Although more advanced than in the United States, biosimilars markets in Europe may discourage competition over the long term, said officials from Medicines for Europe.
Some countries in Europe may have opened the door to biosimilars in only a token way, simply to tempt price reductions from originator companies. Others just haven't opened the door wide for enough biosimilar competitors to enter. However, these situations may slowly be changing as a result of lobbying by Medicines for Europe, a trade association whose members interviewed with The Center for Biosimilars® (CfB) recently.
In Part 2 of this interview with Adrian van den Hoven, director general of Medicines for Europe, and Diogo Piedade, market access manager for Medicines for Europe, we continue our discussion of the competitive dynamics of biosimilar markets in the European Union.
Van den Hoven and Piedade explain the importance of having robust competition among biosimilar producers in a single marketplace. They contend that money saved via biosimilars makes more money available for complex medical treatments, and they discuss efforts by Medicines for Europe to persuade countries to move away from single tender systems that grant one biosimilar preferred status and, in the process, discourage manufacturers of other biosimilars from competing.
For Part 1 of this interview, click here.
CfB: Please explain the connection between the number of biosimilar companies able to compete in a European market and patient access to biosimilars?
Van den Hoven: There's a correlation between how much uptake there is in the market and how many companies can play in the market at the same time. In some markets our companies have really struggled to get market share, like Ireland, or historically, Belgium, although that's changing. Now, Belgium is stimulating more biosimilar competition, but historically, Belgium, Ireland, Malta, these were countries that basically wanted to use biosimilars just to lower the price of the reference product, but not to actually use biosimilars. Of course, for biosimilar companies, that's not a really attractive market for them, so they started exiting those markets, and now some of them are reforming like, definitely Belgium is putting in measures to stimulate the use of biosimilars. Biosimilars actually have to be used, otherwise you're not going to sustain competition in the market. And that competition is what lowers the prices and enables you to give access to more patients or to reinvest the money elsewhere, whatever you're looking to do as a government.
CfB: Biosimilars bring lower costs, especially multiple biosimilars, so what effect does this have on innovator companies and their willingness to invest in these markets?
Van den Hoven: In markets that have biosimilar competition, it's actually positive for innovation, because you give access, let's say bigger access to the biological therapy, but then newer therapies can also come into the market because there's some room in the budget for that. A good example is psoriasis, where you have the launch of at least 2 or 3 new biologics. For sure, that's partly sustainable due to the biosimilar competition in monoclonal antibodies. And so, there is innovation going on. And without the competition driver for the price savings, that would be very hard to sustain in Europe, because the biologics budgets, like in the United States, are going up. So, I think it is a driver. Of course, what it also means is the originator drug faces a lot of losses in Europe, typically. Herceptin or Humira have faced some pretty brutal competition from biosimilars in Europe, but they've benefited from close to 16 years of monopoly before that, and they have earned their return on investment. So, I think that's fair.
Piedade: You also see examples of biosimilars enabling certain originator medicines to be used. I can think of 1 specific case where an originator medicine was not being used in the United Kingdom, because it was used in a [very costly] combination with another product, and when that second product became a biosimilar, then [the National Institute for Health and Care Excellence] reviewed their recommendations and said, Well, now that you have a biosimilar, this combination treatment makes sense from a pharmacoeconomic perspective. So, biosimilars are acting as enablers.
Van den Hoven: I would add that this combination approach is the tendency in Europe, at least for the originator industry, so as parts of combinations become biosimilars, you will dramatically reduce the overall cost of the combination. This is one of the dynamic effects of competition—it actually is one of the drivers of innovation, at least in the European context.
CfB: Are policymakers in European markets more fond of the single-tender system than biosimilar developers?
Van den Hoven: It depends on what you mean by policymaker. With regard to certain payers, yes. Their key performance indicator is how much have I saved with this biosimilar? and they report to their bosses who, in one way or another, are the ministries of health in Europe, in the different countries, and so they say, “Well, we save so much by using biosimilars,” and “Isn't it fantastic?!” and they get patted on the back. However, some of the payers are starting to realize that's not ideal if the biosimilar players who didn't win the tender start exiting the market. And that's where we see changes, like in the United Kingdom or in Denmark, where they're starting to say “Maybe I can run a victory lap this year, but next year I might not do so well. So, it's better for me to reconsider these models.”
We’re having conversations with some of those players, and they're not embracing this totally, but they're open to consider it and to start to move. Diogo has had very in-depth conversations with the Danish central purchasing authority, if you wish. And they have not done exactly what we wanted, but they have changed their approach toward tenders.
Another thing that's happening in Europe is that in the hospital setting, there's more and more of a realization that tender models have an impact on how many companies are willing to participate in the market, and eventually, with older generics, at least, this can create out-of-stock situations, or even worse. I think this is really sinking in now, as well. It's forcing payers to rethink this. I think if you speak to the ministries of health, they're much more on board with this thinking—even the German regulatory authority [Federal Institute for Pharmaceuticals and Medical Products, BfArM]. That’s the regulatory authority for chemical products, not for biological products; but nevertheless, it even has on its website recommendations that hospital tenders in Germany should follow certain rules, like have multiple winners. So, it's slowly percolating and changing over time, but there's still some work to do. And there is still some opposition, for sure, from some of the payers in particular.
Piedade: In terms of an increase in the number of tender winners, definitely, it’s something we’re starting to see. Also, we’re not talking about price as the sole criterion for awarding the tender. That’s also a direction we’re slowly moving toward. And we, as biosimilar players, also acknowledged that a race to the bottom does not create healthy competition over the long term.
CfB: Did you not see a need to create a scorecard for every country in Europe?
Van den Hoven: We would have liked to have done all the countries, but even going to this level of detail for 12 countries was a pretty intense level of activity. The other thing is, biosimilar policies are a little bit in motion. So, countries that are not succeeding with biosimilar uptake are obviously starting to introduce changes and learn from the others and contacting us—“How do we do this, etc.” So, as you work on one of these reports, it's a kind of moving target as well, and so it would have been a pretty heavy exercise to go after all of the countries. I think what we capture here is the majority of the market and a good subset of case studies. If you take all of these countries combined, you can more or less apply the different models to the other markets, because there are some similarities.
Piedade: What we did was obviously we went for the top 5 EU countries. We chose the Nordics because they are regarded as leaders in biosimilars, and we wanted to take a deeper look and see what can be improved from their experience. We also looked at Eastern Europe, an area where we know they have quite a challenging landscape in terms of patient access, still. And then we looked at the Netherlands, which has a bit of a different system and a different model compared with all the others. So, we tried to capture, if you will, different major groups within Europe to give a good understanding of how the policies play a role there.