December 1 2022
Biosimilar medications bring cost savings to healthcare systems and increase patient access to high price biologics. However, the adoption of biosimilar medications has seen some obstacles. Manufacturers have had to navigate the complex regulatory and market access landscape in the EU and address the fragmented legislations in different regions. Further, it is crucial for companies wanting to break into the biosimilar space to understand the role played by three main stakeholders – payers, patients, and physicians. Their varying influence on biosimilar uptake, as well as the different strategies needed to garner the support of each stakeholder for biosimilar adoption are important to explore. The upcoming loss of exclusivity for blockbuster biologics such as Keytruda stands to significantly widen the biosimilar market, and it will be interesting to see how manufacturers navigate this.
Since they first emerged in 1980, biologic therapies have changed the treatment landscape for various indications including asthma, cancers, and autoimmune diseases. However, the high cost of biologics caused by huge research investments, and expensive development processes and materials, make them less accessible to patients than traditional small molecule drugs. (1)
The European Medicines Agency (EMA) describes a biosimilar as a ‘biological medicine that is similar to another biological medicine that has already been authorized for use’. (2) The European Union (EU) has been a frontrunner in the adoption of biosimilar medicines, with the EMA being the first regulatory body in the world to define a consistently monitored and updated policy and legal framework for biosimilar approval. (2) Since its approval of Omnitrope® in 2006, the EMA has approved 86 biosimilars, allowing them to capture 10% of the total biologics market value by May 2021, producing over $20 billion of savings in Europe (3,4,5).
Within the next decade, blockbuster biologics such as Stelara, Keytruda and Entyvio are going to be falling off the patent cliff, significantly widening the biosimilar market space. However, biosimilar players will encounter substantial barriers when competing with originators for a share of the market. Unlike traditional generics which can often be priced 50% lower than branded medications, biosimilars require complex processes and expensive materials allowing discounts up to only 35% compared to originators. (6) Further, based on current practices, companies are expected to face difficulties in navigating the complex regulatory space in the EU, having to address fragmented policies according to the region and developing suitable strategies to ensure the success of bringing their biosimilar product to the European system. This is made even more challenging by the role in played by a trinity of major stakeholders – payers, patients, and physicians - who influence biosimilar uptake to varying degrees based on patient type and geography even within the EU. Thus, gaining an in-depth understanding of the regulatory and access nuances of each European market is crucial for biosimilar manufacturers to lower barrier to entry and maximize likelihood of success.
France’s single payer system has set up its drug pricing system to stimulate competition between biosimilars, for their reference originators to realize significant cost savings and ultimately increase the uptake of biosimilar therapeutics
Biosimilar therapeutics represent 48% of the biologic market in France. (7) In 2014, the French National Agency for the Safety of Medicines and Health Products (Agence Nationale de Sécurité du Médicament et des Produits de Santé, ANSM) proposed a Social Security Financing Act to introduce a provision allowing pharmacists to substitute biosimilar drugs under appropriate circumstances unless expressly prohibited by the prescribing physician. (8,9) This measure was difficult to implement as the official decree was never published by the French government and ended up being cancelled by the Social Security Financing law in 2020. (10) However, recognizing the vast health insurance savings brought about by the development of biosimilars, various other incentive measures have been adopted to widen the uptake of biosimilars in France. Eventually, on April 14th of this year, the Social Security Financing Act 2022 re-instated the provision allowing pharmacists to substitute biosimilar drugs under strict circumstances. (10) The ANSM has proposed a step-by-step implementation of the substitutions with biosimilars to ensure proper use and safety by initially targeting only two groups of substitutable biosimilars – pegfilgrastim and filigistram, allowing sixteen drugs to be included in the new decree (11).
In addition to enabling pharmacists to automatically operate the substitution, France’s single payer health insurance system and drug pricing model highly contribute to the wide uptake of biosimilar therapeutics. The centralized Comité Economique des Produits de Santé (CEPS) sets a national tariff for each new therapeutic entering the market. However, drug adoption and final pricing are negotiated independently between the individual hospital or hospital-purchasing group and the manufacturers, which typically offer significant discounts to be included in their formulary. (12)
When the CEPS negotiates a national tariff for each product, these prices are paid to the hospitals administering the drug, rather than to the manufacturers themselves. Typically, biosimilars are discounted at rates of 30-40% from the reference biologic from the date of commercialization, (13) with hospitals therefore relying on them to stimulate competition and drive prices down. (12) The hospitals and hospital-purchasing groups are therefore incentivised to negotiate low prices for biologic therapeutics as they are allowed to retain half the difference between the national tariff and the prices they are able to negotiate. (12)
Under the Social Security Financing Act of 2022, biosimilar substitution is to be implemented gradually to take into consideration the issues of patient safety, acceptability by physicians, patients, and other stakeholders, as well as compliance with all other schemes encouraging the use of biosimilars. Over time, the ANSM is expected to widen the list of originators for which biosimilar substitutions are allowed, leading to wider biosimilar uptake and greater cost savings.
The United Kingdom has tasked the MHRA to shape the post-Brexit market to attract a wide variety of biosimilars, which can facilitate competition to support the existing multi-tender system
In 2021, eight out of ten of the most expensive drugs used by the National Health System (NHS) in England were biologics. Access to biosimilars, which are often priced at approximately 30% lower than their originators, can lead to great savings for the NHS. (14)
Although loss of exclusivity will dictate the time to market, the Medicine and Healthcare products Regulatory Agency (MHRA) will play a significant role in shaping the post-Brexit biosimilars market. (15) Up until this point, most biosimilars have entered the UK as part of the European Medicines Agency (EMA)-centralised licensing process. Whilst companies can continue to access the UK market through the EMA process, they will now be offered the choice of applying for accelerated UK market entry before going through this route. Significantly, as stated in the MHRA consultation on the licensing of biosimilars, the difference between the accelerated pathway proposed by the MHRA and the EMA’s 150-day accelerated assessment is that, in most cases, an efficacy trial comparing the biosimilar with its originator will not be required if justification is provided. Additionally, the MHRA will be willing to accept real-world evidence rather than requesting animal studies as these will not be relevant for showing comparability between the biosimilar and originator. Therefore, whilst the timelines between the MHRA and EMA regulatory approval processes are very similar, the arguably less demanding MHRA process can offer a route to market that may involve significantly lower investment on behalf of the submitting company, attracting a wider variety of biosimilar products to increase competition across all biosimilar categories, likely representing the main determinant of success of the multi-tender system currently in place. (15)
Four regional tenders in England offer multiple business opportunities for biosimilar manufacturers and ensure that price discounts are rewarded with an appropriate biosimilar volume. Biosimilar uptake is facilitated by national and regional guidance which recommend the use of the most cost-effective drugs. In contrast to France, gainsharing was not commonly implemented due to complexity of splitting generated savings between Clinical Commissioning Groups and hospitals this is expected to change with the formation of new Integrated Care Systems (ICS) that will include both CCGs and hospitals.
While the decision to prescribe biosimilar medicines lies with physicians, patients and their families or carers are often consulted, motivating the NHS to work closely with patient groups to educate about biosimilars. (16)
Overall, the UK biosimilar market is rapidly growing largely due to the highly competitive landscape, but also because of the education of patients and physicians and best-practice sharing among regional commissioners.
Mandatory discounts and single-winner tenders have led to inconsistent biosimilar uptake across regions in Italy
In Italy, biosimilar uptake has been steadily increasing, with annual economic savings of €130 million estimated solely for anti-TNF-α biosimilars between 2019 and 2022. (17) This has been incentivized by biosimilar policies both at the national and loco-regional levels. At the national level, the Italian Medicines Agency (Agenzia Italiana del Farmaco, AIFA) has so far issued two concept papers on biosimilars to promote their use (18,19). In these, AIFA has positioned biosimilars as interchangeable, safe, and effective therapeutic alternatives to related originators both for naïve and non-naïve patients, and even for extrapolation of therapeutic indications. For pricing and reimbursement negotiations, AIFA has also mandated biosimilars to be priced at a minimum 20% discount to the originator with the intention of achieving savings by developing a competitive market (20). However, despite national regulations, biosimilar uptake has witnessed great variability across the country due to different policies adopted by the Regional Health Authorities (RHAs) in Italy’s twenty regions and two autonomous provinces, who are fiscally responsible for procuring biosimilar tenders for their hospitals and local health authorities. (21) Tendering is limited to the inpatient sector, with no such element in place for outpatient settings, as biosimilars are excluded from “transparency lists” of equivalent medicines which would support automatic substitution at the pharmacy level. (21) While the regionality of tenders develops business opportunities for biosimilar manufacturers, they are awarded on a single-winner basis to the lowest bidder. Additionally, multi-winner tenders are only used when there are more than three biosimilars available, which limits sustainable market growth. (22)
Another factor relating to regional variability in biosimilar adoption is differential setting of prescription quotas by loco-regional payers, which serve as prescribing guidelines for physicians. (23) While RHAs may recommend predefined targets, local authorities have the autonomy to implement these quotas with related incentives/sanctions for physicians, or to further integrate them with additional guidelines set by them, thereby leading to irregular adoption locally. Moreover, these quotas are not binding, and there is currently no mechanism to ensure they are complied with. Hence, real-world data shows that the prescribing targets are not met in many regions. (24)
Despite the regional inconsistencies in uptake, Italy still looks to be a promising market for biosimilar entry, particularly due to the increase in educational activities aimed at disseminating information to physicians on market access pathways as well as tender agreements. These have been crucial to gain trust and buy-in from physicians, who hold the final decision-making power on interchangeability, prescribing and switching, as in most EU countries. (21)
Germany’s free pricing approach to biosimilars ensures healthy market competition amongst suppliers, while maintenance of prescription quotas and gainsharing activities positively influence prescribing behaviors
Over the last decade, Germany has proven to be one of the most successful markets for sustainable biosimilar uptake, mostly attributed to active participation by both payer and prescriber stakeholder groups in the country. Firstly, on the payer front, it is important to consider Germany’s multi-payer, not-for-profit private health insurance system, which comprises of more than 200 “sickness funds” (SFs) with a governmental overlay. (25) The high number of SFs along with a free pricing strategy for biosimilars (i.e. one that is not influenced by the prices of originator drugs) creates a competitive market access environment via contracting (26,27). Similar to most EU5 countries, this takes place at the hospital level for the inpatient sector. However, unlike most of its EU counterparts, Germany also allows for contracting elements in the outpatient setting, albeit in a limited capacity as part of discount contracts. These contracts are set up regionally between SFs and biosimilar manufacturers whereby rebates are offered by the latter in exchange for exclusive dispensation of their medicines. (26) These have been particularly prevalent for monoclonal antibodies (i.e. infliximab) compared to other biosimilars, such as epoetins, filgrastims and somatropins (27). On the other hand, SFs have also set up open-house contracts to achieve cost savings, in which manufacturers of both the originator and biosimilar drugs are allowed to participate. As the most widely utilized procurement mechanism, these contracts are freely set by the SFs whereby the suppliers have to adhere to pre-specified discount rates on list prices (4). While this promotes competitive pricing strategies, the approach has also been critiqued to restrict biosimilar uptake by limiting the price advantage of biosimilars versus originator drugs on list level (27).
Another element that has played an influential role in biosimilar uptake in Germany is the regional-level implementation of prescription quotas set by physician associations (Kassenärztliche Vereinigungen, KVs) in collaboration with SFs (28). The success of this cost-control driver has reportedly been attributed to effective monitoring and robust reporting of adherence, as well as sanctioning of non-adherence by the KVs. This has further been supplemented by gainsharing incentives, taking place at the level of the prescribers, who therefore play a pivotal role in biosimilar uptake. An example is the BioLike initiative, an agreement launched by Barmer GEK (SF) for gastroenterologists and rheumatologists from KV Westfalen-Lippe to improve patient quality of care (28). Under the contract, savings generated through biosimilar prescriptions were shared equally between prescriber groups and the SFs, which led to an increased use of infliximab biosimilars. A direct result of such initiatives is that the savings can be repurposed towards additional patient services, improved working conditions, monetary benefits, etc., making gainsharing a highly effective strategy to promote prescriber buy-in across regions.
While elevated levels of participation have been established for both payer and prescriber groups in Germany’s biosimilar market, another stakeholder group may also be entering the sphere of uptake influence: dispensers or pharmacists. In 2019, a bill was passed by the Act for Greater Security in the Pharmaceutical Supply System (GSAV) for substitution allowance at the pharmacy-level, beginning in 2022. This would enable pharmacists to exchange the reference medicine with a biosimilar, conditional to the: (25) Federal Joint Committee (Gemeinsamer Bundesausschuss, G-BA) recognizing interchangeability and, (26) prescriber not explicitly excluding the substitution (28). Despite divided views among prescribers on the value-add of this policy, it is expected to positively affect biosimilar market penetration and allow for additional significant healthcare cost-savings across Germany.
While physicians make the key decision on the prescription of biosimilars in Spain, the Ministry of health has begun developing an action plan to promote their use on a national and regional level
The 2020 report published by the Spanish Society of Hospital Pharmacists estimated that the Spanish National Health System (NHS) has saved over €2,400 million between 2009 and 2020 through the introduction of biosimilars for the treatment of inflammatory diseases and cancer. (29) However, patients receiving biologic therapies in Spain usually continue to do so despite the availability of alternatives (30), making biosimilar uptake lower in comparison to that in its European neighbors.
Without the authorization of the prescribing physician, pharmacists in Spain do not have the power to dispense a brand other than the one prescribed. (30) Further, there is no quota dedicated to the tendering of biosimilars, making physicians’ trust and prescribing preference a key barrier to their entry in the market. (31) Physicians’ uncertainties surround biosimilar medicines involve their doubts on their bioequivalence, extrapolation of safety and efficacy data without clinical trials targeting certain indications, their immunogenicity as well as the quality and manufacturing processes used. (32,15) These perceptions showcase the need for physician education as well as national recommendations and guidelines to support an increased uptake of biosimilars in Spain.
Another major barrier to the widespread utilization of biosimilars medication is the lack of patients’ knowledge and trust in biosimilars. (31, 34) As outlined in a recent study by Vandenplas et al. in 2021, patients must be provided understandable materials tailored to individual needs to inform them about biosimilars. (34) Patient groups are also becoming increasingly important targets to correctly inform patients about biosimilars. (34)
In 2020, the Spanish Ministry of Health began developing an action plan to promote the use of biosimilar medication on both a national and regional level. (29, 30) The decentralized nature of the Spanish NHS transferring health competencies to the 17 Autonomous Communities (AC) makes this two-pronged approach necessary, as each AC collaborates with the Ministry of Health to make its own decisions on budgeting, purchasing and provisions. (31) In their action plan to promote biosimilar uptake, the Ministry of Health ideates that biosimilars will be fixed to a lower price than the originator drug, thereby improving their uptake while also increasing savings to the system. (35) The action plan also proposes making it mandatory for physicians to prescribe by active substance rather than by brand where possible and giving pharmacists the power to dispense the less costly drug, allowing automatic substitution with the biosimilar if required. (35) However, this action plan currently remains under development due to push back from a variety of pharmaceutical stakeholders.
Biosimilar uptake is influenced further influenced by treatment status of patients
The use of biosimilar alternatives has historically been more prevalent in ‘naïve’ patients who have not had therapeutic exposure to originator biologics (13), with most European countries allowing the automatic substitution of biosimilars for naïve patients without the input of the patients or HCPs. (13) In the past, the same countries that endorsed biosimilar prescription for naïve patients did not recommend making the switch in patients already treated with branded biologics. (13, 29) Recent ‘switch studies’ investigating the consequence of switching a patient’s medication to a different biosimilar have highlighted that there is no negative impact on safety and effectiveness of the therapy by doing so and are driving the prescription of biosimilars in patients who are already on biologics. (36,37)
Countries like France and Italy have recently passed legislations allowing the automatic substitution of biosimilars for patients with existing prescriptions for biologics. Prior to this, explicit consent from the patient was required to allow the switch to biologics, making patient education a barrier to the uptake of biosimilars. (13) More countries are moving towards a system which stresses that final decision-making power rests with the prescribing clinician, and that switching is in general recommended, or at least not prohibited. Switching recommendations are largely bound to certain preconditions, such as shared decision-making and close monitoring. (36)
The biosimilar market is dynamic and rapidly expanding and biosimilar medicines hold the potential to broaden patient access to costly advanced treatments and alleviate the economic burden on health systems in the EU. The varying influence of payers, physicians and patients on biosimilar uptake makes it crucial for manufacturers to develop strategies targeting all three stakeholders for the increased biosimilar adoption. Having realized the huge cost-saving potential of biosimilar medication, many payers have begun implementing frameworks encouraging the use of biosimilar medicines. The importance of the education of patients and physicians on the availability and practicality of biosimilars has also been emphasized.
Within the next half decade Keytruda, Stelara and Entyvio, amongst many other biological blockbusters, stand to lose their exclusivity (LOE). A string of biosimilars for Humira have already been developed since its LOE in Europe in 2018 with nearly 35% of European patients switching to biosimilars, showcasing the increasing competition in the space. It will be of interest to see how manufacturers navigate the complex regulatory space and traverse the relationships between the three main stakeholders to take advantage of these huge impending LOEs and increase the uptake of biosimilar therapeutics in Europe.