The potential of generics policies: more room for exploitation–PPRI Conference Report

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Author byline as per print journal: Sabine Vogler, PhD; Nina Zimmermann, MA

Introduction: This Conference Report aims to provide an overview of key results, messages and conclusions of the Pharmaceutical Pricing and Reimbursement Information (PPRI) Conference with regard to generics.
Methods: The PPRI Conference, organized by the World Health Organization (WHO) Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies, took place in Vienna, Austria, on 29 and 30 September 2011, with keynote talks, presentations of policies and research results, poster sessions and panel discussions.
Results: Several presentations and discussions addressed the topic of generics (64% of all invited contributions, 46% of the accepted abstracts). European and non-European countries use incentives to promote generics as part of their pharmaceutical policy. Budgetary pressure on policymakers has created a sense of urgency to encourage measures to increase generics uptake (i.e. achieve a higher generics market share). There are considerable differences between the prices of originators and (lowest) generic medicines. Presentations included case studies on how to enhance generics uptake.
Conclusion: Although policies on generics were not a specific programme strand of the conference, this was a recurring theme throughout. An important lesson from the conference was that the full potential of policies on generics has yet to be fully exploited. Generics uptake could be improved by a more consistent implementation of generics policies.

Submitted: 22 May 2012; Revised: 5 August 2012; Accepted: 10 August 2012; Published online first: 31 August 2012

Introduction

On 29 and 30 September 2011, the World Health Organization (WHO) Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies organized the second PPRI Conference in Vienna, Austria. This was attended by 275 delegates (officials and staff of public authorities and payers, pharmaceutical companies, researchers) from 56 countries, and included 60 speakers, panelists and chairs. It addressed pharmaceutical policies from a public health perspective, from both a European and global context.

The first PPRI Conference took place in June 2007 in order to present preliminary results of the research project ‘Pharmaceutical Pricing and Reimbursement Information (PPRI)’ co-funded by the European Commission, Directorate General Public Health and Consumers (DG SANCO) which ran from September 2005 until the beginning of 2008 [1–3]. The first PPRI Conference focused on European pricing and reimbursement policies [4], but generics policies were not a key topic at the conference. Just one presentation, by Professor Richard Laing from WHO, about availability, affordability and price components of medicines in developing and transitional countries [5], highlighting price differences between originators and generic medicines assessed according to WHO/HAI (Health Action International) methodology [6, 7], addressed the generics policy.

The second PPRI Conference was organized in response to requests from participants at the previous conference for a follow-up, and was an activity under the terms of reference of the WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies (established in June 2011). The conference objective was to provide information about the activities and the results of the PPRI and Pharmaceutical Health Information System (PHIS) projects. The PPRI initiative has continued as a voluntary networking and information sharing initiative of competent authorities for pricing and reimbursement after the PPRI project officially ended in 2008. The PHIS project (September 2008 to April 2011) [8] was based on the lessons learned and looked particularly at medicines management in the inpatient sector, for which scant literature existed. As a result, the PHIS project called for an urgent improvement in cooperation at the interface between outpatient and hospital sectors [9].

The second PPRI Conference therefore had a focus on ‘hospital pharma and interface management’ and contained three parallel strands: (1) pricing and reimbursement, (2) rational use of medicines and (3) hospital pharma and interface management. The majority of the participants (more than 50 per cent) attended the strand on ‘pricing and reimbursement’. The topics of generics and generics policies appeared in all three strands.

Panelists and speakers in the plenary sessions

Generics were mentioned in 48 (64%) of the total of 75 contributions (presentations, posters, panel discussions), and in 22 of 48 accepted abstracts (46%). During the first high-level panel discussion Mr Kees de Joncheere, then Regional Adviser for Health Technology and Pharmaceuticals for WHO Europe (now Head of the Essential Medicines Department in WHO Headquarters), stressed the great potential of generics policies and the need to apply these more frequently. Mr Richard Bergstrom, President of the European Federation of Pharmaceutical Industries and Associations stated that ‘once patents expire, prices should fall to a low, but sustainable, level’. In this panel discussion but also throughout the conference there appeared to be a common understanding that generics competition works well. Dr Andreas Seiter, Senior Health Specialist, World Bank [10], expressed concern about having a pricing regulation policy that fixes a difference between the originator and the generic(s) (so-called ‘generic price link’ [11]) because this could impede further benefits and savings that could be achieved through full generics competition.

Country case studies

Presentations and posters described the pharmaceutical situation in 37 different countries, including generics policies and their outcomes. In Croatia, for instance, a generic price link and reference price system, together with policy measures targeting new medicines, have contributed significant savings to the Croatian Social Insurance in 2009 and 2010. Expenditure by Croatian Social Insurance on medicines in the outpatient sector corresponded to Euros 393 million in 2010, 2.9% lower than in the previous year. And in the first months of 2010, public pharmaceutical expenditure in the outpatient sector was 13% lower than that of the first half year of 2009, resulting in a 22% reduction in the health insurance deficit. The savings enabled 47 new innovative medicines to be added to the positive list, i.e. the list of medicines that may be prescribed at the expense of a public payer [12] and 13 medicines to the list of expensive hospital products from July 2009 to July 2010 [13].

Generics policies were highlighted as a policy option for countries, e.g. Ireland, Portugal, and Spain, that needed to implement a bundle of measures in order to respond to the global financial crisis. The crisis created, as one participant [14] commented, ‘a sense of urgency’ to implementing measures. Dr Miguel Gomes from the Portuguese Medicines Agency [15] reported that following the ‘Memorandum of Understanding’ with the ‘Troika’ (International Monetary Fund, European Central Bank, European Commission), savings measures were swiftly implemented. Previously, Portugal’s pricing system for generics set a reference price, i.e. reimbursement amount within a cluster of medicines of identical active ingredient, dosage and pharmaceutical form [12]; defined by the highest priced generics in the cluster [11, 16]. This situation had been criticized as a lost opportunity for savings [17, 18]. Portugal was the only country of the EU to have higher generics market shares in value than in volume [1], which is an indicator of a high price level of generic medicines. A change in methodology in 2010 led to the reference price being redefined as the average of the five cheapest generics [19]. Dr Gomes presented data on how the generics market had developed well, from a starting point of 3.5% in volume in 2003 to a break-even point in 2010 at which generics shares became lower in value than in volume, see Figure 1. Additional data on the development of the average generics prices confirmed a reduction in prices of generic medicines from the first months of 2010 onwards [15]. Generics policies therefore need to be designed for maximum potential benefit.

Figure 1: Development of generics market share in Portugal 2003–2011[15]

Case studies of enhancing generics uptake

Some European countries reported about differences in price between original products and generic medicines, for example, regarding generic omeprazole and simvastatin [20], see also the article [21] generic ACE (angiotensin-converting-enzyme) inhibitors and SSRI’s (selective serotonin re-uptake inhibitors). Dr Kristina Garuoliene, from the Lithuanian National Health Insurance Fund demonstrated how her country, with its small population, was able to achieve considerable price reductions for generic versus originator medicines, see Table 1 [22]. Dr Kristina Garuoliene also presented a case study of clopidogrel and described how public authorities and payers were concerned about how differences in the salt composition, and indications, between originator and generic clopidogrel could potentially reduce savings from generics availability. Responding to efforts by the originator company to retain sales, authorities adopted ‘pragmatic approaches’ to enhance generics prescribing, e.g. mandatory generics substitution, educational activities, see Table 2 [23, 24]. Still, the differences in the reimbursed prices of generic clopidogrel versus the originator were high across Europe, especially briefly after launch, but decreasing over time.

Table 1: Reduction in reimbursed expenditure/DDD for selected generic ACEI in 2009, and selected SSRI in 2007, compared to originator prices in Lithuania 2001[22]

Table 2: Strategies to enhance generic clopidogrel use and reactions from the pharmaceutical industry[23]

In Abu Dhabi, a new policy for generic medicines, including compulsory international non-proprietary name prescribing, was introduced in 2009. However, the expected savings did not fully materialize since there were no accompanying measures to support an increased generics uptake. Abu Dhabi is now exploring a policy of introducing demand-side measures, including educational activities and the introduction of a reference price system for medicines grouped together if they had the same active ingredients [25].

GaBI (Generics and Biosimilars Initiative) at the ‘Meet the Editors’ session

The relevance of generics was highlighted at the fringe ‘Meet the Editors’ session where Dr Brian Godman presented the Generics and Biosimilars Initiative Journal (www.gabi-journal.net), of which he is a member of the International Editorial Advisory Board.

Conclusion

In the final panel discussion, experts from the Norwegian Directorate of Health, OECD, the Southern African Development Community, the WHO Collaborating Centre at Harvard University and WHO Europe stressed the importance of generics policies. The following consensus statement was issued in a conclusion document: ‘Generic[s] policies appear not to be fully exploited yet. At the PPRI Conference, generics were identified as one area where competition works. There is common understanding that savings from generics might be invested for funding innovation. However, as evidence on generics penetration across the countries demonstrated, generics uptake could be improved by more consistent generic[s] policies’ [26]. The PPRI Conference confirmed that in order to achieve the best possible benefits from generics policies, they have to be carefully designed and implemented in a consistent way.

This is an original report from the PPRI Conference. Conference presentations, abstracts and posters are publicly available from: http://whocc.goeg.at/Conference2011/Programme

For patients

The PPRI Conference offered several good practice examples as well as a few less successful stories about the implementation of generics policies. Such sharing of information is crucial for policymakers to know the impact of generics policies. Well-informed policymakers can contribute more effectively towards improving the accessibility of medicines, e.g. by applying generics policies in a consistent way and thus creating opportunities for innovation.

A further conclusion from the conference was that the perspectives of consumers and patients should be taken into account. Participants were reminded that pharmaceutical policies should benefit all citizens, especially vulnerable groups, and that their perspectives should be actively considered.

Acknowledgements

We are very thankful to all who contributed to the success of the PPRI Conference. First of all, we thank the scientific programme committee who supported the organizers in the development of the agenda including the selection of abstracts. Members of the scientific programme committee of the PPRI Conference included Mr Jaime Espin Balbino from the Andalusian School of Public Health (EASP); Ms Margaret Ewen from Health Action International (HAI); Mr Kees de Joncheere, WHO; Professor Richard Laing, WHO; Ms Aukje Mantel-Teeuwisse, Utrecht University, WHO Collaborating Centre for Pharmacoepidemiology and Pharmaceutical Policy Analysis; Mr Øyvind Melien, Norwegian Directorate of Health; Ms Claudia Habl from the Austrian Health Institute (GÖG); and the authors of this manuscript. Further, we thank all speakers, panelists and chairs for their contributions. We particularly thank all those who submitted a large number of high quality abstracts, and those who actively participated with questions and comments. Finally, we are grateful to colleagues in the Austrian Health Institute for their organisational help.

Sources of support

The PPRI Conference was organized by the WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies, located at the Health Economics Department of Gesundheit Österreich GmbH/Geschäftsbereich ÖBIG – Austrian Health Institute under its Terms of Reference as a WHO Collaborating Centre (//apps.who.int/whocc/Detail.aspx?cc_ref=AUT-14&cc_city=vienna&). Funding for the Vienna WHO Collaborating Centre’s activities is provided for by the Austrian Federal Ministry of Health who is the legal owner of the Austrian Health Institute. The PPRI Conference was open to anybody interested in the field. Participants were charged a conference fee to cover logistical and organizational costs.

Competing interests: None.

Provenance and peer review: Commissioned; externally peer reviewed.

Co-author

Nina Zimmermann, MA, Researcher, Geschäftsbereich ÖBIG, Austria

References
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5. Laing R. Pharmaceutical Pricing – Availability, Affordability and Price Components in developing and transitional countries. PPRI Conference; Vienna: PPRI (Pharmaceutical Pricing and Reimbursement Information); 2007. Available from: http://ppri.goeg.at/Downloads/Presentations/05_WHO_Geneve_Mr_Laing.pdf
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11. Vogler S. The impact of pharmaceutical pricing and reimbursement policies on generics uptake: implementation of policy options on generics in 29 European countries – an overview. Generics and Biosimilars Initiative Journal (GaBI Journal). 2012;1(2):93-100. doi:10.5639/gabij.2012.0102.020
12. WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies [homepage on the Internet]. Glossary of pharmaceutical terms. Vienna: 2011 [latest update of print version: 2011; regularly updated online; cited 2012 Aug 31]. Available from: http://whocc.goeg.at/Glossary/Search
13. Voncina L, Strizrep T, Godman B, Vlahovi-Palevski V. Recent policies to reduce drug costs and the budget deficit in Croatia: impact and example to others. PPRI Conference Abstract Book; Vienna: PPRI (Pharmaceutical Pricing and Reimbursement Information); 2011. Available from: http://whocc.goeg.at/Downloads/Conference2011/Abstract_poster_book.pdf
14. Koopmanschap M. Generic medicine pricing: on track in Europe? Generics and Biosimilars Initiative Journal (GaBI Journal). 2012;1(1):5. doi:10.5639/gabij.2012.0101.002
15. Gomes M. Pricing and reimbursement policies in the light of the financial crisis. Country examples: Portugal. PPRI Conference. Vienna: PPRI (Pharmaceutical Pricing and Reimbursement Information); 2011. Available from: http://whocc.goeg.at/Downloads/Conference2011/PraesentationenPPRIKonferenz/Day1_afternoon_Festsaal_1300_Gomes.pdf
16. Teixeira I, Vieira I. PPRI Pharma Profile. Portugal. Vienna: PPRI (Pharmaceutical Pricing and Reimbursement Information); 2008.
17. Habl C, Vogler S, Leopold C, Schmickl B, Fröschl B. Referenzpreissysteme in Europa. Analyse und Umsetzungsvoraussetzungen für Österreich. Wien: ÖBIG Forschungs- und Planungsgesellschaft mbH; 2008.
18. Vogler S, Leopold C. Access to essential medicines in Portugal. Vienna: ÖBIG Forschungs- und Planungsgesellschaft mbH; 2009.
19. Vogler S, Zimmermann N, Leopold C, de Joncheere K. Pharmaceutical policies in European countries in response to the global financial crisis. Southern Med Review. 2011;4(2):22-32.
20. Godman B, Burkhardt T, Garuoliene K, Teixeira I, Tulunay FC, Gustafsson L. Trends in generic pricing policies in Europe: implications for sustaining equitable and comprehensive healthcare. PPRI Conference Abstract Book; Vienna: PPRI (Pharmaceutical Pricing and Reimbursement Information); 2011. Available from: http://whocc.goeg.at/Downloads/Conference2011/Abstract_poster_book.pdf
21. Godman B, Wettermark B, Bishop I. European payer initiatives to reduce prescribing costs through use of generics. Generics and Biosimilars Initiative Journal (GaBI Journal). 2012;1(1):22-7. doi:10.5639/gabij.2012.0101.007
22. Garuoliene K, Gulbinovi J, Godman B, Wettermark B, Haycox A. European countries with small populations cannot obtain appreciable price reductions for generics: Lithuania – case history to contradict this. PPRI Conference Abstract Book; Vienna: PPRI (Pharmaceutical Pricing and Reimbursement Information); 2011. Available from: http://whocc.goeg.at/Downloads/Conference2011/Abstract_poster_book.pdf
23. Baumgärtel C, Garuoliene K. Enhancing the utilisation of generic clopidogrel: a case history for future guidance? PPRI Conference. Vienna: PPRI (Pharmaceutical Pricing and Reimbursement Information); 2011. Available from: http://whocc.goeg.at/Downloads/Conference2011/PraesentationenPPRIKonferenz/Day2_morning_Sitzungssaal_1130_Baumgärtel.pdf
24. Baumgärtel C, Godman B, Malmstrom R. What lessons can be learned from the launch of generic clopidogrel? Generics and Biosimilars Initiative Journal (GaBI Journal). 2012;1(2):58-68. doi:10.5639/gabij.2012.0102.016
25. Abuelkhair M, Godman B, Fahmy S, Abdu S, Gustafsson LL. Challenges when introducing policies to engineer low prices for generics: experiences from Abu Dhabi. PPRI Conference Abstract Book; Vienna: PPRI (Pharmaceutical Pricing and Reimbursement Information); 2011. Available from: http://whocc.goeg.at/Downloads/Conference2011/Abstract_poster_book.pdf
26. WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies. PPRI Conference. Final conclusions. Vienna: 2011. Available from: http://whocc.goeg.at/Downloads/Conference2011/PPRI_Conference_Conclusions_final.pdf

Author for correspondence: Sabine Vogler, PhD, Head of WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies, Health Economics Department, Gesundheit Österreich GmbH/Geschäftsbereich ÖBIG – Austrian Health Institute, 6 Stubenring, AT-1010 Vienna, Austria

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The MEDICRIME Convention: criminalising the falsification of medicines and similar crimes

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Abstract: 
Trade in falsified/counterfeit medical products is a growing global criminal industry, posing a major threat to patients and healthcare systems. Falsified/Counterfeit medical products circulate via unregulated channels, especially the Internet. The Council of Europe’s ‘Convention on counterfeiting of medical products and similar crimes involving threats to public health’ [1] is the first international treaty that establishes a legal framework for combating this trade. It provides for the criminalization of certain acts, protects the rights of victims of the offences, and promotes national and international cooperation.

Submitted: 15 June 2012; Revised: 8 August 2012; Accepted: 10 August 2012; Published online first: 20 August 2012

Introduction

Threats to public health related to falsified/counterfeit medical products and similar crimes have now reached truly global proportions. Trade in falsified/counterfeit medical products represents a multi-billion euro industry that poses a major threat not only to patients, who are particularly vulnerable, but also to the integrity of healthcare systems. It is often linked to organised crime and generates substantial profits, with a low risk of being intercepted and relatively mild penalties in comparison, for example, to the trafficking of narcotic drugs.

Falsification/Counterfeiting of medical products and similar crimes affect all countries, be it as countries of origin, transit or marketplace. As with all clandestine criminal activities, it is impossible to gauge exactly the extent of the problem. According to World Health Organization (WHO), falsified/counterfeit medical products account for less than one per cent of market value in developed countries, where there are efficient regulatory control mechanisms [2]. But many countries in Africa and parts of Asia and Latin America have areas where more than 30 per cent of the medicines on sale can be counterfeit, while in many of the countries of the former Soviet Union the proportion of falsified/counterfeit medicines is over 20 per cent of market value [3].

Falsified/Counterfeit medicines and devices circulate globally via unregulated channels, especially through widespread use of unauthorised online pharmacies, due to the fact that it is not always obvious for users whether e-pharmacies operate legally. Estimates suggest that global sales of counterfeit medicines were worth US$75 billion (approximately Euros 60 billion) in 2005 and were expected to double in just five years between 2005 and 2010 [4]. Numerous studies have also reported large numbers of websites supplying prescription-only medicines without a prescription and people buying medicines online despite being aware of the dangers [4].

A 2008 report by the European Alliance for Access to Safe Medicines found that 62 per cent of medicines ordered online and without a prescription were substandard and/or counterfeit (68 per cent were unlicensed imitations; the rest were counterfeit branded medicines). Even among the 38 per cent of genuine medicines, 16 per cent were illegal non-EU imports and 33 per cent had no patient information leaflet [4].

The Council of Europe’s ‘Convention on counterfeiting of medical products and similar crimes involving threats to public health’ (MEDICRIME Convention), adopted on 8 December 2010, establishes a legal framework for the worldwide fight against falsified/counterfeit medical products and similar crimes, applying a three-fold focus: providing for the criminalisation of certain acts, protecting the rights of victims of the offences established under the Convention, and promoting national and international cooperation (Article 1).

The Council of Europe’s contribution to the solution

The Council of Europe (CoE), founded in 1949 by 10 states, now has 47 Member States spanning the whole of Europe, and as observers Canada, Holy See, Israel, Japan, Mexico and USA. Building on its values, which include protecting human rights and the rule of law, and finding common solutions to the challenges facing European society, the CoE has been active in the field of crime prevention and crime control since 1958. The CoE’s European Committee on Crime Problems identifies priorities for intergovernmental legal cooperation; makes proposals to the Committee of Ministers (its decision-making body) on activities in the fields of criminal law and procedure, criminology and penology; elaborates conventions, agreements, recommendations and reports; and organises criminological research conferences.

The CoE has drawn on this rich experience and its cooperation with national and international bodies involved in combating falsified/counterfeit medicines—including EU agencies, WHO and the OECD—in elaborating the MEDICRIME Convention, using criminal law concepts and measures that are basic and globally applicable. Reflecting the global impact of the problem of falsified/counterfeit medical products and similar crimes, the Convention is open for ratification by any country in the world, including major producer countries such as China and India, upon invitation by the Committee of Ministers (Article 28).

Definitions and scope

The MEDICRIME Convention defines the term ‘counterfeit’ as ‘a false representation as regards identity and/or source’ (Article 4), and ‘similar crimes’ as the unauthorised manufacture or supply of medicinal products or the marketing of medical devices that do not comply with conformity requirements (Article 8).

The Convention’s broad definition of counterfeit medical products is matched by its wide scope, which ‘concerns medical products whether they are protected under intellectual property rights or not, or whether they are generics or not’ (Article 3) and includes medicines for human and veterinary use, medical devices, active substances, excipients, components and accessories of medical devices, and medication used in clinical trials or studies. This broad scope will, for example, allow gaps to be filled in national legislation in cases where criminal and administrative liability for the manufacturing, distributing and selling of counterfeit medicines is not covered by current trademark and patent legislation (‘falsified medicines’).

However, one important and essential concept of the MEDICRIME Convention is that it cannot be used against (legal) generic medical products, i.e. ones authorised for marketing by a competent authority. Also, violations of the rights of owners of patents, brands and trademarks (intellectual property rights [IPR]) of medical products, which are authorised by a competent authority for marketing, are not covered by the Convention. The Convention does not in any way hinder IPR holders from seeking legal recourse via specific legislation applying to IPR. Breaches of quality norms, good practices and standards in the manufacture and distribution of medical products that are committed without criminal intent are also not subject to the Convention, nor does the Convention regulate the production and distribution of medical products under circumstances that are legal in domestic law, e.g. legal Internet pharmacies.

Meeting a global need

The manufacturing of genuine medical products is done by highly-trained professionals and takes place under strict controls by public authorities—all to ensure that the lives of patients and users are not put at risk and the best possible medication outcome is achieved.

On the other hand, falsified/counterfeit medical products are manufactured by individuals or organisations solely looking for a quick profit, without any interest in the health of the patients and users buying their products. Hence, no or wrong ingredients, wrong dosages and even toxic substances are often used in the manufacturing process, which typically takes place in an unhygienic and dangerous environment as production costs are kept to a minimum.

Intentionally putting the health and lives of patients and users at risk in this way—and in the process undermining trust in public health systems—is an attack on the right to live under the European Convention on Human Rights (withholding possible treatment to patients). States all over the world must address this urgently through criminal law measures, in order to be able to bring the criminal individuals and organisations involved to justice, seize any proceeds from the crime and protect public health.

The MEDICRIME Convention is the first international treaty that establishes as offences with criminal intent: the manufacturing of falsified/counterfeit medical products (Article 5); supplying, offering to supply and trafficking in falsified/counterfeit medical products (Article 6); the falsification of documents (Article 7); ‘similar crimes’ (Article 8); and aiding and abetting the commission of crimes under the Convention (Article 9). It aims to both prevent and combat ‘medicrime’ by providing for sanctions and measures that are ‘effective, proportionate and dissuasive’ (Article 12).

The need for effective policing

Care has been taken to lay down the framework for effective policing of the MEDICRIME Convention. Each state that is party to it must take the necessary legislative and other measures to ensure exchange of information and cooperation between health authorities, customs, police and other competent authorities in the operational management of cases on a national level (Article 17). Similarly, special provision is made for international cooperation on policing and legislation (Article 21), and effective implementation is aimed for through the designation of single points of contact (SPOCs) for cross-border cooperation (Article 22).

The role of the Internet in the global trade in falsified/counterfeit medical products is the subject of particular focus, among other things reflecting the fact that WHO figures show that 50 per cent of medicines purchased on Internet sites which conceal their real address are counterfeit. The MEDICRIME Convention therefore defines the use of the Internet related to falsification/counterfeiting as an aggravating circumstance, raising the level of sanctions (Article 13), without reducing the freedom offered generally by the Internet.

Impact on patients

Patients and other users of medical products are given strong protection by the MEDICRIME Convention. A victim of crimes under the Convention is defined very broadly as ‘any natural person suffering adverse physical or psychological effects as a result of having used a counterfeit medical product or a medical product manufactured, supplied or placed on the market without authorisation or without being in compliance with the conformity requirements as described in Article 8’ (Article 4).

The rights and interests of victims are protected in particular by: ensuring that victims have access to information relevant to their case and which is necessary for the protection of their health; assisting victims in their physical, psychological and social recovery; and providing for the right of victims to compensation from the perpetrators in domestic law (Article 19). Parties to the Convention must also take the necessary legislative and other measures to protect the rights and interests of victims at all stages of criminal investigations and proceedings, including providing full access to information regarding those proceedings, access to proper legal representation (and legal aid if necessary), and protection against intimidation (Article 20).

Impact on healthcare professionals

Overall, the MEDICRIME Convention is designed to strengthen public confidence in health authorities and healthcare systems. By ensuring the quality, safety and distribution of medical products—a prerequisite for safe health care and practices—the high value of service provided is protected and enhanced.

In particular, the Convention calls among other things for the training of healthcare professionals and providers in the matter of prevention of counterfeiting, in tandem with awareness-raising campaigns for the general public (Article 18). Also, the Convention treats an offence committed by persons abusing the confidence placed in them in their capacity as professionals as an aggravated circumstance (Article 13).

Impact for industry

As part of its focus on protecting public health, the MEDICRIME Convention includes measures which enhance the legal distribution chain.

As well as establishing the falsification of documents (e.g. customs documents, invoices, certificates, labelling) as offences (Article 7), the Convention also promotes cooperation and information exchange by industry (Article 17), thus facilitating the management of risks by competent authorities, and encourages industry to introduce the necessary quality and safety requirements for medical products, as well as safe distribution measures (Article 18).

Implementation

On 28 October 2011, the MEDICRIME Convention was opened for signature to the CoE’s 47 Member States, the CoE’s observer states, the EU and the non-Member States that participated in drafting the Convention. It is also open for signature by any other non-Member State upon invitation by the CoE’s Committee of Ministers.

As of 1 September 2012, the Convention had been signed by 17 states: Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Iceland, Israel, Italy, Liechtenstein, Luxembourg, Portugal, Russian Federation, Switzerland, Turkey and ratified by one state (Ukraine). It will enter into force when ratified by five states, including three CoE Member States.

The role of EDQM

The European Directorate for the Quality of Medicines & HealthCare (EDQM) is part of the Council of Europe and aims to lead in protecting public health by enabling the development, supporting the implementation and monitoring the application of quality standards for safe medicines and their safe use. EDQM’s standards are recognised as a scientific benchmark worldwide, and its European Pharmacopoeia is legally binding in EU Member States.

Drawing on its expertise and experience in constructing the European Pharmacopoeia with 36 Member States, EDQM started the eTACT project in mid-2009, as part of the Council of Europe’s holistic strategy to combat falsified/counterfeit medical products. The project aims to develop a secure, harmonised and standardised traceability and mass-serialisation system that will be efficient, cost-effective and flexible, and can be used by authorities and all stakeholders—including manufacturers, suppliers, distributors, pharmacists, healthcare professionals and patients—whatever the distribution route, including legitimate Internet pharmacies.

As well as developing the eTACT project, EDQM is also setting up a secure database of ‘fingerprints’ or signatures of active substances used in the manufacture of medicines. The fingerprints, which describe the profile of an active substance or excipient in order to identify the source of a medicine, are established by analytical methods. This database will help official medicines control laboratories to detect counterfeit substances and provide decision-making bodies with relevant evidence.

EDQM’s current priorities include risk management and prevention—the transfer of ‘know-how’ and proven practices to national health and law enforcement officials, e.g. through specific training, in particular a specific training platform on combating counterfeit medicinal products and protecting public health since 2007, as well as cooperation between SPOCs—and the protection of legal medical products and the legal supply chain.

Part of EDQM’s strategy is to provide international support for the implementation of the MEDICRIME Convention, focusing on regulatory systems and procedures, interdisciplinary cooperation, e.g. SPOCs, and drug enforcement.

EDQM will also seek to improve ‘know-how’ for officials in terms of applying the provisions and best practice models described in the MEDICRIME Convention, adding value to state cooperation under the Convention: synergies in protecting the legal supply chain and combating crime, and the establishment of a strong evidence base for best practices, experiences, new criminal trends, harm and impact evaluation.

Further information

As a political organisation set up in 1949, the Council of Europe works to promote democracy and human rights continent-wide. It also develops common responses to social, cultural and legal challenges in its 47 Member States.

Competing interests: None.

Provenance and peer review: Commissioned; externally peer reviewed.

References
1. Council of Europe Treaty Office [homepage on the Internet]. Council of Europe Convention on the counterfeiting of medical products and similar crimes involving threats to public health. 2011 [cited 2012 Aug 8]. Available from: http://conventions.coe.int/Treaty/EN/Treaties/Html/211.htm
2. World Health Organization [homepage on the Internet]. Medicines: spurious/falsely-labelled/falsified/counterfeit (SFFC) medicines. 2012 [cited 2012 Aug 8]. Available from: http://www.who.int/mediacentre/factsheets/fs275/en/
3. World Health Organization [homepage on the Internet]. Counterfeit drugs kill! 2006 [updated 2008 May; cited 2012 Aug 8]. Available from: http://www.who.int/impact/FinalBrochureWHA2008a.pdf
4. Jackson G, et al. Assessing the problem of counterfeit medications in the United Kingdom. Int J Clin Pract. 2012;66(3):241-50. doi:10.1111/j.1742-1241.2011.02826.x.

Author: Susanne Keitel, PhD, Director, European Directorate for the Quality of Medicines and Healthcare, Council of Europe, 7 allée Kastner, CS 30026, FR-67081 Strasbourg, France

Disclosure of Conflict of Interest Statement is available upon request.

Permission granted to reproduce for personal and non-commercial use only. All other reproduction, copy or reprinting of all or part of any ‘Content’ found on this website is strictly prohibited without the prior consent of the publisher. Contact the publisher to obtain permission before redistributing.

Last update: 12/03/2020

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Pharmacovigilance of biosimilars: challenges and possible solutions

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Author byline as per print journal: Thijs J Giezen, PharmD, PhD; Sabine MJM Straus, MD, PhD

Abstract: 
Post-marketing surveillance is essential to detect, assess and prevent adverse reactions of chemically synthesized small molecule drugs as well as biologicals, as the full safety profile can only be known after they have been placed on the market. Biologicals have specific characteristics, which pose additional challenges in pharmacovigilance.

Submitted: 18 June 2012; Revised: 16 September 2012; Accepted: 17 September 2012; Published online first: 24 September 2012

Challenges are encountered during the pharmacovigilance of biosimilars, including traceability. These challenges and possible solutions were presented at the Conference of the Drug Information Association (DIA) in Copenhagen, Denmark, in March 2012. This paper provides a summary of the presentation given at the DIA.

Post-marketing collected safety data offers a valuable and necessary complement to clinical trials [1]. This applies to both chemically synthesized small molecule drugs and biologicals. However, compared to chemically synthesized drugs, biologicals have specific characteristics which might complicate their safety assessment: 1) biologicals are often indicated for rare diseases, where it is difficult to include sufficient patients in the pre-approval clinical trials and the continuous assessment of the benefit–risk in the post-marketing setting will be more important [2]; 2) obtaining exposure data after approval can be challenging for biologicals, since they are quite often used only in the hospital setting. Population-based databases mainly include information from general practitioners (GPs) and public pharmacies and will, therefore, contain limited information on patients exposed to biologicals. In addition, biologicals are often used in multiple indications with different dosage regimens. This might further complicate the exposure assessment of biologicals and a different approach towards the estimation of the number of patients exposed is warranted [3]; 3) it is sometimes difficult to define the ‘at-risk window’, which is the period that a certain adverse event should be attributed to the drug, for biologicals, due to their often prolonged pharmacodynamic effects [4]; 4) biologicals are often indicated as second- or third-line therapy limiting their use to patients with more severe disease or worse prognosis after the failure of ‘standard treatment’. In addition, this group of patients is often treated with concomitant medication and is often suffering from other diseases. For this reason channelling bias can easily occur [3]. From the above mentioned, it is clear that pharmacovigilance for biologicals poses additional challenges as compared to small molecules. These challenges apply to all biologicals, including biosimilars. However, for biosimilars additional challenges might be encountered. This paper aims to describe challenges in the pharmacovigilance of biosimilars and provide possible solutions to improve the pharmacovigilance of biosimilars.

Pharmacovigilance of biosimilars

At moment of regulatory approval of a biosimilar there is extensive information available on the reference biological. For the biosimilar specific data is limited to the comparability exercise. It is known that (small) changes in the production and purification process of biologicals can have (major) implications on their safety profile, which will mainly be reflected in an altered immunogenicity profile. It is highly expected that adverse events based on the pharmacology of the biological are similar between biosimilar and reference product. Since the manufacturing process of the reference product is proprietary knowledge, the manufacturer of the biosimilar will not be able to precisely replicate the protein product, which may influence the benefit–risk profile [5]. Due to the known limitations of randomized clinical trials [1], and the abbreviated dossier submitted as part of the marketing application for biosimilars, pharmacovigilance is important to obtain (additional) data on the safety profile of biosimilars. From a regulatory perspective, biosimilars have the same pharmacovigilance requirements as their reference products [6]. Biosimilars should, therefore, submit a risk management plan (RMP) as part of their marketing application and should submit periodic safety update reports on a regular basis post-approval.

Routine pharmacovigilance/spontaneous monitoring
Routine pharmacovigilance includes the collection of spontaneously reported adverse events by healthcare professionals and patients. Limitations of spontaneous reports of adverse events have been widely acknowledged and described and include under-reporting and a difficult to establish causality assessment between the adverse events and the drug of interest [7, 8]. In the case of biologicals and biosimilars some additional challenges might occur in the assessment of spontaneous reports. The issue of identifiability and naming has been described extensively [9]. Since small changes in the production process can alter the safety profile of a biological it is important that an adverse event can be related to a specific biological product. The new pharmacovigilance legislation stresses the importance of traceability and Member States are obliged to implement activities to improve traceability, including collection of the name of the medicinal product and the batch number [6].

Pro-active risk management
Since November 2005 applicants are obliged to submit a RMP as part of their marketing application for all new chemical and biological entities, including biosimilars. In the RMP, the safety profile of the medicine has to be described and pharmacovigilance activities should be proposed to further study safety concerns during use of the drug in the real-world setting and, if considered necessary, additional risk minimization activities should be described.

The safety information included in the RMP of the biosimilar should not only be based on the (limited) experience with the biosimilar from the pre-registration trials but should also be based on experience with the reference product. In this way, the RMP of the biosimilar will contain information on the safety profile, which is as complete as possible. In addition, the need for additional efficacy and safety studies in indications in which the biosimilar has not been studied pre-approval, but that are based on extrapolation, should be evaluated on a case-by-case basis. This is also included in the guideline on similar biological medicinal products containing monoclonal antibodies: 1) safety in indications licensed for the reference biological that are claimed based on extrapolation of efficacy and safety data; 2) occurrence of rare and particularly serious adverse events described for the reference product; and 3) detection of novel safety signals [10].

Immunogenicity, including lack of efficacy, is a safety concern that should specifically be addressed in the RMP and the need for additional pharmacovigilance activities should be clearly evaluated. Immunogenicity studies conducted post-approval should be done on a product specific basis and are especially important in case no long-term immunogenicity data has been obtained pre-approval.

Since biologicals are often used in a hospital setting, it can be expected that databases in which mainly GP and public pharmacy data are collected contain only limited information on biologicals. Drug and disease-based registries have shown to be important tools for the post-marketing collection of safety data for biologicals in general [11, 12]. Biosimilar companies are therefore recommended to participate in already existing registries; this will, for example, improve our knowledge on very rare adverse events like progressive multi-focal leukoencephalopathy.

In case there are risk minimization activities in place for the reference product which can be considered a class effect, these risk minimization activities should be included in the RMP of the biosimilar as well.

Conclusions and recommendations

Pharmacovigilance is an important tool to gain additional knowledge and collect safety data for biologicals and biosimilars due to the limitations of randomized controlled clinical trials. Keywords in the pharmacovigilance of biosimilars are: traceability and pro-active risk management to obtain additional knowledge about the safety of a biosimilar. In this context, immunogenicity is of specific interest and collaboration between companies is encouraged.

For patients

With the recent patent expiration of some biologicals, companies are able to develop so-called biosimilars of follow-on biologics. Biologicals have a very complex production and purification process which is owned by the company of the reference product. Therefore, the biosimilar might be different from the reference product. Although these small differences are mostly not clinically relevant it might, in rare cases, lead to safety problems. Collection of safety data during use by ‘real-patients’ is therefore important as well as the traceability of the biological that has been administered if an adverse event develops [13].

Disclaimer

The views discussed here are personal and not those of the European Medicines Agency, its scientific committees or any other regulatory agency.

Competing interest: None.

Provenance and peer review: Commissioned; internally peer reviewed.

Co-author

Sabine MJM Straus, MD, PhD, Medicines Evaluation Board, Utrecht, The Netherlands; Erasmus University Medical Centre, Department of Medical Informatics, Rotterdam, The Netherlands

References
1. Stricker BH, Psaty BM. Detection, verification, and quantification of adverse drug reactions. BMJ. 2004;329(7456):44-7.
2. Heemstra EH, Giezen TJ, Mantel-Teeuwisse AK, De Vrueh RLA, Leufkens HGM. Safety-related regulatory actions for orphan drugs in the US and the EU: a cohort study. Drug Saf. 2010;33(2):127-37.
3. Giezen TJ. Risk management of biologicals: a regulatory and clinical perspective [dissertation]. Utrecht, Utrecht Institute for Pharmaceutical Sciences, Division of Pharmacoepidemiology and Clinical Pharmacology, Utrecht University; 2011.
4. Dixon WG, Symmons DP, Lunt M, Watson KD, Hyrich KL, Silman AJ. Serious infections following anti-tumor necrosis factor alpha therapy in patients with rheumatoid arthritis: lessons from interpreting data from observational studies. Arthritis Rheum. 2007;56(9):2896-904.
5. Mellstedt H, Niederwieser D, Ludwig H. The challenge of biosimilars. Ann Oncol. 2008;19(3):411-9.
6. L348/74 Official Journal of the European Union 31.12.2010.
7. Meyboom RH, Egberts AC, Gribnau FW, Hekster YA. Pharmacovigilance in perspective. Drug Saf. 1999;21(6):429-47.
8. Meyboom RH, Hekster YA, Egberts AC, Gribnau FW, Edwards IR. Causal or casual? The role of causality assessment in pharmacovigilance. Drug Saf. 1997;17(6):374-89.
9. Declerck PJ. Biotherapeutics in the era of biosimilars: what really matters is patient safety. Drug Saf. 2007;30(12):1087-92.
10. Committee for Medicinal Products for Human Use. Guideline on similar biological medicinal products containing monoclonal antibodies. London: European Medicines Agency; May 2012.
11. Zink A, Askling J, Dixon WG, Klareskog L, Silman AJ, Symmons DP. European Biologicals registers: methodology, selected results and perspectives. Ann Rheum Dis. 2009;68(8):1240-6.
12. Curtis JR, Jain A, Askling J, et al. A comparison of patient characteristics and outcomes in selected European and U.S. rheumatoid arthritis registries. Semin Arthritis Rheum. 2010;40(1):2-14.e1.
13. Declerck P. Biologicals and biosimilars: a review of the science and its implications. Generics and Biosimilars Initiative Journal (GaBI Journal). 2012;1(2):84-8. doi:10.5639/gabij.2012.0102.018

Author for correspondence: Thijs J Giezen, PharmD, PhD, Clinical Pharmacy, Hospital Medical Spectrum Twente, Postbus 50000, NL-7500 KA, Enschede, The Netherlands

Disclosure of Conflict of Interest Statement is available upon request.

Permission granted to reproduce for personal and non-commercial use only. All other reproduction, copy or reprinting of all or part of any ‘Content’ found on this website is strictly prohibited without the prior consent of the publisher. Contact the publisher to obtain permission before redistributing.

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Tighter EU rules on pharmacovigilance for biologicals

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Reference pricing systems in Europe: characteristics and consequences

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Author byline as per print journal: Pieter Dylst, PharmD; Professor Steven Simoens, MSc, PhD; Professor Arnold G Vulto, PharmD, PhD

Introduction: A reference pricing system is a system that establishes a common reimbursement level or reference price for a group of interchangeable medicines, i.e. the reference group. This article provides an overview of the different characteristics of the different reference pricing systems in Europe. Additionally, the impact of reference pricing on price competition, generic medicine use, pharmaceutical expenditure and health outcome will be discussed.
Methods: Studies relevant for this article were found by means of a literature review. A survey was carried out to document the current status of reference pricing systems in Europe. Survey data were collected from member associations of the European Generic medicines Association in the context of their 2011 survey of European drug retail markets.
Results: Many European governments have introduced reference pricing systems. Reference pricing systems reduce medicine prices but not always below the reference price, increase the use of medicines priced at or below the reference price, generate savings in pharmaceutical expenditure that tend to be limited to the short term, and do not seem to adversely affect health outcomes.
Conclusion: Reference pricing is a popular policy for governments to contain pharmaceutical expenditures and seems to be effective in the different European countries.

Submitted: 16 May 2012; Revised: 8 August 2012; Accepted: 15 August 2012; Published online first: 17 August 2012

Introduction

A reference pricing system is a system that establishes a reimbursement level or reference price for a group of interchangeable medicines. If a medicine is priced above the reference price, the patient pays the difference between the price of the medicine and the reference price, in addition to any other co-payments, e.g. prescription fee, percentage co-payment [1].

Unlike its name suggests, a reference pricing system is not a pricing system, but in fact a reimbursement system. A reference pricing system sets a common reimbursement level, i.e. reference price, for a group of medicines, thereby generating savings for the third-party payer. Manufacturers are in principle free to set prices, although medicines priced above the reference price incur an additional patient co-payment and generic medicines in some countries, e.g. Belgium, need to be priced below the reference price in order to be reimbursed.

Reference pricing can help governments to contain public pharmaceutical expenditure as it controls the reimbursement level of medicines. A reference pricing system may also promote generic medicine use because originator medicines priced above the level of the reference price are likely to lose market share as a result of the additional patient co-payment.

Many European countries have already installed a reference pricing system, see Table 1. Sweden had adopted a reference pricing system in 1993 but abandoned this in 2002 [2]. In Norway, reference pricing applied from 1993 until the end of 2000. In 2003, the Norwegian government installed a system called ‘index pricing’ to a set of off-patent medicines, which has many resemblances with a reference pricing system [3, 4]. Reference pricing is in many European countries combined with other policies such as prescribing by international non-proprietary name or generics substitution, as this combination of policies seems to positively influence each other [5].

Table 1: European countries with or without reference pricing system[6–8]

This article describes the characteristics of the different reference pricing systems in Europe. Also, the impact of reference pricing on price competition, generic medicine use, pharmaceutical expenditure and health outcome will be discussed. To this effect, a literature review and survey were carried out. The survey was used to document the current status of reference pricing systems in Europe. Survey data were collected from member associations of the European Generic medicines Association in the context of their 2011 survey of European drug retail markets [6].

Reference price methods in Europe

Table 2 gives an overview of the different methods used by European countries to set reference prices. A country may employ one or a combination of method(s) to establish reference prices. The reference price is generally calculated as a function of market prices of medicines. The medicines which are taken into account for the calculation of these reference prices can differ between countries, see Table 2.

Table 2: Methods for setting reference prices in European countries 2011[6, 8]

The different methods of setting reference prices need to be considered in the context of price competition and the volume of generic medicine use. Some European countries set the reference price at the average price level of (generic) medicines in the reference group. If accompanied by incentives to stimulate demand for generic medicines, generic medicine companies have an incentive to compete, thereby driving down (reference) prices of medicines.

Once the generic medicines market reaches a minimum level of development—for instance, a generic drug market share by volume of 40%—the reference price can be further reduced and set at the level of the lowest priced (generic) medicine. For instance, the high generic medicines market share in combination with reference prices based on the lowest priced medicines in Poland support price competition between companies and maximize savings from generic medicines use. However, other countries such as Italy and Spain have set the reference price based on the lowest priced medicine in the absence of strong incentives to stimulate demand for generic medicines, thereby undermining the development of the generic medicines market [9].

Conversely, in countries with developing generic medicines markets, setting the reference price at a higher level to encourage generic medicines market entry can be introduced as a temporary measure to boost the generic medicines market until it reaches a more mature level of development [9]. For instance, when the reference pricing system was first introduced in Portugal in 2003, the reference price was established at the level of the most expensive generic medicine. This approach increased the number of generics competitors and competition in the generic medicines market [10].

This recommendation reflects the approach used in Germany, where the reference price is calculated as a function of medicine prices and the number of generics competitors. Higher reference prices are awarded in reference groups with fewer generics competitors, thereby stimulating market entry of generic medicines companies. Conversely, reference prices are reduced and price competition is stimulated in established markets, but not to the extent that it becomes economically unviable for generic medicines companies to remain on the market [11].

In Belgium, the reference price is set at 69% (imposed by the government) of the price of the originator medicine on the day that the patent expires. This method has the benefit of guaranteeing savings to health insurance funds, but has in general not generated price reductions of generic medicines below the reference price [12].

Reference group

In a reference pricing system, equivalent medicines are put together in a reference group as defined by:

  1. active substance, i.e. medicines with the same active substance (ATC-level 5)
  2. pharmacological class, i.e. medicines with chemically-related active substances that are pharmacologically equivalent (ATC-level 4) or
  3. therapeutic class, i.e. medicines that have a comparable therapeutic effect (ATC-level 3).

The term ‘generic reference pricing’ refers to a level 1 reference group, whereas ‘therapeutic reference pricing’ relates to level 2 and 3 reference groups [13].

The methods for establishing reference groups in European countries are outlined in Table 3. Countries can implement a combination of these methods to group medicines in reference groups.

Table 3: Methods for establishing reference groups in European countries 2011[6]

The majority of countries group medicines by active substance, see Table 2. Such a method may lead to ‘re-allocation of demand’ away from off-patent medicines included in the reference pricing system towards patented medicines with a similar therapeutic indication that do not fall under the reference pricing system [9].

Re-allocation of demand occurred in Italy in the case of ranitidine: the falling market share of originator ranitidine following the advent of generic medicines was offset by increasing sales of patented medicines with the same therapeutic indication, e.g. omeprazole and its derivatives. Estimates suggest that re-allocation of demand was responsible for an increase in public pharmaceutical expenditure by 3.1% in 2003 [14].

Following the patent expiry of omeprazole in The Netherlands, a higher percentage of patients switched to another proton pump inhibitor (such as pantoprazole and esomeprazole, which are not included in the reference pricing system) than before the patent expiry of omeprazole [15].

In the Valencian region of Spain, the inclusion of fluoxetine in the reference pricing system and the market entry of generics competitors resulted in a shift away from fluoxetine to other antidepressants, e.g. escitalopram, venlafaxine, which were not included in the reference pricing system [16].

In countries that define reference groups by pharmacological class or by therapeutic class, see Table 3, the heterogeneity of medicines within the reference group increases. As a result, physicians may be incited to prescribe a specific medicine for financial reasons, i.e. avoidance of patient co-payment, rather than for clinical reasons, i.e. effectiveness, safety, drug–drug interaction profile [9].

Differences exist between European countries with respect to the consideration of dosage equivalence when establishing reference groups [13]. If there is no differentiation between dosages, e.g. 10 mg, 20 mg and 40 mg of the same active substance are included in the same reference group; 1 mg of active substance will be the cheapest in the highest dosage formulation. Thus, patients have an incentive to switch to the highest dosage of the medicine with the lowest co-payment. Alternatively, reference groups may be defined based on the defined daily dose of medicines. However, one defined daily dose of a specific medicine may not be therapeutically equivalent with one defined daily dose of another medicine in the same reference group. Defined daily doses of medicines also might change over time. World Health Organization therefore stresses that the defined daily dose methodology should not be misused for pricing and reimbursement decisions [17].

Hungary already applied a reference pricing system by active substance since 1997 and introduced a reference pricing system by therapeutic class for, amongst other medicine classes, statins in 2003. Statins were put together in one reference group based on their mechanism of action, without taking into account differences in pharmacologic profile, safety and effectiveness between individual products. As the reference price was determined based on the price per mg, the reference pricing system financially promoted the use of higher-dosed statins such as atorvastatin 40 mg and fluvastatin 80 mg. As a result, the majority of patients switched to higher-dosed statins and the anticipated reduction in the average price of prescribed statins did not materialize [18].

Reference pricing and price competition in Europe

What is the impact of a reference pricing system on price competition? The literature suggests that the introduction of a reference pricing system reduces prices of all medicines that are included in the system [19, 20]. Obviously, price reductions tend to be larger for originator medicines than for generic medicines. Also, greater price reductions have been witnessed in markets where generic medicine competition already occurred prior to the introduction of a reference pricing system [19].

The European experience with respect to price reductions below the reference price is mixed: such price competition has occurred in some countries, e.g. Lithuania [20], but not in others, e.g. Slovenia, Spain [21]. Conversely, some medicines that were originally priced below the reference price actually increased their prices to the level of the reference price following the implementation of a reference pricing system in The Netherlands [22] and in Spain [23]. Therefore, in addition to setting reference prices as a function of the prices of existing medicines, some countries have established a fixed minimum price difference between generic and originator medicines, e.g. Finland, Portugal, Spain [6].

The number of generic medicine competitors within a reference pricing system appears to be associated with the extent of competition, although this impact occurs mainly through discounting to the distribution chain rather than through price competition. Larger discounts have been observed when there are more generic medicine competitors [20, 24].

Finally, as compared with other mechanisms to regulate prices such as price caps i.e. a system where the regulator sets a maximum price that can be charged for a medicine, a Norwegian study reports that a reference pricing system stimulates generics competition to a greater extent and leads to lower prices than price cap regulation [3].

In Germany, medicine prices dropped by 10–26% in the first years following the introduction of the reference pricing system in 1989. This price reduction was greater for originator medicines that faced more generic medicines competition. However, price reductions were counterbalanced by an increase in prices of medicines that were not included in the reference pricing system [25, 26]. In Norway, the implementation of a system called ‘index pricing’ to a set of off-patent medicines in 2003, which has many resemblances with reference pricing, reduced prices of originator medicines by 18% and prices of generic medicines by 8% [3]. In Sweden, medicines covered by the reference pricing system saw a drop in prices by 19% following the introduction of the system [27].

Reference pricing and generic medicine use

In general, the implementation of a reference pricing system has been accompanied by an increase in the use of medicines priced at or below the reference price [13]. However, a literature review indicated that a reference pricing system does not aid generic medicines use if:

  1. prices of originator medicines fall to the level of the reference price
  2. the originator company launches new dosages and/or new formulations
  3. physicians switch to patented medicines with a similar therapeutic indication that do not fall under the reference pricing system (re-allocation of demand) [19].

In Germany, therapeutic reference pricing applies to the group of statins since 2005. As the manufacturer of atorvastatin claimed that atorvastatin was superior to other statins in terms of side effects and drug interaction profile, the manufacturer kept the price of atorvastatin above the reference price. As a result, the market share of atorvastatin declined from 33.3% prior to the reference pricing system to 4.8% in 2006. This volume shifted mainly towards simvastatin to which no additional patient co-payment was applicable as its price was below the reference price [28].

Reference pricing and pharmaceutical expenditure in Europe

A literature review has indicated that reference pricing systems generate savings in the short term, but that savings are probably limited to the one-off impact of the introduction of the reference pricing system and that savings may be substantial at the level of individual medicines, but not necessarily at the level of total pharmaceutical expenditure [19]. Figure 1 shows how the introduction of a reference pricing system may impact long-term pharmaceutical expenditure [29].

Figure 1: Impact of reference pricing system on long-term pharmaceutical expenditure[29]

The limited scope for savings is to be expected for at least two reasons [29]. First, the coverage of reference pricing systems tends to be limited to off-patent medicines. Patented medicines are included in the reference pricing system by therapeutic class in some countries only. Second, although a reference pricing system may reduce medicine prices and may affect the substitution of new more expensive medicines for older less expensive medicines, it does not affect other drivers of increasing pharmaceutical expenditure such as medicines use by ageing populations, the introduction of expensive biotechnology medicines and orphan medicines, and the transformation from acute to chronic diseases.

Reference pricing and health outcome

A potential concern of therapeutic reference pricing is that switches in medicine use in response to the reference pricing system may adversely affect patient health outcomes and thereby increase the use (and costs) of other healthcare services. There are few studies that explore the impact of reference pricing systems on health and they suffer from methodological limitations. Nonetheless, the available evidence suggests that there is no association between reference pricing systems and health outcomes [13, 19].

A related issue is whether a reference pricing system influences access to health (care) of patient groups with a different socio-economic status. For instance, are patients with a lower socio-economic status more likely to buy costly originator medicines (incurring an additional patient co-payment) in a reference pricing system, thereby placing a financial burden on patient groups with a lower ability to pay? Very few studies have investigated this issue, but a recent Belgian study showed that patients with a lower socio-economic status tended to buy the cheapest (generic) medicines within a reference group and incurred lower medication costs than patients with a higher socio-economic status, thereby laying to rest potential socio-economic equity concerns related to reference pricing systems [8].

Conclusion

Reference pricing is used by many European countries as one element of governments’ strategies to contain public healthcare expenditure. It puts pressure on pharmaceutical companies to compete with the reference priced product but also reduces competition beyond this reference price. It also makes patients sensitive of drug prices, as an increased use of drugs priced at or below the reference price level was observed. The introduction of reference pricing generates a once-only setback of expenditures but does not affect the overall growth rate of health expenditure in the long term. No association between reference pricing and health outcome has been observed.

For patients

Over the last decades, European healthcare budgets have been increasing. Therefore, governments have implemented reference pricing, amongst other measures, in order to contain the pharmaceutical budget. In the reference pricing system, a common reimbursement level is set for a group of comparable and interchangeable medicines. The difference between this reimbursement level and the actual price of the medicine is paid by the patient, a so-called co-payment. This provides patients with a financial incentive to opt for the least expensive medicine. Reference pricing seems to reduce prices of medicines, increases the use of cheaper medicines, i.e. without co-payment, generates savings for healthcare budgets in the short term and does not seem to have a negative influence on the health of patients.

Competing interests: Professor Steven Simoens holds the EGA Chair ‘European policy towards generic medicines’. The authors have no conflicts of interest that are directly relevant to the content of this manuscript. This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Provenance and peer review: Commissioned; externally peer reviewed.

The paper is abstracted based on the presentation at the 24th Annual EuroMeeting, Drug Information Association, 28 March 2012, Copenhagen, Denmark.

Co-authors

Professor Steven Simoens, MSc, PhD, Research Centre for Pharmaceutical Care and Pharmacoeconomics, Katholieke Universiteit Leuven, Onderwijs en Navorsing 2, PO Box 521, 49 Herestraat, BE-3000 Leuven, Belgium

Professor Arnold G Vulto, PharmD, PhD, Deputy Head Hospital Pharmacy, Professor of Hospital Pharmacy and Practical Therapeutics, Erasmus University Medical Center, PO Box 2040, NL-3000 CA Rotterdam, The Netherlands

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16. Ubeda A, Cardo E, Sellés N, Broseta R, Trillo JL, Fernández-Llimós F. Antidepressant utilization in primary care in a Spanish region. Impact of generic and reference-based pricing policy (2000–2004). Soc Psychiatry Psychiatr Epidemiol. 2007;42(3):181-8.
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19. Galizzi MM, Ghislandi S, Miraldo M. Effects of reference pricing in pharmaceutical markets: a review. Pharmacoeconomics. 2011;29(1):17-33.
20. Garuolienè K, Godman B, Gulbinovic J, Wettermark B, Haycox A. European countries with small populations can obtain low prices for drugs: Lithuania as a case history. Expert Rev Pharmacoecon Outcomes Res. 2011;11(3):343-9.
21. Puig-Junoy J. Impact of European pharmaceutical price regulation on generic price competition: a review. Pharmacoeconomics. 2010;28(8):649-63.
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Author for correspondence: Pieter Dylst, PharmD, Research Centre for Pharmaceutical Care and Pharmacoeconomics, Katholieke Universiteit Leuven, Onderwijs en Navorsing 2, PO Box 521, 49 Herestraat, BE-3000 Leuven, Belgium

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Saving money in the European healthcare systems with biosimilars

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Introduction: The use of biotechnological manufactured drugs, or biologicals, has increased massively over the past few years. Used especially in the treatment of cancer and other severe diseases, biologicals incur high annual therapy costs and represent an additional burden for healthcare systems. Expenditure can be decreased by using cheaper biosimilars, produced following the patent expiration of the reference product. Here we present a model calculation that demonstrates the potential savings from using biosimilars for erythropoietins, granulocyte colony-stimulating factors, and monoclonal antibodies in EU national markets between 2007 and 2020.
Methods: Using a sequential approach, we calculated the savings through the use of biosimilars for France, Germany, Italy, Poland, Romania, Spain, Sweden and UK. First, either a ‘top-down’ or a ‘bottom-up’ approach was chosen to forecast the expected quantity of consumed drugs. We then calculated average reimbursement prices using additional information about the healthcare systems in each country. Finally, we estimated the potential savings for the above molecule groups using developed country specific scenarios.
Results: The use of biosimilars is expected to result in overall savings between Euros 11.8 billion and Euros 33.4 billion between 2007 and 2020, with largest savings expected for France, Germany and UK. Biosimilar monoclonal antibodies are expected to produce the greatest savings ranging from Euros 1.8 billion to Euros 20.4 billion. Biosimilar erythropoietins are expected to provide savings of between Euros 9.4 billion and Euros 11.2 billion, while granulocyte colony-stimulating factors could produce savings of between Euros 0.7 billion to Euros 1.8 billion.
Conclusion: The increasing use of biosimilars is a valid option for decreasing healthcare expenditure on biological drugs.

Submitted: 29 June 2012; Revised: 27 September 2012; Accepted: 9 October 2012; Published online first: 11 October 2012

Introduction and literature overview

In recent years, the use of biotechnology-derived medicines has increased considerably. These substances, which are generally made using bacteria or cell cultures, are used for a variety of indications, such as anaemia in kidney disease, rheumatoid arthritis and other systemic diseases as well as cancer [1].

The development of biological products is associated with high costs [2, 3]. This, together with the increase in the use of biotechnology-derived medicines, results in high annual treatment costs. In 2008, sales of biopharmaceutical medicines in Europe reached Euros 60 billion [4]. In 2009, sales in the US amounted to almost US$70 billion (around Euros 52 billion) [5]. The considerable cost of biologicals places an additional burden on healthcare systems, forcing cost-cutting measures in other areas of healthcare delivery.

A possible way to reduce spending on biologicals is the use of biosimilars, which can be developed and marketed after the expiration of patents of innovator products. However, due to variations in the manufacturing process, biosimilars differ significantly from chemically manufactured synthetic generic drugs. Whereas traditional generics are pharmacological copies of the original product in terms of qualitative and quantitative composition, biosimilars are produced by synthesis in live cells. As a result, a biosimilar will not have exactly the same composition as the reference product, even if its pharmacological mechanism of action is the same. Consequently, the regulatory requirements for biosimilars are different to those for generics. In Europe, EMA defines biosimilars as biological medicinal products with a mechanism of action similar to already approved biological medicinal products [6].

With regard to their potential for cost savings, the substitution of biosimilars for biologicals is likely to yield lower savings compared to generics, owing to higher development costs. While the price difference between generics and originator drugs may be up to 80% [7, 8], the difference between biosimilars and their reference biologicals is only between 15 and 30% [9–12]. Despite this smaller price difference, it is estimated that a price reduction of just 20% for the five most popular patent-free biologicals could result in annual savings of Euros 1.6 billion across Europe [13]. The use of biosimilars can thus help to reduce healthcare expenditures.

The goal of this paper is to show to what extent biosimilars can make a contribution towards reducing healthcare expenditure in European countries through the increasing use of biosimilars rather than reference biologicals over the long term.

Developing a forecast model with various market determinates, we have created different scenarios to show the potential savings from substituting reference biologicals with biosimilars in eight EU countries (France, Germany, Italy, Poland, Romania, Spain, Sweden, and UK) from 2007 to 2020. We restricted our study to three classes of biologicals: Erythropoietin (EPO) and granulocyte colony-stimulating factors (G-CSF), for which biosimilars are already available, and monoclonal antibodies (MABs).

A summary of the included substances can be found in Table 1.

Table 1: Overview of active ingredients in the class of active ingredients G-CSF, MABs and EPO

Data

The analysis is based on quarterly data provided by IMS Health for the eight EU countries (France, Germany, Italy, Poland, Romania, Spain, Sweden, and UK). We selected these countries according to their economic force and their population size: France, Germany, Italy, Spain and UK represent the five biggest EU markets; Sweden is the largest Scandinavian market, while Poland and Romania are the two largest Eastern European markets, based on population size.

Data analysis included the average selling price per standard unit (in US dollars), total sales (in US dollars) and the total quantity (in standard units) of substances in all marketed products per quarter, between first quarter 2007 and third quarter 2010. In addition, information on strength, pharmaceutical form and the name of the manufacturer were used to convert the number of standard units per product to defined daily doses (DDD) per product1.

The total volume for all manufacturers represented the quantity of all administered DDDs per country. After converting the selling price per standard unit to the selling price per pack, we calculated the reimbursement price (for details see section study design, structure and methodology). We used the concept of sales per DDD [14], where the reimbursement prices of all producers per substances and packages were divided by the daily doses per package. We were then able to calculate the expenditure and market-share weighted prices at substance level in combination with the daily doses per package. The EPO group was treated as a single substance. For EPO and filgrastim, we performed separate calculations for reference products (including parallel imports) versus biosimilars.

Study design, structure and methodology

We used a multi-step process to estimate the cost savings of using biosimilars in the eight EU countries through the different scenarios shown in Figure 1. The individual steps are set out below.

Estimation of expected drug consumption

The first step was to estimate the development in future consumption of each substance in each country in DDD until the year 2020 through two approaches.

The first ‘top-down’ approach involved estimating the theoretical medical requirement for the respective country using existing epidemiological literature. We estimated the prevalence, incidence and increase in incidence of individual substances. Our main references were Haberland et al. [15] and the ERA-EDTA Registry Annual Report 2008 [16] for the EPO group, Gratwohl et al. [17] and data of the WHO European Cancer Observatory for the G-CSF group, and Haberland et al. [15], and the WHO European Cancer Observatory for the MABs group, although the latter were more complicated to estimate due to the greater variety of diseases involved (different cancer types or, in the case of TNF-inhibitors, rheumatoid arthritis).

In the second ‘bottom-up’, approach, we updated the current volume development using growth rates over the observed time period. We assumed a slowdown in growth rate compared to the previous period in order to extrapolate the current drug consumption until the year 2020.

We generally preferred the ‘top-down’ approach for its epidemiological basis, but used the ‘bottom-up’ approach for those substances and countries where observed medicine consumption deviated considerably from the consumption modelled by the ‘top-down’ approach. For example, the ‘top-down’ approach underestimates the real consumption figures if the relevant substance is also heavily used outside its primary indication, where no epidemiological data are available. In contrast, there is an overestimation if the prescribing behaviour deviates (whether for medical or economic reasons) from the treatment approach expected ‘in line with the guidelines’.

The decision over which approach to use was based on expert assessments, the healthcare market environment of the relevant European countries, and discussions with national experts, see Figure 1.

Modelling of reimbursement prices

The average reimbursement prices for the individual substances were modelled using the manufacturers’ selling prices for biological products (data from IMS Health). In addition, we obtained information on reimbursement prices in each healthcare system through literature research and interviews. We calculated the official gross list prices according to manufacturers’ prices as well as country specific regulations on surcharges for wholesalers and pharmacists and additional taxes. We also considered out-of-pocket payments, regulations on reimbursement restrictions, reductions (either in form of percentile discount or fix reimbursement prices) and price negotiations at hospital level. The reimbursement prices for outpatient and inpatient treatment were calculated separately, with a weighted average price per substance provided by national experts for each country. We applied restrictions in the modelling process: first, we only included regulations that were valid throughout each country; second, we based the calculation of prices in the UK on the regulations for England.

Cost estimates for biological drugs from 2007–2020

Next, the expected cost for the reference biological drugs in the absence of biosimilars was calculated for each substance and country until the year 2020. This represents the baseline scenario for the case that biosimilars would not enter the market. We then multiplied, for each substance, the expected medicine consumption and the modelled average reimbursement price for the reference biological drug. For the EPO class of substances, and for G-CSF group substance filgrastim, for which biosimilars have been available on the European markets since 2007, we left the prices as they were prior to market approval of biosimilars.

Development of scenarios for calculating potential savings through the market entry of biosimilars

In order to calculate potential savings with biosimilars, we developed country-specific scenarios for the market progression of each substance after biosimilars enter the market.

Different assumptions were made for the development of market shares (I) and the average reimbursement prices (II), of both the reference biological drugs as well as the respective biosimilars. We also developed possible scenarios for market entry of biosimilars once patent protection of the reference biologicals expires (III), see Table 2.

Table 2: Parameter of scenarios

Expected development of market shares of biosimilars and reference biologicals

The current development of market shares (I) for the reference biological drug and its corresponding biosimilars were not available for all included substances. In fact, monitoring the development of the market shares of biosimilars over a longer period of time was only possible for the EPO drug class. We therefore had to find a proxy for the possible development of market shares.

We based our scenarios for the development of market shares on the observed market development for selected generic drugs in the outpatient market of the German statutory health insurance scheme (GKV) between 1998 and 2010, see the German report on medical prescribing practices (Arzneiverordnungsreport) for the years 1999 to 2011 [18].

An average was established for specific generic substance markets with slow and/or fast market penetration through generic drugs over a period of ten years2. This provided the baseline for the two scenarios ‘slow growth’ and ‘fast growth’. ‘EPO’, a third, medium scenario, follows the market share development for EPO biosimilars in the outpatient EPO drug market of the GKV.

Expected development of prices for biosimilars and reference biologicals

The different variations for the development of the average reimbursement price (II) for each substance were developed in a two-step process.

First, the observable country-specific development for the EPO class of biosimilars and for filgrastim was used to create three variations in price development for both the reference biologicals and biosimilars. These include the highest, lowest, and average price reduction of reference biologicals and biosimilars for the three years following patent expiry of the relevant biologicals, a situation that is expected to occur following patent expiry. In the first step, we made no assumptions for the price development of EPO and filgrastim, as the real price developments for biosimilars were observable. For the later price developments we chose another approach as further data for the price development of EPO drug class and filgrastim biosimilars were not available due to their late market entry.

In the second step, we based the further price development of all scenarios on the results of the sector inquiry in the market for generic products by the European Commission [19]. These results indicate a slow decline in market prices for generic substances after two years. This price decline was applied to all scenarios starting from year four after market entry of biosimilars.

Expected time span until market entry of biosimilars

Our last parameter was the expected time span until the market entry of biosimilars for each substance. We chose two possible variants: first, we expect that biosimilars enter the market immediately after patent expiry, owing to observations on the markets for small molecules, where generic versions enter without delay after the loss of patent protection. Second, following the experiences on the German SHI (Statutory Health Insurance) market for biological substances, we assume that biosimilars enter the market after two years. Again, we made no assumptions for the market entry of EPO class drugs and filgrastim, as their biosimilars were already available in all eight selected countries. We therefore used real market data.

Using combinations of the variants of these three parameters for G-CSF and MABs we created 18 possible scenarios for estimating the possible savings through biosimilars. For EPO we only constructed six scenarios based on actual market data for entry of biosimilars.

Results of the scenarios

The estimated combined expenditures for all selected countries came to a total of Euros 229 billion between 2007 and 2020, assuming that biosimilars had neither entered the market nor were about to enter in the near future. This therefore represented the baseline from which each saving could be calculated. Table 3 shows the expected cumulative savings for the three investigated classes of biological substances.

Table 3: Cumulative savings with biosimilars in billion euros for G-CSF, MABs and EPO for 2007–2020, where biosimilars receive market approval two years (immediately) after the patent expires

By 2020, the expected savings for biosimilars are expected to range from Euros 11.8 billion to Euros 33.4 billion. This equals savings of 5.2% to 14.6% of the estimated expenditures in the selected countries. The values in Table 3 indicate that the development of market share, and time to market entry for biosimilars, have a huge impact on the level of savings.

While Table 3 states the level of cumulative savings for the eight EU markets, it misses the distribution of savings between countries, as well as the savings for each individual drug class. The first point is taken care of in Table 4, which shows the minimum and maximum potential cumulative savings for each country.

Table 4: Minimum and maximum cumulative savings with biosimilars in billion euros for G-CSF, MABs and EPO for 2007–2010 per eight EU markets

According to these results, the bulk of savings is expected to occur in France, Germany and the UK. For each of these markets, we expect cost savings through a switch to using biosimilars of at least Euros 2.3 billion. This is not surprising, since these countries also spend the most on biological drugs, with expenditures of more than Euros 44.6 billion expected for the period of 2007–2020 if biosimilars do not enter the markets. The lowest savings are expected for Sweden, due to the country’s market potential and regulations.

There are considerable differences between countries in both the overall savings and the results for each class of substances.

Regarding G-CSF, Table 5 shows that the expected cumulative savings will be between Euros 0.7 million and Euros 1.8 million. We therefore calculated savings of between 5.5% and 15.3%, based on the expected cost volume of Euros 12.0 billion for the two included substances filgrastim and pegfilgrastim. Because biosimilars for filgrastim have been available in the European market since 2008, we have used real rather than fictional reimbursement prices for filgrastim.

Table 5: Cumulative savings with biosimilars in billion euros for G-CSF for 2007–2010, where biosimilars for filgrastim receive market approval and the expected market approval for pegfilgrastim 2017 (2015)

Table 6 shows expected savings from the market entry of biosimilars for monoclonal antibodies of between Euros 1.8 billion and Euros 20.4 billion. With an expected cost volume of Euros 173.3 billion, this means savings of just 1.0% to 11.8%. However, the patent for many substances in this drug class will only expire after the time period investigated for this study. An exception is etanercept, where the first biosimilars could already enter the market by 2012 or 2013, with expected savings of 3.8% to 20.8% based on an expected cost volume of Euros 21 billion. Instead, for other top-selling substances such as rituximab and bevacizumab, it will take until 2020 to achieve significant savings, if biosimilars will enter the market immediately after the patent has expired.

Table 6: Cumulative savings with biosimilars in billion euros for the MABs for 2007–2010, where biosimilars receive market approval within two years (immediately) after the patent expires

For the EPO drug class, the calculations for savings deviate from the previous methodology, as biosimilars had already received market approval in Europe between 2007 and 2009. Consequently, we were able to use actual post-marketing market share trends. As Table 7 shows, cumulative savings between Euros 9.4 billion and Euros 11.2 billion are expected – subject to the expected market share trend for EPO. The expected savings for the period between 2007 and 2020 will amount to 21.4% to 25.5%, based on expected costs of Euros 43.8 billion without the market entry of biosimilars (baseline scenario).

Table 7: Cumulative savings with biosimilars in billion euros for EPO for 2007–2020

Discussion

Our results show considerable potential savings through the use of biosimilars for the investigated classes of biological drugs. We estimate savings of between Euros 11.8 and 33.4 billion, the bulk of which are likely to occur in the national biologicals markets of France, Germany and UK.

With regards to the singular drug classes, the largest potential savings are expected for EPO (between Euros 9.4 and 11.2 billion) and MABs (between Euros 1.8 and Euros 20.4 billion). For the latter, biosimilars for etanercept, rituximab and trastuzumab could save up to Euros 11.3 billion or 14.9% of total expenditure.

The selected scenarios show that especially the immediate availability of biosimilars after the patent expiry of the reference biological drug leads to much higher savings compared to a market entry of biosimilars two years past expiry.

Beside the importance of an immediate market penetration of biosimilars, the associated decline in average price also influences the extent of savings. The effect on the average price due to biosimilars is twofold. First, the average reimbursement price for a substance declines due to cheaper biosimilars. Second, the reference biological drugs also decrease in price. Both effects lead to savings, but the manufacturers of biosimilars do not benefit.

The complexity of the model means that certain limitations must be taken into account when interpreting the results. It was not possible, for example, to consider all current discounts when calculating country-specific reimbursement prices, particularly regional and patient group-specific discounts. For this reason, we frequently employed averages or assumptions based on expert assessments. The complexity of patent laws also means that the expiry of patents for pharmaceutical products is not always straightforward. And for the regulations in the different health systems we assumed a status quo, and could only take future regulatory changes into consideration where they were already announced during the reference period.

The use of generic drug data concerning the development of market shares of biosimilars has to be viewed critically. The future development of biosimilar markets will show if market shares similar to the more optimistic parameter variants ‘fast growth’ are possible.

Conclusion

Our results lead us to make several recommendations for policy makers and regulators. A key difference compared to the markets of small molecule substances is that automatic substitution is not allowed in any EU country. While there are understandable reservations among physicians about the automatic substitution of reference biologicals with biosimilars, a more flexible approach for substitution seems necessary. There are two possible ways to change this situation.

First, the realisation and publication of more head-to-head studies of reference biological drugs and corresponding biosimilars could help to lessen the concerns of physicians. In this context, it also seems important that physicians are informed about the results of these studies. Therefore guidelines or recommendations from Federal Health Institutes and specialist physician associations could be an appropriate way to increase knowledge about the potential benefits of biosimilar substitution.

Second, strict regulations on biosimilar exchange quotas could be used to make the use of biosimilars mandatory. However, this ‘brute-force’ approach would be as a last resort only as protests by physicians seems very likely.

For patients

Biological drugs differ from small molecules drugs in relation to their manufacturing process. Instead of being the result of a chemical product process, biologicals are manufactured using genetically modified organisms. Following patent expiry a biological drug can be produced by other companies. These so-called biosimilars inherit similar quality, safety and efficacy to the original biological drug at a lower price level. Therefore, biosimilars can be used to reduce the expenditures for biological drugs in healthcare systems.

Conflict of interest: This report was prepared with the financial support of Sandoz Pharmaceuticals GmbH.

Provenance and peer review: Commissioned; externally peer reviewed.

Co-authors

Christoph de Millas
Ariane Höer, MD
Professor Bertram Häussler, MD
IGES Institut GmbH, 180 Friedrichstraße, DE-10117 Berlin, Germany, www.iges.de

NOTES
1The defined daily dose (DDD) refers to the assumed average quantity of a substance that can be expected for the treatment of a certain condition. The DDD is a unit of measurement for the substances contained in a product and should not be confused with the therapeutic or recommended dose. The DDD was developed, and is maintained by, the World Health Organization (WHO), and adapted for Germany by the Wissenschaftliche Institut der AOK (WIdO).
2Considered generic substance for ‘slow growth’: cyclosporin; considered generic substances for ‘fast growth’: zopiclone, felodipine, ciprofloxacin, paroxetine citalopram, cetirizine, ramipril, simvastatin, lovastatin, gabapentin.

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Author for correspondence: Robert Haustein, IGES Institut GmbH, 180 Friedrichstraße, DE-10117 Berlin, Germany

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