LONDON, Oct 31 (APM) - Payers must avoid biosimilars pricing policies that “artificially hinder competition” and “force dramatic downward pricing pressure on manufacturers”, according to a multi-stakeholder EU-wide report into biosimilars market access.

It said “payers must avoid arbitrary, prescriptive pricing policies that place artificial downward pricing pressures on manufacturers. Payers should allow companies to compete freely on price,” noting that restrictive policies would only serve to create unsustainable markets.

The recently-published paper, titled ‘Factors supporting a sustainable European biosimilars medicines market’, was compiled by consultancy firm GfK Market Access on behalf of the European Biosimilars Group, a division of the European Generic Medicines Association (EGA). Conclusions were based on contributions from 71 experts and policy influencers at both the national and regional level, and multiple stakeholder groups.

As an example, it highlighted the pricing policy in Austria, “one of the most draconian pricing policies in Europe”, which has deterred companies from launching biosimilars there.

Known as a ‘mandated discounting policy’, the same policy is applied to generic medicines as it is for biosimilars. Under the scheme, the first biosimilar is priced at 52% of the originator. If a second biosimilar is launched, it is priced at 44% of the originator, while the originator must also drop its price to 70%. If a third is launched, all three biosimilars plus the originator must drop their prices to 40% of the originator’s price.

“In reality … companies have opted not to launch in Austria and no third biosimilar has come to market in Austria yet,” the report said.

At the other end of the spectrum, stakeholders showed support for a completely unregulated pricing system, “the best way to foster competition, which will likely lead to significant cost savings, compelling differentiated product packages, or a combination of both,” the report quoted one stakeholder response.

But a likely outcome would be a combination of some kind of mandated discounting and unregulated pricing system in each country, the report suggested.

Currently, there are variations across Europe over decisions to carry out cost-benefit assessments of biosimilars, including within the UK alone: In Scotland, all biosimilars undergo health technology assessments (HTAs), but in England and Wales, NICE has reviewed just one biosimilar and has said there is no need to assess any others.

Most stakeholders feel there is no need for an HTA assessment for biosimilars, the report found. This was because their cost utility and clinical benefit is essentially the same as the originator.

In addition, the added time and cost of compiling HTA submissions will add an extra cost burden to manufacturers as well as payers, and the HTA process is likely to delay market entry. GfK concluded standard HTAs for biosimilars would therefore be “futile”.

However, the report outlined two scenarios in which HTA might be considered necessary. The first is when the originator product has not been recommended for reimbursement, based on cost. The second is when the originator product has been subject to a conditional recommendation based on cost.

“In these circumstances, the originator product may be able to demonstrate cost-effectiveness… where the originator has not,” the report said.

The report also included a study of cost savings, carried out in seven countries: France, Germany, Italy, Poland, Hungary, UK and Spain. Quantitative modelling was based on three biologicals: Herceptin, Avastin and Humira.

The study estimated that savings of 26%, 24% and 25% could be made through the launch of biosimilars of Humira, Avastin and Herceptin, given the existence of sustainable markets in Europe.

Including pricing, the report outlined a comprehensive framework to achieve sustainability: a four-element approach, all of which are essential. Policy work is needed around: education and understanding, experience and use, sustainable pricing, and rational decision-making. Achieving some, but not all of these goals, “will lead to an unsustainable biosimilars market”, the report said.

It said that policies in isolation, relating to pricing, switching, substitution, indication extrapolation, evidence development, clinical guidelines and biosimilars assessment and access decisions, are important building blocks for a sustainable market. However “it is the effect of policies in combination that will deliver, or fail to deliver, a sustainable market.”

The study also goes on to say that certain policies will make a stronger contribution to a sustainable market than others: namely focusing on education, confidence and trust in the medicine, by the prescriber and subsequently the patient.

It identified that physicians are those most responsible for the early adoption of innovation and warned: “It will take time for physicians to gain sufficient experience with biosimilars medicines to such a degree that they will willingly share control with pharmacists.”

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