or to ensuring continuity for patients previously dispensed a biosimilar.
The FDA has not yet published a final guideline regarding interchangeability that allows for pharmacy-level substitution, though it is of note that most biosimilar products approved in the US to date are administered subcutaneously or as infusions, and not dispensed at the pharmacy level.
“In all approaches to reducing waste, stakeholder engagement and effective communication are critical. Prescribers and patients need to understand the value offered by generics and biosimilars, and be adequately reassured as to their equivalence and safety,” write the report’s authors. The report concluded by encouraging development and disbursement of guidelines and protocols that allow for discussion, engagement, and support for rational decision-making around reducing waste in pharmaceutical spending.