Category: Legal

Abstract: Biological and biotechnological medicines are important pharmaceutical innovations due to their influence on the treatment of many conditions and because they have led the way in devising new and innovative pharmacological therapies. In addition, biosimilars, which can be authorized on the date of expiry of a biological originator’s patent, give an opportunity for the sustainability of national healthcare services. This paper explores aspects of Italy’s 2017 Budget Law that emerged following a heated debate on legal doctrine and jurisprudence about biosimilars, the automatic substitutability between biological and biosimilar products, the purchasing processes of such medicines, and also on physician’s freedom of prescription. This Law encourages the widespread adoption and use of biosimilar products, which is pivotal to making these next-generation medicines more economically viable for use in hospitals. It also sets out some principles that define the regulatory framework that always ensures the physician’s freedom of prescription is a priority, as is patients’ safety and protection.

Submitted: 19 November 2018; Revised: 19 January 2019; Accepted: 21 January 2019; Published online first: 1 February 2019

Biological originators and biosimilars: regulatory frameworks in the EU and Italy

According to the European Medicines Agency (EMA), a biological medicine ‘contains one or more active substances derived from a biological source; some of these active principles may be already present in the human body, for example, proteins such as insulin, growth hormone and erythropoietin. Biological medicinal products are also larger and more complex molecules than non-biological medicinal products. Only living organisms are capable of reproducing such complexity’¹. In general, they are products derived from substances present in animals or humans, modified or synthesized in a laboratory, yet maintaining a similar structure and the characteristics of the related compound that is synthesized by the human body. Therefore, as they consist of living material with complex structures, biological medicines ‘have an inherent degree of minor variability (microheterogeneity) which must fall within the acceptable range to ensure consistent safety and efficacy’².

The Position Paper on Biosimilars of 13 May 2013, prepared by the Italian Medicines Agency (Agenzia Italiana del Farmaco, AIFA)³ on the basis of Doc. Ref. EMEA/74562/2006 Rev. 1 (and confirmed by its second position paper, published on 28 March 2018) clarifies the distinction between biological medicines and biotechnological medicines. It states that biological medicines contain an active principle that is a substance produced or extracted from a biological system; and biotechnological products contain an active principle that is a substance derived from a biological source through biotechnological procedures, including: recombinant DNA technologies, controlled expression of genes coding biologically active proteins in prokaryotes and eukaryotes, hybridoma and monoclonal antibody methods. In general, these biological medicines can be effective in delivering targeted and selective therapy, against a single structure, receptor, protein or DNA sequence (the so-called Target Therapies). In contrast, biological medicines have complex protein structures, high molecular weight, and their effects depend on their chemical composition and three-dimensional shape. In addition, they are produced via particularly difficult production techniques that have many variables that are hard to control and also undergo a highly complex purification process. They have, therefore, far greater structural complexity than their traditional, chemically-synthesized counterparts⁴.

As a result of these differences, a distinction between ‘simple’ and ‘complex’ products has been outlined within the category of biological medicines⁵. Simple biologicals are those having less structural complexity and limited instability and alterability, such as growth hormones, erythropoietins and G-CSF medicines. Complex biologicals include monoclonal antibodies that have higher structural complexity, originate from a much more sophisticated production process (which leads to a higher probability of post-translational modifications), and are intended for more critical healing purposes, such as adjuvant cancer therapy.

According to EMA, a biosimilar can be defined as ‘a medicine highly similar to another biological already marketed in the EU (the so-called reference medicine)’⁶. This is because ‘the active substance of the biosimilar medicine is equivalent to the one contained in the reference biological medicine. Biosimilar medicine and reference biological medicine are generally used in the same dosage to treat the same diseases’ ⁷. Here, the reference to ‘equivalence’, and not to the exact identity of the active substance itself, is a concept that pharmacologists originally developed to qualify the relationship between the traditional originator medicine and the generic counterpart. With respect to this, it is required that the biosimilar does not show ‘clinically meaningful differences compared with the reference medicine’ ⁸. As previously explained, each phase of production is difficult to reproduce due to the presence of many variables that are hard to control and a highly complex purification process. Therefore, modifications made to procedures that are already in use can induce a certain unpredictability in the biological properties of the medicine, which may change its quality, pharmacokinetic and/or pharmacodynamic characteristics and clinical activity⁹. It is therefore understandable that, of biologicals, the biotechnology industry says, ‘the process is the product’ ¹⁰, thus establishing a conceptual and teleological integration between the production process and its result. For this reason, the authorization procedures for biosimilar medicines require the implementation of preclinical and clinical trials to demonstrate that their safety and efficacy comparable to their corresponding originator’s.

In Italy, this distinction between biological originators and biosimilars is established by Paragraph 7 of Article 10 of Legislative Decree No. 219/2006, which, reflecting Article 10, Paragraph 4 of Directive 2001/83/EC, as amended by Directive 2004/27/EC, states that ‘when a biological medicine similar to a reference biological medicine does not meet the defining conditions of the generic medicine on the account, specifically having differences relating to raw materials or to the production process of the biological medicine and of the reference biological medicine, the applicant shall provide results of appropriate pre-clinical tests or clinical trials related to such experimentations’. When compared to the requirements for authorization procedures for a generic medicine, which only require conducting bioavailability studies to demonstrate its equivalence to the reference medicine, this legislation requires additional data, as well as the submission of clinical and preclinical studies in relation to the originator biological reference medicine, commonly referred to as the ‘comparability exercise’ ¹¹. Once comparability is determined in terms of safety and efficacy, the same safety and efficacy data can also be used to approve other indications of the reference medicine with consequent reduction of clinical studies.

This is the principle of extrapolation, which is not, as EMA takes care to point out, specific to biosimilars only, and is also adopted in the event of significant changes to the originator’s production process. However, adopting a precautionary approach, EMA itself states that the application of the extrapolation principle cannot be generalized. If ‘data from a given indication [are not] directly applicable in terms of safety or efficacy to an indication falling within another therapeutic area where the mode of action, posology or pharmacokinetics may be different’, or if the mechanism of action of the active substance is complex and involves multiple receptors or binding sites (the specific contribution of which is difficult to assess as it is often the case with monoclonal antibodies), granting applicability for further indications might be allowed after additional clinical studies have been conducted¹².

In regard to the biological approval process in Italy, it should also be stressed that, according to the combined provisions of Article 3 and of Annex to Regulation (EC) No. 726/2004, medicinal products developed by means of biotechnological processes such as:

• recombinant DNA technology,
• controlled expression of genes coding for biologically active proteins,
• in prokaryotes and eukaryotes including transformed mammalian cells,
• hybridoma and monoclonal antibodies methods,

as well as those intended for specific indications, e.g. cancer, neurodegeneration and autoimmune diseases, must be authorized in accordance with EMA’s centralized procedure. The European Commission’s Authorisation Procedures for Medicinal Products is derived from this centralized procedure and is usually followed by hospital administration regimen (Article 92 of Legislative Decree No. 219/2006)¹³. Price and classification of biological medicines for reimbursement purposes are regulated by the Interministerial Economic Planning Committee (Comitato interministeriale per la programmazione economica, CIPE). Resolution No. 3 of 1 February 2001, is applicable in accordance with the timetable and costs referred to in Article 12 of Law No. 189/2012, as amended by Article 44 of Law No. 98/2013, if the biological medicine is ‘orphan’ or has an exceptional therapeutic benefit. It should also be noted that Article 9b of Law No. 125/2015 added Paragraph 33a to Article 48 of Law No. 326/2003, states that, upon expiry of the patent of a biological medicine’s active substance and in the absence of any initiation of a concurrent price negotiation process for the corresponding biosimilar, AIFA should initiate a negotiation procedure with the holder of the marketing authorization for the biotechnological originator, in order to achieve a reduction of its reimbursable price charged to the National Health Service (Servizio Sanitario Nazionale, SSN). This provision is in place due to the legislator’s intent to make savings on expenditures and is actioned even if the development of the biosimilar may be diachronic and delayed with respect to the patent’s expiry date due to the greater complexity of its production process.

Overall, the reimbursable price regulation applicable to generic medicines can also be applied to biosimilars. As a result, Article 1 of the Decree-Law No. 323/1996, converted into Law No. 425/1996, establishes that any offer of a price that is at least 20% lower than the originator medicine price, automatically also leads the biosimilar to have the same Class A assignment as generic medicines.

Efficacy, safety and pharmacovigilance: naming originators and biosimilars

In general, when marketing authorization has been granted this offers a reasonable guarantee that the efficacy of the medicine has been met, based on the adequacy of the clinical data obtained¹⁴. Similarly, during the marketing authorization procedure, the analysis of the safety profile is important to the risk-benefit assessment of the medicine and is the first step towards the marketing authorization and the subsequent use of said medicine. In general, the greater or lesser safety, as well as any residual margins of uncertainty in that regard, can diversify the various medicines. With respect to this, the degree of safety constitutes a factor capable of influencing the choice of any purchasing institutions and prescribing physicians; and can thus be significant in relation to the competitiveness of the product. It is therefore useful to note that, alongside the general statements of EMA, that underline that ‘no differences are expected in safety and efficacy between originators and biosimilars’ ¹⁵, European legislation contain multiple interventions inspired by a more cautious approach, which have been transposed into recent Italian regulations that relate to the public supply of originators and biosimilars.

According to European legislation, the safety verification of the medicinal product does not end with its authorization. Instead, it continues to be of paramount importance during its subsequent marketing so that any possible risks not identified during the trial period can be determined. More focus is placed on biologicals than on chemically-synthesized medical products, and a clear line is drawn between the originator biological products and the corresponding biosimilars. The European legislator’s and Italian regulatory agencies’ views converge as they both require that there is increased pharmacovigilance with respect to recently authorized biosimilars than for biological originators already on the market. This is expected to increase the efficiency of the national healthcare system and ensure public health protection¹⁶. With respect to this, Regulation (EU) No. 1235/2010 and Directive 2010/84/EU foresee the possibility of imposing the obligation to conduct post-authorization studies on safety and efficacy (the so-called PASS and PAES) on the new marketing authorization holder for a better public health protection (see, in particular, the whereas No. 16 and No. 17 of the Regulation (EU) No. 1235/2010), so that the information on available medicines at the time of their authorization is complemented after marketing is initiated.

Such an obligation may be imposed if some therapeutic indications have been granted for the new biosimilar by EMA through extrapolation¹⁷, without them being extended to the corresponding originator. It is evident that, in this case, the post-authorization studies are aimed at concretely attesting the safety and efficacy of the medicinal product in the ‘extrapolated’ indication, in order to confirm the assessment that the regulatory authority has released in the absence of specific clinical studies¹⁸.

Furthermore, Article 23 of Regulation (EU) 1235/2010 states that EMA shall set up and maintain a list of medicinal products subject to additional monitoring, to which both the newly approved originators and biosimilars are subject¹⁹, thus equating the requirements for newly marketed biosimilar medicines (essentially complex monoclonal antibodies) with those intended for medicinal products containing a new active substance. It is therefore significant that the legislation aims to achieve a day-by-day confirmation of the safety profile established at the time of the marketing authorization, not only for new biological originators, but also for biosimilars, which were also previously authorized on the assumption that they have substantial comparability to other products on the market and, therefore, they should not need to meet any additional requirements.

From this standpoint, therefore, the marketing authorization for biosimilars is, above all, based on the requirement to establish a presumption of safety of the product, capable of achieving ‘fool proof’ status by effectively carrying out the post-authorization studies laid down by the existing legislation and by the additional monitoring.

Consequently, in order for the healthcare professionals to clearly distinguish biosimilars and newly authorized originators subject to additional monitoring from all other medicines, marketing authorization holders are obliged to include the statement ‘This medicinal product is subject to additional monitoring’ (Article 25, Paragraph 5, of Regulation (EU) 1235/2010) in the Summary of Product Characteristics (SmPC) and in the package leaflet. This is preceded by the upside-down ‘black triangle’ symbol. European legislation aims to make the identification of medicinal products subject to additional monitoring clear, not to scaremonger, but to alert clinicians that the current knowledge about the product is yet to be completed with the help of ongoing action. In addition, in order to ensure proper monitoring of biological originators and biosimilars ‘because of their specific safety profile’ (see Regulation (EU) 198/2013, Whereas No. 1), their brand name plays a key role. It should be used continuously by physicians at the time of prescription, and Member States shall ensure its correct tracking and identification accordingly²⁰.

As also stated by the doctrine²¹, for the purpose of pharmacovigilance, the European Union (EU) legislation requires the identification of the product by its trade mark, as identification by the name of the active substance alone is not enough. The conceptual assumption of the provisions of the EU lies in awareness of the scientific alterations of each originator and its corresponding biosimilar(s), which enables them to be identified as separate entities at the time of prescription and facilitates the monitoring of the specific biological medicine taken by the patient²².

As further support to the importance of the name of originators and biosimilars, the World Health Organization (WHO) has also intervened within its field of competence related to the development of international standards for medicinal products, taking a stance with particular reference to International Nonproprietary Names (INN) which is namely the ‘generic name’ used to identify the pharmaceutical substances or the active ingredients²³. WHO has stressed the need to change its current policy on attribution of INNs to biological and biosimilar medicines due to the complexity of their production, which is considered as a crucial step in defining the product’s final features. For this reason, and to prevent a possible accidental transition from originator to biosimilar and vice versa (the so-called switch, which we will further focus on in the next paragraph), may compromise the safety profile of the product, WHO (within the framework of the 55th INN Consultation held in Geneva in October 2012) suggested that biosimilars based on the same active substance should be identified by combining the common name with a suffix or an identifier, so as to be distinguishable from their originators. Lastly, in October 2015 the INN Expert Group suggested that WHO adopt a system of Biological Qualifiers (BQ)²⁴ that will be assigned to all ‘biological substances having INNs, to provide a uniform global means of identification to avoid the proliferation of differing national schemes’.

Ultimately, it can be noted that the regulatory framework is very precautionary, as it diminishes or even ignores the notion of equivalence of biological medicines, and therefore (as will be clarified later) limits the indiscriminate use of substitution, switching and interchangeability. This approach inevitably affects the defining of tender lots and, by extension, competition among companies. The same level of precaution must also be transposed into the doctor-patient relationship, so that the latter may acquire information about their therapy and thus implement their right to self-determination, as is recognized by Italy’s legal system. By virtue of the constitutional principle that no health treatment may be carried out or pursued in the absence of the prior express consent of the person concerned (Article 32 of the Constitution of Italy), patients are entitled to receive adequate and comprehensive information on the treatment that they should be undergoing. Thus, they are able to independently perform a risk/benefit assessment of the medicine and to decide whether or not to receive the treatment²⁵. This is of particular importance in the case of hospital products, as their black triangle is not visible to the patients²⁶.

More specifically, due to their nature and the various precautions dictated by the regulations²⁷, such an obligation is also significant in the relationship between originators and biosimilars. It is therefore appropriate for the physician to assess whether to inform patients about their therapeutic choice, so as to let the patients exercise their right of self-determination²⁸. On the other hand, the freedom of choice is currently attributed to the healthcare practitioner and is paramount. European legislation places the final decision regarding treatment to be administered to physicians²⁹, with a preference for the medication they consider safer for the patient³⁰. Any liability for the chosen therapy also lies with the doctor, as confirmed by case law and national legislation³¹.

Biosimilarity, interchangeability, automatic substitution and switching

As specified by AIFA, the originator and its biosimilars are ‘essentially similar in terms of quality, safety and efficacy ’³², or, as stated by EMA, ‘no differences are expected in safety and efficacy’ ³³. These statements are based on the concept of biosimilarity, which cannot in any way be mistaken with therapeutic equivalence and is only applicable to medicinal products manufactured by chemical synthesis³⁴; and of a prognostic assessment made by regulatory agencies, pending the confirmation of the clinical data.

On the other hand, the current legal framework confers to AIFA the exclusive competence to determine whether there is equivalence among medicinal products containing different active substances, as a prerequisite for their grouping in the same tender lot³⁵. The practical application of this regulation generated significant litigations regarding public tenders for the procurement of medicinal products, including biological originators and their corresponding biosimilars³⁶.

Moreover, trying to clarify the interpretative and enforcement uncertainties related to these products, AIFA issued Resolution No. 204 of 6 March 2014, summarizing the guidelines for the correct enforcement of the aforementioned Article, thus defining the procedure for the provision of the equivalence assessment and the scope of the regulation. However, the ‘originator biological medicines and their corresponding biosimilars’ are excluded from said regulation. AIFA believes that the identity of the active substance and the assessment of biosimilarity through comparability studies carried out by EMA at the time marketing authorization was granted, may exclude the presence of clinical differences with their originators so considerable as to require an additional comparability assessment by AIFA. The same concept was subsequently confirmed with the more detailed Resolution No. 458 of 31 March 2016, which, following criticism from the medical community and litigation introduced by pharmaceutical companies, was revoked by AIFA ‘in autotutela’ (through self-correction procedure) with Resolution No. 1571 of 20 December 2016.

It can be argued that, by assimilating the assessment of equivalence to the regulatory assessment of biosimilarity, pursuant to Article 15, Paragraph 11b of Decree-Law No. 95/2012, AIFA actually intended to speed up and facilitate competition between originators and biosimilars, and to this end, came to a conclusion that, in pharmacological terms, this was rather hasty. Indeed, the same regulatory agencies do not seem to be totally persuaded that originators and biosimilars may be prescribed and administered ‘as if they were equivalent’, and for this reason, recommend that additional caution is required when they are prescribed. In this respect, it is necessary to recall that AIFA specifically stated³⁷, clarifying on several occasions that originators and biosimilars can be considered interchangeable only on the basis of the clinician’s assessment³⁸, and, above all, that they cannot be automatically substituted by pharmacists, who therefore cannot arbitrarily replace the decision of the prescribing physician upon dispensing the medicinal product. The pharmacist is therefore subject to a restriction of discretionary power attributed to them by Law No. 405/2001 regarding substitution of chemically-synthesized generic medicines, which can actually be ‘used as if they were equivalent’, and therefore administered in a fungible way. Therefore, according to AIFA, the choice of treatment, with a reference biological medicine or with a biosimilar, remains a clinical decision entrusted to the prescribing physician. Such a consideration also applies to patients already undergoing treatment. Here, the opportunity to switch remains entrusted with the doctor. When lacking any adequate switching studies³⁹, the physician is the only person empowered to decide on the possible switch among biological medicines, on the basis of the individual characteristics of the patient and after consultation⁴⁰.

With this in mind, public tender and the structuring of lots shall guarantee the physician’s prescriptive freedom and therapeutic continuity for patients already being administered with the originator or biosimilar, under sustainable conditions and at appropriate prices for the national healthcare system. The precautions recommended by the regulatory agencies, do not exclude fostering competition between originators and biosimilars, but do require that they are grouped in a single lot, especially in the early stages of marketing of the biosimilar, when there are certain margins of uncertainty about their effects. This does not preclude the plurality of choices available to the doctor⁴¹. As such, they provide separate lots for therapeutic continuity and potential exclusive indications⁴², and this also ensures that medicines not awarded through tender can be purchased, without constraints or restrictions being applied, which is also on the basis of the discipline provided by Article 1, Paragraph 407 of the 2017 Budget Law.

AGCM’s advocacy of biological originators and biosimilars

Although the first biosimilars have only been authorized in Italy for a few years, the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato, AGCM) has already managed their competitive relationship with originators on several occasions. For example, through the Recommendation of 22 March 2011, issued pursuant to Article 21 of Law No. 287/1990, the AGCM criticized a draft law under consideration in parliament that sought to prohibit the grouping of biological originators and their corresponding biosimilars in the same lot.

The specification of tender lots is potentially a delicate marketing phase as the identification of required products and their characteristics allows the contracting authority to identify the purchased good and select the participating drug companies. As such, this process is exercised by the institution in accordance to Article 30, Paragraph 1 of the Decree-Law No. 50/2016 (Codice degli Appalti Pubblici, Public Procurement Code). This Article states that medical supplies should be of quality, in accordance with the principles of economy, effectiveness, timeliness and fairness, and also ensures free competition, equal treatment, proportionality, non-discrimination and transparency. Similar aims, which should be reconciled with the need to ensure that physicians are free to prescribe the medicine they consider to be the most appropriate for the treated conditions, have traditionally been transposed by institutions through the issue of defined public tenders, so that each active substance, or even to each formulation, corresponds a single lot that is subject of independent and separate awards (the so-called ‘Simple Lots’). Despite this, some regions in Italy (Aree Vaste – large administrative areas) or hospitals, have decided to group different active substances in the same lot (the so-called ‘Composite Lots’), identifying, through the tender, only one medicine per pathology.

In the abovementioned Recommendation of March 2011, the AGCM pinpointed a potential distortion of competition, determined by what appeared as an improper segmentation of a single relevant market. According to the AGCM, the protection of health could have been safeguarded by means of tender clauses ensuring the therapeutic continuity of patients already treated with the biological medicine, without prejudice against the possibility that competition between originators and corresponding biosimilars in the same lot could guarantee greater savings to the purchasing institution.

In May 2013, the AGCM revaluated the competitive parameters related to public tenders of biological medicines⁴³ and confirmed its 2011 recommendation to strengthen the tender as a competition instrument, by directly comparing originators and equivalents or biosimilars upon patent expiry, and not only by renegotiating the supply price with the successful applicants on an exclusive basis. However, the AGCM also addressed the issue of exclusive purchasing of biological originators and stated that this should be allowed provided that they were subject to objective criteria (i.e. percentage of patients already treated versus naïve drug patients) and to subsequent revisions, in the event of a biosimilars’ competitive development. Although public tenders were believed to be a key competitive factor, the possibility of separate lots for originator biological medicines and biosimilars were considered. This provision, however, appears to no longer apply due to the most recent AGCM guidance on the competition relations between biotechnological medicines and their corresponding biosimilar versions, and due to the novelties introduced by the 2017 Budget Law.

On 17 November 2016⁴⁴, the AGCM expressed an opinion pursuant to Article 22 of Law No. 287/1990, in relation to Article 59 of the Draft of Budget Law ⁴⁵. Here, according to the AGCM, and in view of an incentive for the use of biosimilars, the provision that biotechnological drugs and their biosimilars should be purchased on the basis of framework agreements, should be appreciated. However, the AGCM strongly contested the choice of considering the maximum price as a basis for the purchase of biosimilar drugs, as setting the starting invitation to tender at the highest price level ‘discourages any possible stimulus to the presentation of competitive offers’. Instead, the starting invitation to tender could have been fixed at price levels attributable to the availability of several competing products. Furthermore, the AGCM stated that the application of such an instrument should be assessed in relation to the operational reality of biotechnological medicines purchases. The requirement that patients should be treated with one of the first three drugs in the ranking of the framework agreement, together with the specificity of these products (which restricts their number), implies that a fair proportion of all the products available on the market may be included in the purchase agreements (i.e. the reference biological and its few biosimilar versions). If this can be evaluated in a positive way, due to the guarantee of wide therapeutic availability for clinicians, the discipline of competition should be developed in order to stimulate comparison among suitable suppliers.

It should also be noted that there is investigation into the exclusion of any possible automatic substitutability between the originator and its biosimilar version, or among biosimilar versions of the same originator. More specifically, the AGCM acknowledges that the aforementioned Article 59 reiterates operational conditions already in force in Italy and it also notes that this position could block any possible future developments in the perspective of automatic substitutability between an originator biotechnological medicine and its biosimilars. Furthermore, in the opinion of the AGCM, the prohibition of issuing a call for tenders for medicines with the same therapeutic indications but different active substances could constitute an obstacle to direct competition of medicines with different active substances, not only in relation to biotechnological products, but also for chemical-based ones. In summary, the AGCM does not seem to fully transpose the recommendations of national and European regulatory authorities, and instead proposes its balance between public health requirements and the requirement to enhance competition. As will be explained in more detail in the following paragraphs, when drawing up the 2017 Budget Law, the legislator transposed some of the assessments set out in the abovementioned AGCM opinion of 17 November 2016.

Italy’s 2017 Budget Law

The choices of all parties involved in using biological and biosimilar medicinal products affect, directly or indirectly, the safety of the patients being treated with these medicines and the sustainability of the Italian National Healthcare Service. For this reason, all players involved are expected to act responsibly and as such: (i) pharmaceutical companies should market their medicine with both patients’ and National Healthcare Service’s needs in mind; (ii) physicians should be transparent and choose the most appropriate medicines whilst sharing all useful information with the patient to ensure they are actively involved with their treatment; (iii) public administrators should provide for tenders that take into appropriate account the specifics of the biological/biosimilar medications and the need to ensure that doctors have access to said medications when facing real clinical needs.

In order to ensure the above, the regulatory framework for the purchase of biological and biosimilar medicinal products by Italy’s national healthcare system has been definitively clarified by law No. 242 of 2 December 2016 (2017 Budget Law), which introduced, in Article 1, Paragraph 407, an amendment to Article 15 of Decree-Law No. 95 of 6 July 2012 (converted, as amended, by Law No. 135 of 7 August 2012)⁴⁶.

The key principles of Italy’s 2017 Budget Law are: (i) the prohibition of automatic substitutability between a reference biological medicine and its biosimilar or between different biosimilars; (ii) priority is given to the physician’s freedom of prescription; and (iii) the framework agreement acts as a tool in public procurement procedures for biosimilar medicines.

Automatic substitutability
In accordance with the 2017 Budget Law⁴⁷, the job of finding a biosimilarity relationship between a biosimilar medicine and its reference biological falls within the exclusive competence of EMA, while the medicine’s reimbursability assessment and the job of applying the rules to negotiate prices, falls within the scope of the AIFA’s exclusive competence. In addition, the law prohibits substitution between the biological originator and the corresponding biosimilar and between different biosimilars, as is already upheld by the case law⁴⁸. The concept of substitutability refers to the possibility of substituting a medicinal product with another more cost-effective bioequivalent with the same composition, form and route of administration. The bioequivalence must be confirmed by suitable bioavailability studies. In this context, it is the pharmacist who plays a crucial role in automatically substituting the medicine; and can even modify a therapy that has already been initiated, subject to the indication of non-substitutability issued by the treating physician⁴⁹.

As far as biosimilars are concerned, the European soft law entrusted each State’s Regulatory Agencies with decision-making autonomy on automatic substitutability⁵⁰. Although there is definitely similarity between biologicals and biosimilars, this cannot be understood in terms of exact identity and as such, this means that the pharmacist cannot autonomously decide to actively intervene with the choice made by the doctor at the time of prescription, substituting the biological originator with its biosimilar or vice versa. With this in mind, AIFA published its own Position Paper on biosimilars in May 2013 (updated in June 2016) and decided not to include biosimilar medicines in the transparency lists that allow automatic substitution between equivalent products. This decision was made with the aim of excluding biological medicines from a mechanism which, for chemically-synthesized products, limits the reimbursability to the lowest-price product on the market that contains a particular active substance, based on the assumption of complete interchangeability which has been derived from equivalence assessment made on a statistically significant population of patients.

As a result, according to AIFA, the biological originator and the biosimilar are different and alternative therapeutic options, between which the doctor can choose according to each patient’s need, his/her clinical presentation and the benefit-risk balance determined on a case-by-case basis.

The need to protect the patient, naïve or already treated, from the potential risk of modifying an ongoing therapy, by substituting a medicine with another whose effects have not been assessed on the patient, outweighs the price and competition logic entrusted to the pharmacist’s management. The guarantor of this is the physician, the person who better knows the patient’s clinical picture.

A similar outlook also emerges from Article 1, Paragraph 4 of Law No. 648/1996, in which the legislator aims to protect the patient’s health by allowing him/her to access unauthorized medicines without any direct payment if there are no authorized therapeutic alternatives⁵¹. The financial burden lies with the National Healthcare Service if the medicine used off-label is included in a special list, as drawn up and periodically updated to this end by the Single Medicine Committee (Commissione Unica del Farmaco, CUF). Law No. 648/1996 therefore provides National Healthcare Service funding of unauthorized pharmacological treatment, however there is constant uncertainty related to the characteristics of medicines which have not yet concluded the clinical trial process. In this latter case, AIFA has considered it inappropriate to expose the patient to a situation of uncertainty surrounding a biosimilar that has no clinical data available. In the 2013 and 2016 Position Papers, biosimilars were not automatically included in the 648 list, even if their reference biological originator is present. Here, the inclusion may occur only as a result of a case-by-case assessment.

On the basis of the considerations summarized here, the 2017 Budget Law confirmed the exclusive role of the physician in the prescription drug choice, which must be exercised by specifically indicating the biological medicine’s brand name and by including a detailed record of possible adverse effects (Directives 2010/84/EU and 2012/52/EU). The hospital pharmacist is not able to interfere in any way with this choice by substituting the prescribed biological medicine with another. As noted previously, the principle of non-substitutability relates to scientific assessments, which need to be interpreted and correctly applied under competition rules, by carefully evaluating if prohibiting the substitution implies that originators and biosimilars are not interchangeable and, therefore, should be placed within distinct relevant markets.

The physician’s freedom of prescription
Since substitution has been prohibited, the role of the treating physician becomes of fundamental importance, as set forth in the 2017 Budget Law, specifically in the part pertaining to tender procedures (Article 1, Paragraph 407b)⁵². The structure of public tenders, by means of framework agreements, must ensure that the doctor has ‘a wide availability of therapies’, so as to allow him/her to choose the most appropriate medicine for each case, among the first three in the ranking list. This does not affect the physician’s freedom to prescribe medicines that will ensure therapeutic continuity for the patients already under treatment, provided that the medicines are among those which participated in the tender procedure.

In AIFA’s 2013 and 2016 Position Papers, it was already stressed that the choice to treat a patient with a reference biological medicine or with its biosimilar constitutes a clinical decision and, therefore, must be entrusted to the prescribing physician only, with no external interference. The well-established principle whereby the practising health professionals are accountable for the medical treatment administered to each patient, is thus also reaffirmed at the regulatory level⁵³.

In the light of these assumptions, one of the guiding principles that steers medical practice⁵⁴ is now also recognized by a budget law. This is a sign of the legislator’s full awareness of the need not to subordinate health priorities to financial needs. The freedom to choose the treatment and the resulting accountability are the basis for the doctor’s professional activity. This is instrumental to the application of Article 32 of the Italian Constitution, which raises health to the level of citizen’s inviolable and absolute right, both in relation to private individuals⁵⁵ and with the public administration. It is important to note that the 2016 provision is, in some respects, complementary to Article 5 of Law No 24/2017 (Provisions on the safety of care and of the patient, as well as on professional accountability of health professionals), which states that, in the performance of their professional service, health professionals shall adhere to the recommendations laid down in the guidelines, ‘without prejudice to the particularities of the case at issue’, this emphasizes the importance of the personalization of the cure on the basis of individual needs⁵⁶.

The case law already established this principle as is outlined by the opinion of the Piemonte Regional Administrative Court⁵⁷. This underlines that public tenders, in which medicines based on the same active substance are put in the same lot, inherently tend to award the supply of that active substance to a single pharmaceutical company. For this reason, in the abstract, these tenders may compromise the right to health care for those patients who cannot benefit from the specific product supplied by the winner of the tender. That is why it is necessary that the tender competition’s lex specialis allows the contracting authority to procure different medicines for those patients for whom the treating physician makes an express request. Under these conditions, the tender guarantees effective competition among pharmaceutical companies on one hand and, on the other hand, it allows the supply of additional medicines without compromising the patients’ right to health, ensuring them the so-called ‘continuity of treatment’ or otherwise the possibility of accessing the medicines most suitable to them. The Consiglio di Stato also made a statement on similar matters, establishing the legitimacy of competitive tenders offering only medicines containing a certain active substance, but also providing the possibility for the contracting authority to source extra-tender medicines, in order to preserve the doctor’s freedom of prescription and to protect patients with special needs⁵⁸.

It is undoubtedly necessary for the doctor to carefully evaluate the biosimilar option and the economic benefit it might lead to, but this cannot be an obstacle or a restriction to the physician’s freedom of prescription⁵⁹. In fact, when a residual margin of uncertainty and a possible therapeutic risk are present, the role of the clinician must be central in identifying the cure and choosing between biological originator and its biosimilar. No economic assessment can constitute a constraint likely to affect the clinicians’ evaluation and their related professional accountability⁶⁰.

Public tenders and framework agreements
Biological medicinal products and biosimilars, being used mainly in hospitals, are purchased via a public tender, whereby there is competition among the companies concerned. In this context, it is important that the health authorities launching the public procurement procedures for biological medicines are aware of the peculiarities of these medicinal products, in order to consistently lay down the terms of the invitation to tender that comply to the ‘lowest bid’ scheme and ensure fairness, free competition, proportionality, non-discrimination and transparency (Decree-Law No. 50/2016).

The general purpose of stimulating competition in the pharmaceutical market must be reconciled with the need to ensure that doctors have the freedom to prescribe the medicines deemed most appropriate for the conditions under treatment, and to protect public health.

Tendering procedures for the procurement of medicinal products have traditionally been structured so that every medicine based on the same active substance (or even having the same formulation) are grouped in the same lot, which will be separately and independently awarded (the so-called ‘Simple Lots’). By way of derogation from this procedure, in the recent past, the contracting authorities decided to group medicines with more than one active substance in the same lot (the so-called ‘Composite Lots’), using the tender to select only one medicine for each condition. This had the effect of reducing the number of purchased medicines and also of limiting the prescriptive choice of physicians, who find themselves with only one medicinal product for each therapeutic indication, subject to exceptions to be motivated. This, cost minimizing approach, affects the prescriptive choice of the physician, who, as a result, may be induced to prescribe a medicine that is not deemed appropriate for the individual patient’s treatment. However, it should be pointed out that this grouping of different active substances was put in place by the contracting authorities on the basis of an equivalence assessment implemented at a local level, a view usually shared by the clinicians involved. This was before Article 15, Paragraph 11b of Decree-Law 95/2012, converted into Law 135/2012, attributed the exclusive competence on this matter to AIFA. It should be noted that the tendering procedures in question were mostly aimed at procuring chemically-synthesized medicines⁶¹ which are mainly used outside hospitals, and only anticipated the prescription by physicians, without giving priority for companies in terms of expected profit. The situation is different for biological medicines used in hospitals and as a result, the relationship between biological originators and the corresponding biosimilars led to a major legal dispute on the structuring of tender lots. This was initially directed by the Consiglio di Stato’s advisory opinion⁶².

As already mentioned, in Resolution No. 204/2014, AIFA ruled that, in light of the comparability exercise already carried out by EMA, an equivalence assessment by the national regulatory agency is necessary for biological originators and their biosimilars and, therefore, they endorsed the possibility that they can be grouped in the same tender lot, thus increasing the degree of potential competition. Despite this, the considerations in relation to the peculiarities of biological medicines remain valid. They may have an impact on the tender’s structure and on competition between companies.

In light of the above, it is essential that the contracting authorities duly consider the need to safeguard the therapeutic continuity for patients already under treatment with an originator medicinal product, if the treating physician deems the switch to biosimilars inappropriate. Similarly, until the biosimilar has been assessed by AIFA’s Technical and Scientific Commission (Commissione Tecnico Scientifica, CTS) and is deemed eligible for reimbursement for any unauthorized indications, according to Law No. 648/1996, the structuring of the tender’s lots shall provide for the exclusive use of the originator medicine for certain therapeutic needs. The exclusivity must be preserved if certain uses of the originator are still covered by secondary patents.

In other words, the structuring of public procurement procedures for originators and biosimilars is the crucial point of several considerations, based on the specific features of these products and on their exclusive rights. They reflect the importance of the prescriptive choice of the physician, based on the assumption that there is no automatic substitutability for biological medicines, and on the healthcare practitioner’s exclusive ability to decide the right therapy for each clinical case.

The contracting authority is, therefore, required to achieve maximum competition in public tenders and, at the same time, to ensure compliance with the above-mentioned priorities. In this perspective, the civil servants are required to provide at least two lots for each patent-expired biological medicine (formulation and route of administration being equal): one intended for naïve patients, the other for any other administration reserved for the originator.

It follows that competition can be fully expressed in the first tender lot, in the context of which the contract can be awarded both to the originator and the biosimilar manufacturing company. It is therefore necessary that the contracting authority defines the quantities assigned to each lot on an objective, rational and scientific basis, in order to avoid choices that might result in discriminations against any of the participants.

It is common knowledge for the public and private stakeholder, that reconciling interests and objectives that are not always complementary is very difficult. To this end, the 2017 Budget Law provided the industry players with guidelines, to be followed under certain shared principles. In particular, Article 1, Paragraph 407 of 2017 Budget Law removes any doubt as to the criteria for the structuring of tenders for the procurement of biological and biosimilar medicines. It outlines that, in public procurement procedures, different active principles cannot be grouped in the same lot, even if they have the same therapeutic indications. With this provision, the legislator forbids equivalent tenders for different active principles, which has caused an issue that has already been very problematic for AIFA. It is also stipulated that the procurement procedures must be carried out by means of framework agreements (referred to in Article 54 of the Decree-Law No. 50 of 18 April 2016) with all economic factors if more than three medicines based on the same active substance are present on the market⁶³. For this reason, the regional purchasing institutions should structure a single lot, for which they must consider:

• the specific active substance (Fifth Level of the Anatomical Therapeutic Chemical Classification System (ATC) used by WHO. The ATC is an alpha-numerical classification system dividing the medicines according to five hierarchical levels, in which the fifth level stands for the chemical subgroup specific for each chemical substance
• the route of administration
• the dosage.

The criteria for the inclusion in the lot are very strict because the legislator needs to ensure uniformity in the biological medicines to be purchased via the procurement procedure. In order to avoid therapeutic inaccuracy and to ensure competition among basically equivalent products, there must be no significant differences amongst them, their routes of administration or dosage.

However, the framework agreement constitutes a general and procedural tool that public administrators can use to consolidate purchases of repetitive and homogeneous goods and services. This avoids the continuous use of competitive tenders thanks also to the possibility of subscription with one or more economic operators.

Regarding patent-expired biological medicines, the legislator’s choice is justified by the advantages that the framework agreement offers. Firstly, the framework agreement is a flexible contractual tool, which allows the doctor’s freedom of prescription to be safeguarded, giving him/her the chance to have access to several medicinal products based on the same active substance. Originators and biosimilars may, therefore, be chosen on the basis of the patient’s clinical needs.

The aforementioned freedom of prescription shall hence be carried out to the best of the clinician’s knowledge and belief, without being subject to any improper obligations that may alter the reasons for their choice. This is in consideration of the fact that the same legislator already recognized and endorsed (even if only implicitly) the scientific reasons underlying a responsible choice. Secondly, in principle, the framework agreement allows the contracting authority to obtain price reductions by acquiring larger quantities of goods, as well as ensuring the plurality of competing operators, mitigating the risk of dependence on a single exclusive supplier.

Irrespective of the obligation to adopt the framework agreement when there are more than a total of three originator and biosimilar medicines on the market, the Italian Public Procurement Code (Codice dei contratti pubblici ) also gives the contracting authority the discretion to resort to it even if fewer competitors are present⁶⁴. In this case, even if alternative tendering procedures are undertaken, the obligation to structure the lots according to the criteria that safeguards the therapeutic continuity described above, remains in force.

The 2017 Budget Law also requires that the procuring entities launch the tendering procedure within 60 days after the marketing of the first biosimilar; and reiterate the tender within the same period every time a new biosimilar is marketed. It is therefore clear that the legislator wants to encourage the development of the market through the reiteration of the tendering procedures, avoiding the stagnation that may result from passive contracting authorities. Thus, the tender becomes the preferred tool to determine the purchasing conditions. All the specifications that impose an automatic adjustment of the originator’s price when an authorization for a biosimilar is issued, must therefore be considered outdated. Moreover, pending a new procedure, this adjustment makes rebates on the originator’s price inevitable, thus threatening to limit the effectiveness of the competition. In relation to this, it should also be noted that not all the reservations expressed by AGCM on the draft law, already examined in Paragraph 4, were accepted in the final text. Among the recommendations of the Antitrust Authority that have been transposed into the final text, it is worth mentioning the one concerning the elimination of the proposed rule according to which the maximum sale price to the National Healthcare Service would have been a starting auction price for patent-expired biological active substances. In light of such elimination, the procuring entities have a substantial freedom in determining the auction price.

With regards to the award criteria and the price, Article 1, Paragraph 407 of Law No. 242/2016 states that patients should be treated with one of the first three drugs in the ranking list of the framework agreement⁶⁵, classified according to the lowest price or the lowest bid criterion, in order to ensure an effective rationalization of expenditure and an appropriate availability of therapies. Here, it should be remembered that Article 95, Paragraph 2 of the Public Procurement Code provides that, in accordance with the principles of transparency, non-discrimination and equal treatment, the contracting authorities shall award contracts according to the lowest bid criterion, identified on the basis of the price-quality ratio or comparing costs and efficacy. Without entering into the details of the subject, it is worth mentioning that the contracting entities wishing to award the contract using the lowest price criterion, pursuant to Article 95, Paragraph 5⁶⁶, must give adequate reasons for the choice made and clarify the criterion they used in the call for tender. In the new Public Procurement Code, there is a strong preference for the awarding of contracts in accordance with the lowest bid criterion, thereby reducing the importance of the lowest price criterion. However, a goal that needs to be carefully evaluated is how to combine all this in the health sector and, specifically, with the procurement procedures for medicinal products.

Indeed, on the one hand, the guidelines of the Italian National Anti-Corruption Authority (Autorità Nazionale Anticorruzione, ANAC) tend to consider medicines as standardized goods, to be purchased only according to price. On the other hand, however, in the case of biological medicines, it is better to explore all possible scenarios of awarding the supply contract according to the lowest bid criterion, giving value not only to the quality of the product itself, but also to the additional, innovative capabilities of the medicine or to the treatment of the related condition. It is significant, in this context, that the Public Procurement Code also pays attention to the potential and added value of the tendering company, and not only to the proposed product, thus disclosing the possibility for a more articulated evaluation, also regarding further aspects other than the price and characteristics of the product.

It is clear that, during the structuring of a public procurement procedure, the interaction between contracting agencies and economic operators plays a key role, because it allows the acquisition of information, consultancy and technical reports, that the agency can use to better design the tender specifications. Accordingly, the tender specifications can already include the innovative services and qualitative aspects that the competing companies may offer for better treatment, thus going beyond the mere lowest price criterion. In this regard, it is not by chance that Article 66 of the Public Procurement Code outlines that the contracting entity may enter discussion with the economic operators in order to better understand their products and their specific characteristics⁶⁷. It is therefore necessary that the tender technicians and the Tender Manager (‘Responsabile Unico del Procedimento, RUP’) work to ensure that the procedure, even in the presence of a natural and inevitable ‘conditioning’, pursues the public interest in clarifying the technical specifications and requirements. It should not violate the equal treatment of all competitors and the impartiality and objectivity standards of the procedure and thus, consequently it should not distort the correct dynamics of the market.

The same degree of attention used in correctly defining the lowest bid criterion must be demonstrated by the central contracting entity when assessing the quality/price ratio. This should prevent any arbitrary and unfair actions by the agency that may result in competitive distortions for the benefit of a single company.

The Public Procurement Code links the price to the cost, which has to be assessed with regards to the entire life cycle of the product. In this respect, considerations of the Health Technology Assessment and conditional reimbursement agreements into which the company may have entered with AIFA for the purpose of an A (medicines reimbursed by the National Health Service) or H (medicines used in hospitals) classification⁶⁸ can become of relevance. Here, the National Health Service may pay a lower price than the one initially paid if a company has an obligation to give money back to the institution following a therapeutic failure.

Furthermore, in granting discounts, the originator manufacturer must take into account that, upon expiry of the patent, it will likely be in possession of a significant market share for specific therapeutic indications. The manufacturer should therefore assess its possible dominant position to determine if any discounts may be granted in the procurement procedure.

In this respect, the presence of patents or other intellectual property rights generally constitutes a barrier to access for potential competitors to a single relevant market. This is particularly relevant to the pharmaceutical industry, as is stated by the Organisation for Economic Co-operation and Development (OECD): ‘intellectual property rights, in the form of patents and trademarks are relatively more important in the pharmaceutical industry than in other sectors’⁶⁹. On the other hand, the fact that an undertaking has a technological advantage over its competitors can be considered as a factor demonstrating its potential dominant position.

However, the Court of Justice has stated on several occasions that intellectual property rights do not automatically attribute a dominant position to those who hold them, given that, in principle, it is necessary to take into account the possible existence of producers of similar goods and their position on the market. In this case, any assessment of substitutability of different medicinal products is of great complexity due to the difficulty associated with uniquely correlating the therapy with the type of patient. In addition, the cost to the National Healthcare Service⁷⁰ is also of relevance.

As a general rule, extremely high market shares are proof of the existence of that condition for the undertaking, unless there are exceptional circumstances⁷¹. However, it should be stressed that, in the case of biological medicines, the identification of the relevant market is not a trivial exercise. Here, the administration of the same drug may occur in particularly delimited segments of patients, not only due to their specific conditions, but also due to patient response which can be modified by a number of unforeseen variables, such as individual genetic drug mutations. In this regard, researchers and clinical practitioners move more and more towards so-called ‘precision medicine’, whereby the pharmacological treatment should be personalized for the individual patient. This suggests a reflection upon the compatibility of this evolution to the traditional concept of market, which does not address even the combination of two or more different medicines⁷².

In addition to the market share, it is necessary to consider all the eligible factors to ensure significant competitive advantages to the company which is believed to hold a dominant position even once the patent of the active substance has expired. Among these are: the availability of know-how and the intellectual property rights; any secondary patents of formulation, indication or combination; the economic and financial capabilities of the company; the time advantage acquired on competitors; the ownership of privileged information assets; a consolidated reputation with consumers; the size of its product list; and the cost advantage of importers.

On the other hand, it is useful to recall that the EU case law clarified that even if an undertaking no longer enjoys a dominant position at the time when abusive behaviour (for the purposes of the prohibition of abuse of dominant position) produces its effects, this does not alter the legal classification to be attached to its acts, where those acts were committed at a time when the company was in a dominant position, and therefore it had a ‘special responsibility’ not to allow its behaviour to impair genuine undistorted competition within the market⁷³. This clarifies that the prohibition of abuse of dominant position applies also to the conducts of the originator manufacturing company having effects on the market after the expiry of the patent, provided that such conducts had been put in place prior to expiration.

As far as public procurements are concerned, it should be noted that, according to the case law, it is not forbidden for the company in a dominant position to propose discounts in order to be awarded with the supply contract⁷⁴. This favours the reduction of prices for the benefit of the National Healthcare Service and the patients. It would be paradoxical if the originator manufacturer was unreasonably prohibited from applying for rebates. This can benefit biosimilars manufacturing companies and stagnate the market before it was even able to express the potential of price reductions.

There is no doubt, however, that discount policies applied in the context of public procurement procedures by an originator manufacturing company close to the expiry of the patent, or in the phase immediately following that deadline, must be assessed with particular care, on the basis of antitrust law, since they may discourage or delay the entry of newcomers into the market and thus unlawfully restrict competition. It is therefore necessary to assess whether the price reductions of the originator in the procurement procedure are likely to determine an ‘anticompetitive foreclosure’. For example, when a large part of the market is foreclosed, the dominant firm’s competitors are likely to suffer from scale disadvantages, which could make them a weaker competitive force or drive them out of the market completely⁷⁵.

Taking these principles into account, we can conclude that the regulatory and normative framework relating to biological medicines with expired patents, means that it is very unlikely that there will be an abuse of the dominant position by the originator manufacturing through discounts in the tender.

It should be remembered that, as stated in Paragraph 1, the access of a biosimilar to reimbursement is subject to the granting of a price at least 20% lower than the originators. Furthermore, the biosimilar manufacturing company usually applies further discounts in each tender. In this way, the biosimilar defines pricing thresholds, which the originator company may not be able to reach or actually break by applying the pricing policies often used by multinational groups. Even if this happens, it only constitutes ‘predatory pricing’ if the dominant company sells its products below cost. This must be assessed according to the criteria indicated by the European Commission, and on the basis of the medicine business in its entirety, and not on the intra-group cost and on the single transaction⁷⁶. Here, it is clear that the sale price charged by the parent company to the local subsidiary also includes a profit margin and, therefore, it cannot be equal to the actual production cost. Moreover, in a market characterized by a number of purchasing bodies and procurement procedures, the originator manufacturer can only create a barrier to access for biosimilars by systematically adopting policies of predatory pricing, which they should maintain throughout the entire term of the supply contract until the award of a new tender, thus making it almost impossible (in the short term) to recover losses generated by selling below cost.

In any case, it should be remembered that the same principle of freedom of prescription and the consequent contractual structure of the framework agreement, favours access to the market to a number of competitors, minimizing the possibility of exclusive agreements capable of restricting competition to privilege a single company⁷⁷.

Scientific information and advertising of originators and biosimilars

In light of the abovementioned arguments, it is clear that the manufacturing companies have the responsibility to ensure that healthcare professionals have a very precise knowledge of their clinical studies. This allows them to choose, with full knowledge of the risk-benefit balance, whether to prescribe the biological originator or the corresponding biosimilar, and also to push the central purchasing agencies for full availability of the medicines necessary for their therapeutic needs. It is paramount, therefore, that the companies also compete in terms of scientific information pursuant to Legislative Decree No. 219/2006 that requires the differentiating and diversifying of their medicinal products using comprehensive and persuasive scientific data.

The competitive component of product price and the quality and amount of clinical data are of great importance and should be made available to healthcare professionals with proper and exhaustive advertising. These aspects may determine a primary competitive value of the product as they can influence the doctors’ prescriptive choice in the most appropriate way for the clinical needs of their patients. The AGCM acknowledged that one of the primary variables of determining the medicines’ demand is the information provided by pharmaceutical sales representatives to health practitioners⁷⁸. As an important aspect of competition leverage for companies, information should be provided throughout the whole medicine’s life cycle, especially in the patent’s post-expiration phase, when the originators start to compete with their biosimilars under the supervision of AIFA, who is the ultimate guarantor of fairness, scientific accuracy and objectivity of the information provided.

Despite some doubts raised in the doctrine⁷⁹, the legislation agrees that the doctor’s freedom of choice cannot be fully implemented without the scientific data disseminated by pharmaceutical companies, which is entrusted to the legislator who has the task to inform health care professionals in a balanced, accurate and comprehensive way. This is the only way for a physician to prescribe the medication that is most appropriate for the patient’s clinical outlook which also minimizes any risk of adverse reactions. The therapeutic option should not be affected or conditioned by a procurement procedure that can limit the availability of products and therefore require the doctors to justify themselves each time their decision is directed towards a medicine outside the award of the tender.

In light of this, we should ask ourselves, how can advertising and scientific information be legitimately provided by originator manufacturing companies without damaging the interests of biosimilar companies? The originator companies might have obligations and responsibilities resulting from a dominant position within specific market segments achieved before the patent expiry⁸⁰. In this regard, it is licit that companies compare their clinical data with their competitors’ using comparative advertising⁸¹ which cannot be misleading⁸². This should be done in accordance with certain procedural and organizational requirements, which not only allow the company to attune the content of their scientific information to their recipients (doctors, pharmacists or RUPs), but also allows for the subdivision of activities between the sales department, the medical department or the market access department, depending on the issues dealt with. This minimizes the compliance risk. Organizational measures aside, the content of the advertising must be correct, objective and balanced, so that the competition may be implemented based on merits, without any ambiguity.

The originator manufacturing company may focus its communication on the specifics of its own originator product, on the consolidated clinical experience, e.g. on real-world evidence data, and also comment on head-to-head studies between biosimilars and originators using truthful scientific references, types of therapeutic treatment, patient settings, and the number of treated patients. The originator manufacturing company is also allowed to report to prescribers or purchasers the existence of still patented exclusive indications not included in the biosimilar’s skinny label. They are also able to highlight the absence of an indication that a biosimilar is applicable to, in combination with another biological medicine whose clinical studies have only been conducted with the originator product, the data for which are still covered by Regulatory Data Protection (RDP – Paragraph 1). Each of these issues is the result of a real competition on the merits, insofar as the clinical data, the therapeutic indication or the patent are the result of a thorough process of research and development that may have an impact also in the structuring of the procurement procedures, and it is not a mere attempt to exploit a ‘parasitic’ income. Furthermore, the originator manufacturing company may clarify legal aspects that also concern the doctor’s liability, mentioning the prohibition of automatic substitutability and the principle of therapeutic continuity, promoting the doctor’s freedom of prescription and ensuring that the contracting agencies respect these principles in structuring the procurement procedures and in setting the percentages allocated to the successful tenderers of the framework agreement. It is also licit to objectively report the specificities of the approval process of biological medicines and the simplifications applicable to biosimilar medications (e.g. similarity exercise, extrapolation of indications), as well as to cite the importance of the brand name in the prescription and the necessity of the correct reporting of adverse reactions. Finally, in the context of a fiduciary relationship with the health professionals, the originator manufacturing companies may deal with matters, such as the doctor’s obligation to give the patient transparent information in the case of administration of biosimilar medicines, recalling, if necessary, the Position Papers of AIFA, EMA, or any other scientific society.

In the case of unlawful conduct by central purchasing agencies or by health facilities, companies have the right to dispute in court, any regional resolution or procurement specifications that contain unfair provisions, such as the obligation to use an arbitrary percentage of biosimilar medicines (at the expense of therapeutic continuity or exclusive rights), or rewards for Director-Generals supporting the interests of biosimilar manufacturing undertakings. This does not constitute a sham litigation that may result in an abuse of a dominant position, as referred to in Article 102 of the Treaty on the Functioning of the European Union (TFEU), as the legal proceedings in question aim to balance procurement procedures that are biased in favour of some competitors and, therefore, do not follow the legal framework as defined by the 2017 Budget Law⁸³.

In contrast, emphasizing the inevitable elements of uncertainty of the medicinal products when they are marketed for the first time, stating possible reservations about their approval procedure, or above all, using expressions that may make the biosimilar’s extrapolated indications appear, in themselves, as a risk for the patient’s health, are damaging to the image of the competitors and that of the regulatory authorities’ choice. Making false correlations between a small number of patients treated with the biosimilar and its higher hazard ratio, or stating that the absence of an indication for the biosimilar is indicative of an inferior quality, is also defamatory conduct towards competitors.

In summary, therefore, it is necessary to identify a correct balance between the right to stress the real, substantial differences between originators and biosimilars and the need to avoid spurious or misleading information that may constitute a denigration of competitors or even the abuse of a dominant position.

At a strictly interpretative level, the French cases of Plavix and Subutex, tried by the Autorité de la concurrence in May and December 2013, are particularly interesting. The cases concern the advertising activities carried out by originator manufacturing companies for their own medicines, which included comparative advertising with their biosimilar counterparts. These provisions (both confirmed on appeal) clarify that, if the information provided is accurate, complete, precise and valid for the benefit of their own product, and also in comparison with the competitor’s, comparison is legitimate and may not be considered detrimental. On the other hand, if the data used in the advertising are ambiguous, partial and/or unverified, this constitutes defamatory conduct and a case of abuse of dominant position, pursuant to Article 102 of the TFEU⁸⁴.

The fairness of advertising is to be assessed with the target audience in mind. In this regard, the Judgment of the Court of Cassation, First Division, No. 12960 of 22 June 2016, is particularly significant. It states that the potential conditioning of the information conveyed, due to advertising activities, shall be ascertained on the basis of the competence of the target audience, and that the significance of the inaccuracies, if any, must be assessed in relation to the degree of competence of the recipients⁸⁵.

Conclusion

This paper demonstrates that the regulatory authorization granted to new biological originators and biosimilars, guarantees a legal presumption as to their safety and efficacy that must be integrated by further predictive data, that is also related to any extrapolated indications and if possible, to rare adverse reactions. A similar element of caution is required, a fortiori, when dealing with ‘complex’ biosimilars, intended for treating serious conditions, such as cancer, in subgroups of patients who already demonstrate a high probability of complete remission. In this context, it seems arbitrary to establish the total comparability between biological originators and the corresponding biosimilars before the monitoring and pharmacovigilance tools introduced by community legislation to assess the real-world evidence are put in place.

With respect to this, the position of the Italian legislator outlined in the 2017 Budget Law seems acceptable. Here, the freedom of prescription of the physician is safeguarded and the decision surrounding potential switches between originator and biosimilar is exclusively entrusted to them. This excludes the possibility of automatic substitutability by the pharmacist. In this respect, the identification of the framework agreement as a form of compulsory contract in the presence of more biosimilars appears appropriate to reconcile different objectives, such as the protection of the physician and the patient, the sustainability of the national healthcare system and the competition.

In relation to competition, it is essential that, in a sector so scientifically complex, for the one-dimensional view of competition among companies/products that is tied to the economics, to be overcome, in order to make the scientific fact another discriminating factor for the conscious choice of the medicine by the doctor, and also a competitive lever, even within a system of purchases focused on public procurement procedures.

The regulatory system aims to guarantee the doctor’s right/duty to choose between the originator biological medicine and the biosimilar for each patient, regardless of whether or not they are already being treated with a medicine, and without the tender being a conditioning factor in determining the right therapeutic option. In other words, it is the physician’s freedom of prescription that must direct the procurement procedures, and not vice versa.

This conclusion takes into account the recommendations expressed by EMA and AIFA, to which antitrust authorities must also abide, at least with respect to the scientific considerations⁸⁶.

By the way, the AGCM’s advocacy measures and the view expressed in the opinion dated 17 November 2016, do not deviate from AIFA’s position, and confirm the relevance of the doctor’s freedom of prescription and of the principle of therapeutic continuity. However, both can and must be reconciled with the national healthcare system’s saving targets, in so far as each prescription should be jointly inspired by the interests of patients and care for constraints of the Public Funding, being the doctor accountable for setting the appropriate balance.

Disclaimer

Fausto Massimino declared that the content of this paper is personal view and does not necessarily reflect the opinion of Roche SpA.

Competing interests: Dr Enrico Adriano Raffaelli is a partner of Rucellai & Raffaelli, which as law firm provides consultancy to pharmaceutical companies.

The authors declare that there is no funding received to prepare this manuscript.

Provenance and peer review: Commissioned; externally peer reviewed.

Authors

Enrico Adriano Raffaelli, LLB, JD
President of the Commission for Competition Law of UAE (European Lawyers Union)
Rucellai & Raffaelli
18 Via Monte Napoleone, IT-20121 Milano, Italy
Fausto Massimino, LLB, JD
Roche SpA
110 Viale GB Stucchi, IT-20900 Monza, Italy

Supplementary notes

¹European Medicines Agency. EMA/837505/2011 [homepage on the Internet]. [cited 2019 Jan 19]. Available from: www.ema.europa.eu
²European Medicines Agency. Biosimilars in the EU. Information guide for healthcare professionals [homepage on the Internet]. [cited 2019 Jan 19]. Available from: http://www.ema.europa.eu/docs/en_GB/document_library/Leaflet/2017/05/WC500226648.pdf
³The same approach was taken by the Second AIFA position paper on biosimilars. Agenzia Italiana del Farmaco [homepage on the Internet]. [cited 2019 Jan 19]. Available from: http://www.AIFA.gov.it/sites/default/files/pp_biosimilari_27.03.2018.pdf
⁴In this regard, it can be interesting noting that, while the atoms that constitute a classic medicine of chemical origin like Aspirin are 21, those present in monoclonal antibodies of biological origin are about 25,000. See, in that respect, IMS Health. Biosimilar accessible market: size and biosimilar penetration. April 2012.
⁵See Società Italiana di Farmacologia [Italian Society of Pharmacology]. Biosimilar mAbs – basic concepts [homepage on the Internet]. [cited 2019 Jan 19]. Available from: http://www.sifweb.org/docs/sif_position_slide_mab_biosimilari_lug13.pdf
⁶In this regard, see Biosimilars in the EU, cit.. According to the EMA guidelines, entered into force on April 30, 2015, a biological medicine authorised outside the European Economic Area (EEA) can also be used as comparator, so as to facilitate the development and avoid the repetition of clinical trials.
⁷See EMA Document of 22 June, 2007, containing Q&A on biosimilar medicines. European Medicines Agency [homepage on the Internet]. [cited 2019 Jan 19]. Available from: www.emea.europa.eu
⁸See Biosimilars in the EU op. cit.
⁹Marata AM, Magnano L. I biosimilari tra presente e futuro [Present and future of biosimilars], report held during the 2010 OsMed Report presentation (Analisi della prescizione farmaceutica in Italia [Analysis of pharmaceutical prescription in Italy], Rome, 7 July, 2011). [Italian].
¹⁰See, amongst others, Greb E. What’s more important, the process or the product? PharmTech.com. 2011 Jan 19. [homepage on the Internet]. [cited 2019 Jan 19]. Available from: www.pharmtech.com
¹¹The comparability exercise ‘is conceived as a step-wise process that is tailor-made for each product; knowledge from the initial quality comparability studies (step 1) is used to determine the extent and type of non-clinical (step 2) and clinical studies (step 3) required in the next step of development, always with the aim of ruling out differences in clinical performance between the biosimilar and the reference medicine¹¹. […] For larger molecules, e.g. monoclonal antibodies, even when robust quality and in vitro comparability data are provided, a comparative study in patients using a conventional clinical efficacy endpoint is usually required […] and adequate equivalence margins should be chosen. […] In the case of monoclonal antibodies, [clinical immunogenicity studies] are always required, as it is more difficult to predict the incidence of unwanted immunogenicity, the characteristics of the immune response or the clinical consequences’11, In this regard, see Biosimilars in the EU op. cit.
¹²See Biosimilars in the EU op. cit. In any case, it is worth noting that the principle of extrapolation is not applicable to reimbursable therapeutic indications pursuant to Law No. 648/1996, i.e. those with no therapeutic alternative authorised under the applicable regulations. These are, in fact, indications other than those approved for the originator via centralised procedure. Therefore, they require – as it will be better clarified below – a further evaluation by the AIFA’s Commissione Tecnico Scientifica [Scientific Technical Committee], based on the analysis of Real World Evidence data and an experience of actual use of the biosimilar medicine.
Similarly, extrapolation is not applicable when an originator biological medicine is used in combination with another, if the therapeutic indication has been released for the latter and is therefore present only in this product’s SmPC. In other words, since only the different biological medicine has been authorised for the indication in combination with another medicine, a possible use of the biosimilar in that manner would constitute an off-label use. And in fact, pursuant to article 14 (1) of Regulation 726/2004/EC, the data on which the authorisation of the medicine or its indication are based are covered by the Regulatory Data Protection (RDP), an intellectual property right ensuring, for a limited duration of time, the protection of an innovator’s proprietary clinical data. During the RDP period of validity, generics or biosimilars cannot rely on the innovator’s proprietary data in order to obtain marketing authorizations.
¹³If, however, the biological medicine does not have the characteristics indicated in Art. 3 and Annex to Regulation (EC) No. 726/2004, it may be approved also by national regulatory authorities, by means of national mutual recognition or decentralized procedure. For example, low-molecular-weight heparins fall within this category.
¹⁴This may be subject to exceptions. In fact, pursuant to Art. 21a (f) of Directive 2001/83/EC and Art. 9, Par. 4 (cc) of Regulation 726/2004/EC, it may sometimes be necessary to complement the efficacy data available at the time of the marketing authorisation with additional information confirming the initial view of the regulatory agencies, to address any concerns impossible to resolve prior to the granting of the marketing authorisation. To this end, the Commission Delegated Regulation (EU) No. 357/2014 of 3 February 2014 was issued, providing the possibility that the same agencies having granted the marketing authorisation can subsequently ask the authorisation holders for additional efficacy studies, including on biosimilars, thereby reinforcing a principle already present in the Community legislation, under which – as it will be seen shortly – biosimilars already on the market can be subject to appropriate post-authorisation efficacy studies (PAES). For any additional information on this issue, see Massimino F. Medicinali biologici originators e biosimilari tra difesa della concorrenza e tutela dei pazienti [Originator biological medicines and biosimilars: competition safeguard and patient protection], in Raffaelli EA (eds.), Antitrust tra diritto nazionale e diritto dell’Unione Europea, XI Convegno [Antitrust: National law and European Union Law, 9th Conference] (Treviso, May 15-16, 2014), Milan/Brussels, 2015, 329 et seq. [Italian].
¹⁵See Biosimilars in the EU op. cit.
¹⁶Under the current legislation, in fact, manufacturers of biological originators and biosimilars are required to establish a system of pharmacovigilance to monitor the safety of their products and to set up a specific “Risk Management Plan” (EU-RMP), which establishes, inter alia, the measures to be taken to prevent or minimise any risk arising out of the use of their medicines. In this respect, see the Second AIFA concept paper, op. cit.
¹⁷Moreover, it should be remembered that the biosimilar manufacturing company may also decide not to request all the indications given to the originator. In this case, the marketing authorisation granted by the regulatory agency will be without the indication at issue (“skinny label”). The physician is therefore liable for checking in advance, at the time of the prescription, whether the biosimilar actually has the indication for its intended use. In this regard, see Biosimilars in the EU op. cit. A biosimilar may lack one or more indications if the indications in question are still patent protected, and the manufacturing company wants to prevent the risk of patent infringement.
¹⁸For a complete summary of the major amendments introduced by the European doctrine on pharmacovigilance, see Guerra G. Tutela del paziente e obbligo di black symbol per i farmaci innovativi. Gli effetti del regolamento UE n. 198/2013 [Patient protection and obligation for innovative medicines to include the black symbol]. The effects of Regulation (EU) No. 198/2013). Politiche Sanitarie. 2013;14(1):42:7. [Italian].
In addition, it may be useful to visit the site: Agenzia Italiana del Farmaco [homepage on the Internet]. [citied 2019 Jan 19]. Available from: http://www.agenziafarmaco.gov.it/it/content/la-nuova-legislazione-di-farmacovigilanza.
¹⁹Article 23 states that additional monitoring refers to ‘(a) medicinal products authorized in the Union that contain a new active substance which, on 1 January 2011, was not contained in any medicinal product authorised in the Union; (b) any biological medicinal product not covered by point (a) that was authorised after 1 January 2011’. Pursuant to that provision, the Commission Implementing Regulation (EU) No. 520/2012 of 19 June 2012 further clarified EMA obligation to make public a list of medicinal product subject to additional monitoring (Art. 14, Paragraph 8, Regulation (EU) No. 726/2004).
²⁰With regard to this last aspect, Art. 102 (e) of Directive 2010/84/EU imposed on Member States to ensure, through the collection of information and through the follow-up of suspected adverse reactions, that all appropriate measures are taken to identify clearly any biological medicine prescribed, dispensed or sold in their territory. All the foregoing ‘with due regard to the name of the medicinal product, in accordance with Article 1(20), and the batch number’.
²¹Sträter B. New pharmacovigilance rules in the EU and their impact on biosimilars and automatic substitution. Scrip Regulatory Affairs. 10 Nov 2011.
²²The document Biosimilars in the EU, op. cit., takes the same view, stating that ‘for identifying and tracing biological medicines in the EU, medicines have to be distinguished by the tradename and batch number and this is particularly important in cases where more than one medicine with the same INN exists on the market. This ensures that, in line with EU requirements for ADR reporting, the medicine can be correctly identified if any product-specific safety (or immunogenicity) concern arises’. In this regard, it is significant that the Summary of Product Characteristics (SmPC) of some biological medicines, as approved by the regulatory agencies, provides the obligation to identify the product in the patient’s card with its tradename. The need to ensure a correct identification of biological medicines also inspired Directive 2012/52/EU of 20 December 2012 on cross-border healthcare, which, in order to facilitate the recognition of medical prescriptions issued in another Member State and the correct identification of medicinal products under different brand names across the Union, accepts that ‘the brand name should only be used to ensure clear identification of biological medicinal products’, because of the ‘special characteristics of those products’ (see Whereas No. 4 of Directive 2012/52/EU), thus considering the brand name as a necessary element of differentiation between originators and biosimilars.
²³In the definition of INN, the World Health Organization states as follows: ‘International Nonproprietary Names (INN) facilitate the identification of pharmaceutical substances or active pharmaceutical ingredients. Each INN is a unique name that is globally recognized and is public property. A nonproprietary name is also known as a generic name’. World Health Organization. International Nonproprietary Names [homepage on the Internet]. [cited 2019 Jan 19]. Available from: http://www.who.int/medicines/services/inn/en
²⁴According to the WHO document Biological Qualifier, An INN Proposal: ‘The BQ is an additional and independent element used in conjunction with the INN to uniquely identify a biological substance to aid in the prescription and dispensing of medicines, pharmacovigilance and the global transfer of prescription. The BQ is a code formed of four random consonants in two 2-letter blocks separated by a 2 digit checksum’. World Health Organization. Biological Qualifier. An INN proposal [homepage on the Internet]. [cited 2019 Jan 19]. Available from: http://www.who.int/medicines/services/inn/WHO_INN_BQ_proposal_2015.pdf?ua = 1
²⁵Pani L, Montilla S, Pimpinella G, Bertini Malgarini R – Italian Medicines Agency. Biosimilars: the paradox of sharing the same pharmacological action without full chemical identity. Expert Opin Biol Ther. 2013;13(10)1343-6.
²⁶Guerra G. Tutela del paziente e obbligo di black symbol per i farmaci innovativi. Gli effetti del regolamento UE n. 198/2013 [Patient protection and obligation for innovative medicines to include the black symbol. The effects of Regulation (EU) No 198/2013]. Politiche Sanitarie. 2013;14(1):42-7. [Italian]. The informational role of the clinician to protect the patient is also defined by Articles 30, 31, 32, 33 of the Italian Code of Medical Ethics.
²⁷On the consideration regarding pharmacovigilance and the principle of therapeutic equivalence of biological medicines, see Cassamagnaghi S, Miani V. Gare per l’acquisto di farmaci tra tutela della salute e le esigenze di contenimento della spesa pubblica. Il caso dei biosimilari [Tendering procedures for buying-in of medicinal products: health protection and need for the containment of public spending. The case of biosimilars]. [Italian]. Diritto 24 of Il Sole 24 Ore [homepage on the Internet]. [cited 2019 Jan 19]. Available from: http://www.diritto24.ilsole24ore.com/avvocatoAffari/mercatiImpresa/2013/06/gare-per-lacquisto-di-farmaci-tra-la-tutela-della-salute-e-le-esigenze-di-contenimento-della-spesa-pubblica-il-caso-dei-biosimilari.html On the same issue, see Guerra G. Farmaci di origine biologica e biosimilari: quale livello di sicurezza per prodotti innovativi? (parte I) [Biological medicines and biosimilars: what level of safety for innovative products? – part 1]. [Italian]. Fondazione Giannino Bassetti [homepage on the Internet]. [cited 2019 Jan 19]. Available from: http://www.fondazionebassetti.org/it/focus/2013/03/ farmaci_quale_livello_di_sicur.html.pdf
²⁸On medical information about the available biological alternatives, see Guerra G. Farmaci di origine biologica e biosimilari: profili di responsabilità medica (parte II) [Biological medicines and biosimilars: medical liability issues – part 2]. [Italian]. Fondazione Giannino Bassetti [homepage on the Internet]. [cited 2019 Jan 19]. Available from: http://www.fondazionebassetti.org/it/focus/2013/04/farmaci_di_origine_biologica_e.html In this article, the author particularly assumes the possible content of the report given by the doctor to the patient in case of administration of biological medicines, taking account of their particular complexity (for example, the possible therapeutic alternatives, the molecular peculiarities of the medicine, the precautions about the medicine label imposed by European legislation). More in general, see Brignone C. Autodeterminazione e informazione, salute e consenso informato: tra strumenti normativi e prassi giurisprudenziali [Self-determination and information, health and informed consent: regulatory instruments and jurisprudence]. [Italian]. Diritto Penale Contemporaneo Bassetti [homepage on the Internet]. [cited 2019 Jan 19]. Available from: www.penalecontemporaneo.it. The patient’s active and preventive involvement is even more necessary if the doctor intends to modify the current therapy, switching from the originator to the biosimilar and vice versa, a process on which we will focus in the next paragraph. In this regard, see Biosimilars in the EU, op. cit.
²⁹See Court of Justice, 5 May 2011, Case C-316/09, MSD Sharp & Dohme, ECLI:EU:C:2011:275.
³⁰See Judgment of Court of Cassation, Third Civil Division, No. 8875 of 8 September 1998.
³¹See Judgment of Court of Cassation No. 4391/2012, Judgment of Court of Cassation, Fourth Criminal Division No. 8254/2011. For a wide examination on the issue of liability in the prescription of medicines, see Massimino F. La responsabilità nella prescrizione dei farmaci tra scienza, coscienza e condizionamenti normativi [Accountability in the prescription of medicines: science, conscience and regulatory conditioning]. Danno e Responsabilità. 2013;(1):5-21.
³²See the Second AIFA position paper on biosimilars.
³³As so in Biosimilars in the EU, op. cit.
³⁴See Massimino F. Medicinali biologici originators e biosimilari [Originator biological medicines and biosimilars], op. cit., p. 333. In particular, as to the differences between the therapeutic equivalence of biological medicine and chemically-synthesized medicines, see Molise Regional Administrative Court, Judgment No. 118/2013 of 15 February 2013; Guerra G. Farmaci di origine biologica e biosimilari: quale livello di sicurezza per prodotti innovativi? (parte I) [Biological medicines and biosimilars: what level of safety for innovative products? – part 1], op. cit.
³⁵In particular, this principle has been regulated by the Decree-Law No. 95/2012, converted into Law No. 135/2012, which has determined, at Art. 15, Par. 11b, that ‘in adopting decisions based on therapeutic equivalence among medicinal products containing different active substances, Regions shall adhere to the motivated and documented assessments made by the AIFA’.
³⁶For any additional information on the case law on therapeutic equivalence between originators and biosimilars, Massimino F. Medicinali biologici originators e biosimilari [Originator biological medicines and biosimilars], op. cit., p. 348.
³⁷See the Second AIFA position paper.
³⁸According to WHO’s definition, an interchangeable medical product is “one which is therapeutically equivalent to a comparator product and can be interchanged with the comparator in clinical practice” (ref. WHO Technical Report Series, No. 937, 2006). Interchangeability refers to the medical practice of substituting one medicine with another which is expected to produce the same clinical effect in a given clinical context and in any patient. The switching can be carried out at the initiative or with the agreement of the prescribing physician (Biosimilars Consensus Information Paper’s definition).
³⁹On this matter, see Scavone C, Rafaniello C, Berrino L, Rossi F, Capuano A. Strengths, weaknesses and future challenges of biosimilars’ development. An opinion on how to improve the knowledge and use of biosimilars in clinical practice, in Pharmacological Research, November 2017, whose abstract reads as follows: ‘The development of biosimilars follows a well-defined step-wise approach, the so-called comparability exercise, which aims to compare non-clinical (mainly quality features and biological activity) and clinical (efficacy and safety profiles) features of new biosimilars with their respective reference products. Despite the undeniable advantages of such procedure, there are still some concerns about it (such as the absence of switching studies or the evaluation of efficacy and safety in all therapeutic indications). In particular, the European regulatory framework on biosimilars approval does not include the conduction of switching studies demonstrating the interchangeability to be carried out before marketing authorization. This is one of the main aspects negatively affecting healthcare professionals’ clinical decisions on switching. In order to achieve a better knowledge on safety and efficacy of biosimilar drugs, real world data should be collected and post-marketing efficacy and safety clinical studies (including those evaluating specific endpoints, therapeutic regimens and patients’ population), should be planned’.
Moreover, with reference to epoetin alfa biosimilars, present on the market since 2008, in 2016 the Società Italiana di Farmacologia [Italian Society of Pharmacology] has detected the existence of Real World Evidence clinical data that fully confirms their safety and efficacy, even in case of switching. [cited 2019 Jan 19]. Available from: https://sif-website.s3.amazonaws.com/uploads/position_paper/attachment/94/sif_position_paper_working_paper_biosimilari_set16.pdf
⁴⁰On the active involvement of the patient, see Biosimilars in the EU, op. cit.
⁴¹See Guerra G. Farmaci: quale livello di sicurezza per prodotti innovativi (parte I) [Biological medicines and biosimilars: what level of safety for innovative products? – part 1], op. cit.; Cassamagnaghi S, Miani V. Gare per l’acquisto di farmaci tra tutela della salute e le esigenze di contenimento della spesa pubblica. Il caso dei biosimilari [Tendering procedures for buying-in of medicinal products: health protection and need for the containment of public spending. The case of biosimilars], op. cit.
⁴²As it is well known, some therapeutic indications may be secondary-patent protected, and therefore – even in the presence of a biosimilar on the market – it is necessary that, in defining the tender lots, the contracting authority takes into account the exclusive right of the originator’s patent holder. Similarly, when defining the lots, it shall also be taken due account of the indications for which only the originator has been recognised as reimbursable according to Law No. 648/1996. As also confirmed by the Second AIFA position paper, the granting of this extraordinary reimbursement to the biosimilar is not automatic, but decided, case by case, by AIFA’s Commissione Tecnico Scientifica [Scientific Technical Committee], on the basis of an evaluation of clinical data, after its marketing.
⁴³See Bull. 2013/21.
⁴⁴AS1312 – Bilancio di previsione dello stato per l’anno finanziario 2017 e bilancio pluriennale per il triennio 2017-2019 in materia di acquisto di farmaci biotech e loro versioni biosimilari [State’s Estimate Budget for the financial year 2017 and Multi-Annual Budget for the three-year period 2017-2019 concerning the purchase of biotechnological medicines and their biosimilar version]. Italian
⁴⁵Legge di Bilancio di previsione dello stato per l’anno finanziario 2017 e bilancio pluriennale per il triennio 2017-2019 at the time under consideration at the Camera dei Deputati [Chamber of Deputies]. In short, Art. 59 of the Draft Law provided: (a) that biotechnological medicines (originators or biosimilars) could only be purchased through framework agreements with a basis of the call for tenders corresponding to the highest price of the originator medicine, that is to say, the most expensive product among those available; (b) the exclusion of any possible automatic substitutability between the originator medicine and its biosimilar version, as well as among biosimilar versions of the same originator; (c) the prohibition of direct tender of medicinal products with the same therapeutic indications but having different active substances.
⁴⁶The quoted paragraph reads as follows: ‘In Article 15 of Decree-Law No. 95 of 6 July 2012, converted as amended, into Law No. 135 of 7 August 2012, after Paragraph 11b shall be inserted the following: ’11c. The existence of a biosimilarity relationship between a biosimilar medicine and its biological reference only exists where it is established by the European Medicine Agency (EMA) or the Agenzia Italiana del Farmaco [Italian Medicine Agency], with due regard to their respective competences. Automatic substitutability between the reference biological medicine and its biosimilar or between biosimilars is not permitted. In the public procurement procedures for biosimilar medicines, different active substances cannot be placed in the same lot, even if they have the same therapeutic indications. In order to rationalise the expenditure for the purchase of patent-expired biological medicine with corresponding biosimilars already present on the market, the following provisions shall apply: (a) the public procurement procedures shall be carried out by use of framework agreements with all economic operators when medicinal products based on the same active substance are more than three. To this end, the regional central purchasing agencies shall provide a single lot, for the establishment of which it shall be considered the specific active substance (Fifth level ATC), the same dosage and route of administration; (b) in order to ensure effective rationalisation of expenditure and at the same time a wide availability of therapies, patients should be treated with one of the first three medicines in the framework agreement ranking, classified according to the lowest price criterion or the most economically advantageous bid. However, the physician is free to prescribe the medicine, among those included in the procedure referred to in point (a), which is considered appropriate to ensure the therapeutic continuity to patients; (c) in the event of expiry of the patent or the supplementary protection certificate of a biological medicinal product during the period of validity of the supply contract, the contracting agency shall, within sixty days from the date of marketing of one or more biosimilar medicinal products containing the same active substance, open the competitive comparison between these [products] and the reference originator medicine in accordance with the provisions of points (a) and (b); (d) the contracting entity shall be obliged to supply to the prescribers the products awarded in accordance with the procedures laid down by Legislative Decree No. 50 of 18 April 2016; (e) any additional economic charges arising from failure to comply with the provisions of this paragraph shall not be charged to the National Healthcare Service’.
⁴⁷The existence of a biosimilarity relationship between a biosimilar medicine and its biological reference only exists where it is established by the European Medicine Agency (EMA) or the Agenzia Italiana del Farmaco [Italian Medicine Agency], with due regard to their respective competences. Automatic substitutability between the reference biological medicine and its biosimilar or between biosimilars is not permitted.
⁴⁸In this regard, see Judgment of the Consiglio di Stato [Council of State] No. 616/2017, and Judgment of Lazio Regional Administrative Court (TAR) No. 3654/2017.
⁴⁹Quite different is the concept of ‘interchangeability’, which the Second AIFA concept paper, op. cit. – on the basis of the statements made the World Health Organization – defined as the clinical practice of substituting, on the initiative or with the agreement of the prescribing physician, a medicine with another, having the same risk-benefit balance and expecting to have the same clinical effect. In the latter case, the clinician is the key figure, called upon to determine if two medicines can really be comparable in relation to the individual patient.
⁵⁰In particular, the EMA has published its own guidelines on development and authorisation of the different categories of biosimilars thus seeking to steer the Regulatory Agencies – more than the health professionals – in this direction. The European Agency stated that its recommendations on the marketing of medicinal products do not specify whether biosimilar medicines should be used in an interchangeable way: the decision on prescribing a specific medicine, originator or biosimilar, is to be entrusted to qualified health personnel. Doc. Ref. EMEA/74562/2006 Rev. 1; EMA/837805/2011.
⁵¹The underlying logic of Law No. 648/1996 was partially amended by the effect of Art. 3 of Decree-Law No. 36 of 20 March 2014, introducing in the aforementioned Law Art. 4b, which provides the possibility to reimburse, under certain conditions, an unauthorised therapeutic indication, even if a licenced therapeutic alternative is available.
⁵²‘In order to ensure effective rationalisation of expenditure and, at the same time, a wide availability of therapies, patients should be treated with one of the first three medicines in the framework agreement ranking, classified according to the lowest price criterion or the most economically advantageous bid. However, the physician is free to prescribe the medicine, among those included in the procedure referred to in point (a), which they consider appropriate to ensure therapeutic continuity to patients’.
⁵³Art. 13 of the Italian Code of Medical Ethics of the Federazione Nazionale dei Medici Chirurghi e degli Odontoiatri [National Federation of Surgeons and Dentists], in the edition of December 2006 currently in force, gives to the professional the freedom of choice and, on the other hand, the accountability for the information given to the patient, aimed at achieving their consent to the treatment (Articles 33-35). The general practitioner’s right to prescribe, to the best of their knowledge and belief, is legislated by Art. 15a of the Presidential Decree No. 70/2000. In respect to the doctor’s freedom of prescription, see Massimino F. La responsabilità nella prescrizione dei farmaci tra scienza, coscienza e condizionamenti normativi [Accountability in the prescription of medicines: science, conscience and regulatory conditioning]. Danno e Responsabilità. 2013;(1):5-21. [Italian].
⁵⁴See, ex multis: Judgment of Court of Cassation, Fourth Criminal Division, No. 35922/2012; Judgment of Court of Cassation, Fourth Criminal Division, No. 8254/2010.
⁵⁵In this respect, see the Constitutional Court’s Ruling No. 88 of 26 July 1979, in Giur. It., 1980, I, 9 ff. The decision of the Constitutional Court on biological damage No. 184 of 14 July 1986 takes the same view, in Giust. Civ., 1986, I, 2324 ff. and in Foro it., 1986, I, 2953.
⁵⁶The Constitutional Court also took the same view. In Judgment No. 196 of 12 July 2017, it reiterated ‘the personal nature of health care, so that law provisions cannot be an obstacle to the doctor assessing on a case by case basis, according to the most up-to-date and accredited technical-scientific knowledge, the most suitable therapy to ensure the protection of the patient’s health’. In this regard, see, amongst other Judgments of the Costitutional Court, Judgment No. 151/2009.
⁵⁷See Ruling of the Piemonte Regional Administrative Court No. 10/2016 of 9 June 2016. Also, the Rulings of the Piemonte Regional Administrative Court No. 382/2017, No. 385/2017 and No. 485/2017 take the same view.
⁵⁸In this regard, see the Rulings of the Consiglio di Stato [Council of State] No. 3572/2011 and No. 3539/2012. This is also the view of the Ruling of Puglia Regional Administrative Court No. 243/2014, which replaced a regional resolution requiring doctors to prescribe molecules chosen from those with expired patents, with possible derogation from this obligation only in case of a reasoned therapeutic choice, and the Ruling of Lazio Regional Administrative Court No. 4514/2014, which highlights that an administrative decision affecting the full reimbursability of class A medicines and the doctor’s right to prescribe them, is to be considered unlawful. More so, when the ‘recommendation’ to use certain medicines in place of others comes from subjects who do not have the competence, which is reserved by law for the AIFA as guarantor of the national standard of the pharmaceutical system (Art. 48, Par. 2 of Law No. 326/2003). Similarly, see the Ruling of Sicilia Regional Administrative Court, No. 603/2014, which stated that any broad guidelines leading to prefer the less expensive medicinal product cannot be considered as binding for the physician. In the same view, the recent Ruling of the Consiglio di Stato [Council of State] No. 4546/2017.
⁵⁹In this regard, see the recent Ruling of the Consiglio di Stato No. 3627/2017, according to which the physician has exclusive competence and accountability to prescribing the most expensive medicine to the naïve patient, regardless the less expensive medicine having won the tender, in case of insufficiently documented clinical response by the patient to the latter, both in terms of less tolerance to the medicine as well as of lower efficacy.
⁶⁰In this sense, see the Judgment of the Court of Cassation, Fourth Criminal Division, No. 8254/2011, whereby the Supreme Court rejected the acquittal of a doctor who discharged a patient suffering a serious heart attack only nine days after the event, acting in compliance with the regional guidelines for the treatment of this condition. The patient subsequently deceased as a result of his disease. In this case, the Court reiterated that the physicians shall practice the medical profession to the best of their knowledge and belief, with the sole purpose of curing the disease and caring for the patient, without being influenced by directives which, although legitimately aimed at saving money, are not relevant to the tasks, and the consequent liabilities, entrusted to the doctor by the law. According to the ruling in question, in fact, the observance of the ‘regional guidelines’ cannot, in itself, constitute the benchmark for the assessment of the doctor’s practice legitimacy. Neither can it affect the patient’s right to receive the most appropriate medical services, or exempt the physician from his/her accountability for ensuring the safety of the patient. By adopting a view confirmed also in more recent opinions, the Supreme Court denied, therefore, that adherence to regional guidelines, and to the underlying objective of saving money, may constitute a justification pursuant to Art. 51 of the Criminal Code, or that they may exclude a judgment of negligence on the physician’s performance, in the event that he/she has not assessed the patient’s condition with due attention.
⁶¹With regard to public tenders with composite lots for the procurement of biological medicines with different active substances, there is a precedent. This has resulted in a dispute, at the end of which the Emilia Romagna Regional Administrative Court and the Consiglio di Stato, in the Ruling 1/2009 and 7691/2009, respectively, legitimised the decision of the Bologna AUSL (Azienda Unità Sanitaria Locale, [Local Health Authority]), that in 2008 grouped inside two lots diverse biological medicines with the same indications, considering them comparable in the therapeutic efficacy. In this case, the administrative courts considered that, despite being unable to determine a concrete comparability of different active substances for the same indication, the institution could not be prevented from conducting its own investigation to assess that different medicines may be interchangeable and, so, compete against each other. The aforementioned judgments – which have undoubtedly aroused perplexity, having considered as conclusive the assessment of an internal committee of the contracting authority on the very important scientific issue of comparability among medicines having different active substances – shall be regarded as outdated, in the light of further regulatory developments in the field of therapeutic equivalence. On this subject, see M De Rosa, Gare: Biosimili ammessi in comparazione terapeutica ma determinate condizioni, in TEME, September 2010, and F. Massimino, Farmaci biologici e biosimilari e tutela della salute e della concorrenza [Biological medicines and biosimilars, protection of health and competition], in Diritto industriale, 4/2012.
⁶²At the request of the Molise Regional Administrative Court, the Consiglio di Stato (Division I, Opinion No. 3992/06 of 20 June 2007) pointed out that adopting the therapeutic equivalence criterion in public tendering procedures poses a major problem in the case of biotechnological medicines, because a therapeutic equivalence of efficacy can be asserted, without concerns about safety, only for medicines of chemical origin. The manufacturer of biotechnological medicines can produce, as scientific data, only the safety and efficacy profile of its own medicine. This implies that there is not high replicability of the effects and of the possible adverse reactions. In essence, there is no evidence of an ‘acceptable replicability rate of the products’. The Consiglio di Stato, with the Ruling No. 7690/2009, established what already stressed in the aforementioned Opinion, stating that biological originators and biosimilars, ‘even if marketed in the same therapeutic indications, are not equivalent, unless this equivalence is specifically ascertained on the occasion of the structuring of the invitation to tender’: an assessment to be carried out, therefore, on a case by case basis.
⁶³In this regard, see the Ruling of Trento Regional Administrative Court No. 178/2017, pointing out that the wording of the aforementioned provision ‘does not leave a margin of uncertainty as to whether [in this circumstance] the use of framework agreements with all economic actors is prescribed’.
⁶⁴Art. 54 of the Decree-Law No 50/2016.
⁶⁵It is necessary to underline that Art. 1, Par. 407 of Law No. 242/2016 still allows the doctor to prescribe a medicine which has not been ranked among the first three, providing that it is ‘among those included in the procedure’. This means that the participation to the tender constitutes the only necessary requirement to legitimize the prescription of the doctor. In this case, though, physicians are required to justify why none of the three medicines covered by the framework agreement considered appropriate for the treatment.
⁶⁶Par. 4 of Art. 95 establishes that the lowest price criterion may – and not shall – be used:
(a) for amounts less or equal to EUR 1,000,000, taking into account that compliance with quality standards is ensured by the requirement whereby the procurement procedure is carried out on the basis of the executive project;
(b) for services and supplies with standardised characteristics or with market-driven conditions;
(c) for services and supplies of less than the Community threshold, characterised by high repetitiveness, with the exception of those with significant technology and innovativeness.
⁶⁷Art. 66 of the Decree-Law No. 50/2016 provides that ‘before launching a procurement procedure, the contracting authorities may conduct market consultations with a view to preparing the procurement and informing economic operators of their procurement plans and requirements’.
⁶⁸The classification at issue is used by AIFA with reference to the reimbursement of medicines.
⁶⁹Of the same opinion is the OECD report cited by the European Commission in the Decision of 15 June 2005, case A.37.507 Generics/AstraZeneca, op. cit., point 518, to which we refer for further consideration.
⁷⁰With regard to the doctor’s judgement on the substitutability of medicines, see AGCM Decision No. 33858 of 29 September 2016 on the Aspen case, confirmed by the Lazio Regional Administrative Court under Judgment No. 8945 of 26 July 2017.
⁷¹Court of Justice, 13 February 1979, case 85/76, Hoffmann-La Roche v Commission, op. cit., point 41; Court of First Instance, 23 October 2003, Case T-65/98, Van der Bergh Foods v Commission, in ECR, p. II-4653, points 154 and 155.
⁷²To confirm such complexity, we can recall that some biological medicines may also be prescribed – and reimbursed by the NHS – for unauthorised therapeutic indications, for example those included in the 648 list. In this case, we should ask ourselves whether the notions of relevant market and dominant position are really appropriate, provided that the undertaking holder of the marketing authorisation is obliged to maintain a position of neutrality about the doctor’s autonomous and spontaneous choice to prescribe the medicine for unauthorised use and, therefore, refrain from any action that may have a promotional or commercial impact on the sales of that medicine.
⁷³Thus, for example, the General Court, 1 July 2010, case T-321/05, AstraZeneca v Commission, cit., point 379.
⁷⁴See Court of First Instance, 14 December 2005, Case T-210/01, General Electric v Commission, in ECR, p. II-5575, point 215.
⁷⁵See Communication from the Commission — Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, published on the Official Journal of the European Union, 24 February 2009.
⁷⁶In this sense, see the judgements of the French Court of Appeal and the French Supreme Court in the Flavelab case of 8 April 2008 and 17 March 2009, respectively, overruling the Decision of the French Competition Authority on 14 March 2007.
⁷⁷Not surprisingly, the British Biosimilars Association came out in favour of the framework agreement. British Biosimilars Assocation [homepage on the Internet]. [cited 2019 Jan 19]. Available from: http://britishbiosimilars.co.uk/hot-topics
⁷⁸‘Precisely because the physician is the prescriber selecting the medicines suitable for the treatment of any specific condition, the advertising and information activities of the pharmaceutical companies are targeted to them. Accordingly, these activities are one of the main areas of competition for the pharmaceutical companies’ (see Servor Italia-Biological Drug Institute Case, AGCM Provision No. 7337 of 1 July 1999, and Istituto Gentili-Merck Sharp & Dohme Case, AGCM Provision No. 1333 of 25 February 1999).
⁷⁹In this regard, see Arnaudo L. Equivalenti, biosimilari, gare. Appunti di governo concorrenziale della spesa farmaceutica [Equivalents, biosimilars, procurement procedures. Notes on competition in the pharmaceutical spending]. Mercato Concorrenza Regole. 2013;(2):339-60.
⁸⁰For a thorough clarification on this subject, see Gorza S. L’informazione scientifica e la pubblicità in materia di biologici originator e biosimilari: profili concorrenziali. [Competition in scientific information and advertising of biological originators and biosimilars]. Farmaci originator, biosimilari e antitrust [Originator Medicines, Biosimilars and Antitrust], Milan, 30 May 2017. The presentation is available from: http://www.rucellaieraffaelli.it/docs/news/relazioni/Sara%20Gorza.pdf
⁸¹As stated by the AGCM in Misleading and comparative advertising: a small guide for consumer protection: ‘comparative advertising is fair if the comparison is made between competitors, if it doesn’t deceive consumers – also by confusing different products –, if the relevant information is about essential, pertinent and nonetheless verifiable characteristics, and if it does not have the sole purpose of discredit the competitor’.
⁸²According to the Code of Ethics of Farmindustria [Italian Association of Pharmaceutical Companies], in the version of 12 October 2016: ‘[…] companies must not damage the image and products of any competing companies. The companies required to promulgate specific internal policy directives for their employees are also ethically and professionally liable for their behaviour […]’. With regard to misleading advertising, see also Decree-Law No. 145 of 2 August 2007.
⁸³Regarding sham litigations, see Muscolo G. Abuse of litigation, abuse of patent and abuse of dominance: where do we stand? In Pitruzzella G, Muscolo G, editors. Competition and patent law in the pharmaceutical sector – an international prospective. Wolters Kluwer, Alphen aan den Rijn; 2016. p.107.
⁸⁴For more information on this issue and the cases at issue, see Lasserre B. Raising artificial barriers against generic entry: the French experience. In Pitruzzella G, Muscolo G, editors. Competition and patent law in the pharmaceutical sector – an international prospective, Wolters Kluwer, Alphen aan den Rijn; 2016. p. 187.
⁸⁵With regard to the judgment of the Court of Cassation mentioned here, see Massimino F. Brevetto nullo di medicinale e concorrenza sleale: quali limiti ed obblighi per il titolare [Invalid medicine patent and unfair competition: holder’s limitations and obligations]. Il Diritto industrial. 2017;(1):39.
⁸⁶In this respect, the view of the aforementioned Lazio Regional Administrative Court No. 8945/2017 on the Aspen Case, is of particular interest. Here, invoking the Judgment of the Consiglio di Stato, Fourth Division, 15 May 2015, No. 2479, A428 – Wind-Fastweb/Condotte TI, it reiterated that the relationship between regulatory authorities and competition authorities must not be a factor ‘for exclusion and overlap’, i.e. ‘not for antithesis, but for complementarity’. The AGCM’s measures cannot replace scientific or regulatory assessment of the exclusive competence of AIFA, but – starting from them – must be implemented ‘where the regulatory provisions allow companies to keep anti-competitive conducts’ (Par. 3.7).

Author for correspondence: Enrico Adriano Raffaelli, LLB, JD, Rucellai & Raffaelli, 18 Via Monte Napoleone, IT-20121 Milano, Italy

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