by Peter O'Donnell
BRUSSELS, Sep 20 (APM) - The gulf in understanding between European producers of biosimilars and national healthcare payers threatens the development of the emerging industry, manufacturers have said, insisting that the benefits they can deliver are dependent on a shake-up of health system policies.
According to a report commissioned by Medicines for Europe, the industry grouping representing generic and biosimilar companies, there has to be an alignment of payers' and manufacturers' understanding of the short, medium and long-term benefits of biosimilar medicines if a sustainable policy is to be put in place.
While biosimilar manufacturers expect pricing and market access policies to more intensively drive biosimilar uptake, only few payers see the need to improve current guidance in this respect, says the report, based on interviews with payers in seven European markets and published on Monday.
Manufacturers recognise that biosimilar medicines should be priced below originators, but they are keen to limit price erosion, especially in the early years, and are especially keen to avoid mandatory discounts.
The priority of payers is diametrically opposed. They aim for high price erosions immediately after biosimilar launch, and are interested primarily in short-term savings that will help them meet annual budget targets.
And even where mandatory discounts are not the principal tool deployed by payers, they can achieve rapid price erosion indirectly through pricing and market access policies that induce manufacturers to give unusually high voluntary price concessions.
The report details the situation in Norway, where a system of national single-winner tendering drives high voluntary price concessions from companies keen to obtain access to the market.
Whenever manufacturers argue for a reasonable price level to cover their investments in biosimilars, payers are mainly interested in generating savings.
Biosimilar manufacturers try to argue for a fair return on investment, advancing a commercial business case, citing the risk of not covering their upfront expenditure and potentially not being able to further invest in future biosimilar development, but, the report finds, payers "do not trust manufacturers' argumentation."
Payers claim that current pricing and market access policies sufficiently take into account the complexity of biologics. This is contested by manufacturers, who still see room for improvement, comments the report.
For manufacturers, healthy competition is the best way to encourage an efficient market. Payers, by contrast, mainly see benefit in the increased bargaining power they enjoy through a divide-and-rule approach that leaves only single suppliers in the market.
"Coexistence of multiple biosimilar manufacturers for one active substance is not necessary. It is sufficient if the tender winner serves the market," the report quotes one unnamed payer as remarking.
These fundamental differences in perception leave the industry vulnerable to policies that could endanger its future, concludes the report.
"While payers strive for short-term savings, biosimilar manufacturers aim for sustainable financials in the long run," it says.
The meeting of minds that could change this is still remote, the report suggests, since "most payers feel adequately informed about biosimilar medicines."
The report identifies some areas where there is already a clearer understanding between industry and payers.
Germany and the UK in particular are mentioned as markets already supporting a sustainable biosimilar business.
In Germany, target agreements including biosimilar quotas are used to leverage biosimilar uptake, and many health insurance funds create opportunities for market access via tendering or open-house contracts, while gainsharing at the physician association level also supports uptake.
In the UK, four regional tenders offer multiple business opportunities for biosimilar manufacturers and ensure that price discounts are rewarded with an appropriate biosimilar volume/uptake. National or regional guidance that recommends usage of the most cost-effective drugs also promotes biosimilar uptake.
Biosimilar medicines can help governments in Europe to increase patient access to modern treatment while keeping healthcare budgets sustainable.
Other countries studied include Spain, France, Italy and Poland.
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