Identifying Key Benefits in European Off-Patent Biologics and Biosimilar Markets: It is Not Only About Price!

Biologics are being used in the treatment of the most serious, life-threatening, and chronic diseases such as cancers [1], immune-mediated inflammatory conditions [2], diabetes mellitus [3], and fertility [4] and are likely to be of use in treating other diseases in the future. However, the clinical benefits of biologic therapy are offset by challenges related to affordability of and accessibility to biologic medicines [5].

Biosimilars are highly similar and clinically equivalent forms of originator biologics. Development of biosimilars is complex because biologics are large and complex molecules derived from living cells by a complex manufacturing process. However, once assessed and licensed by an advanced regulatory agency, no meaningful difference between originator biologics and biosimilars is expected with respect to quality, safety and efficacy [5, 6]. Biosimilars are marketed following expiration of patent and exclusivities of the originator biologics. These medicines are generally less costly than the originator biologics, which may be due to an abbreviated clinical trial program, and possibly also to a more advanced and efficient production process [7‐10].

By 2018, 34 biologics have become off-patent and 15 more biologics are expected to reach the patent cliff in the next 5 years in Europe [11, 12]. Hence, there is an opportunity for market access to biosimilars. As of May 2019, 59 biosimilars have been approved in Europe, six authorizations have been withdrawn after approval, and there are six applications under evaluation for marketing approval [13]. These include growth factors (epoetins, filgrastim), hormones (follitropin-α, insulin glargine, somatropin, teriparatide), monoclonal antibodies and fusion proteins (adalimumab, infliximab, rituximab, etanercept), and low-molecular weight heparins (enoxaparin sodium).

European countries have implemented a variety of incentives and policies to promote market access and uptake of biosimilars. The principle reason behind this favorable market environment is that countries wish to capture the savings arising from the lower price of biosimilars in an era of restricted healthcare budgets, an increase in the burden of life-threatening diseases, early detection of these diseases, and an increase in the ageing population. Biosimilars are at least 15–45% less expensive than the originator biologics [14], although prices of biosimilars vary across European countries [15]. However, price evolution of off-patent biologics and biosimilars is rapid across European countries and discounts on selected biosimilars can reach up to 80% [16]. Cumulative savings due to competition between originator biologics and biosimilars on eight key products (adalimumab, insulin glargine, etanercept, infliximab, rituximab, pegfilgrastim, trastuzumab, follitropin-α) are expected to reach €98 billion by 2020 in the EU group of 5 (G5: Germany, France, Italy, Spain, and UK) and the USA [17]. In Europe, the Top-10 biologics sales are €16.5 billion based on 2017 sales figures [18]. Most of these biologics are off-patent in Europe and biosimilars to these biologics are available for clinical use. Assuming that the discount on off-patent biologics and biosimilars will be at least 50%, annual savings could be as large as €8–10 billion by 2020.

The key driver for uptake of biosimilars is cost reduction relative to the originator biologics; however, in this paper we argue that there are other associated benefits stemming from this key driver. Some of these value propositions of biosimilars have already been outlined in a recent opinion paper [19]; however, it did not describe all the benefits of biosimilars supported by empirical evidence. The aim of this study is to provide an in-depth and structured review of the key driver and associated benefits of off-patent biologics and biosimilars and to illustrate these benefits with empirical data from Europe. Based on these results, a broader view is presented to policy and decision makers, the pharmaceutical industry, and other stakeholders of different benefits of off-patent biologics and biosimilars, thereby supporting their optimal use in society.

A comprehensive literature search was performed for a narrative review on the benefits of off-patent originator biologics and biosimilars, and of competition in the off-patent biologics and biosimilars market. MEDLINE and EMBASE were searched for studies published between January 2005 and November 2018, which encompassed the period during which biosimilars were first approved for use and launched in Europe [20]. Search terms were built on the concept of cost savings, economic evaluation, and other benefits of off-patent biologics and biosimilars beyond cost savings from payer, physician, patient, and market viewpoints. The search strings consisted of Medical Subject Heading (MeSH) and text terms for “biosimilar”, “reference, originator and off-patent medicines” and text terms for “value”, “lower price”, “price competition”, “supply chain benefit”, “access to treatment”, “competition”, “awarding reimbursement”, “extending reimbursement”, “earlier line of treatment”, “wrap around services”, “economic evaluation”, “off-patent biologics”, “cost effectiveness”, and “second generation reference product”. The PubMed MeSH terms were appropriately modified in accordance with the EMBASE database. Given a paucity of published literature on benefits of off-patent biologics and biosimilars as this is an emerging field of research, the bibliographic reference lists of eligible studies were also searched for other relevant sources such as the Generics and Biosimilar Initiative Journal (GaBI), which is not indexed in PubMed or EMBASE, and gray literature such as consultancy reports (IQVIA) and websites for the UK National Health Service (NHS), National Institute for Health and Care Excellence (NICE), and European Medicines Agency (EMA). Articles were selected for inclusion if they reported empirical data on benefits in the off-patent biologics and biosimilars markets in European countries. The search results from each database were limited to published references in the English language. Articles that reported on pharmaceutical or clinical aspects of off-patent biologics and biosimilars (such as bio-equivalence, immunogenicity, pharmacokinetics, or pharmacodynamic modelling) were excluded as such articles fell outside the scope of our literature review. A broad overview of the search strategy is schematically presented in Fig. 1.

Figure 2 schematically presents different benefits of off-patent biologics and biosimilars for several stakeholders. This section defines and distinguishes between these benefits, and includes an aggregate report on a number of empirical studies illustrating each benefit in the European setting. The price of biosimilars in these studies are the ex-manufacturing price or an average price weighted cost across EU G5 countries (France, Germany, Italy, Spain, and the UK). Results of empirical studies are outlined in Table 1.

Although the impetus for biosimilars development has been largely a reduction in the cost of biologics, there are other benefits emerging from the main argument of cost saving, which have been illustrated in this narrative review and supported by empirical data within Europe such as cost savings related to the use of biosimilars could be reallocated to increase access to biologic therapy for patients who could not previously be treated, the biologic therapy could be moved to an earlier line of treatment, demand would be reallocated within a broader class of medicines, and there could be an increase in the number of healthcare staff. The benefits arising from the cost containment have different impacts on various healthcare stakeholders and are schematically represented in Fig. 2. These benefits are inter-related; for example, improving the cost effectiveness of the biotherapeutic treatment may move therapy to an earlier line of treatment, widening patient access and thus resulting in a better health outcome for more patients. Cost savings by the use of lower-priced off-patent biologics and biosimilars could be reallocated to increase patient access to innovative therapies, thus fostering headroom for innovations and supporting holistic benefit of biotherapeutics. Hence, benefits associated with the use of off-patent medicines and biosimilars are integrated and not additive.

Competition between off-patent biologics and biosimilars stimulates incremental innovation by pharmaceutical companies. However, incremental innovation by the originator manufacturing company could also be related to a strategic pricing policy put in place by the manufacturing company for the originator medicine before the launch of biosimilars, and developing next-generation products with better formulations and other add-on features could be a defense mechanism to save the market share of the originator medicines. These innovations may not be clinically superior to the biosimilar or originator [40].

Our study has illustrated the key benefits in the European off-patent biologics and biosimilars market with practical examples as derived from budget impact analyses, economic evaluations, and other studies. The shortcomings of these studies, such as a limited range of cost parameters, assumptions used to populate the budget impact model regarding hypothetical drug pricing and biosimilars uptake, the limited range of sensitivity analysis, lack of local adaptation and validation of economic studies, have been analyzed in the literature [5] and fell outside the scope of this study. The value of biosimilars may also be different across various regions of Europe. For Central and Eastern European countries, access to the originator biologics and biosimilars is a major challenge, whereas in Western European countries, the high price of these medicines is a major issue, which poses a financial burden to the healthcare system. Empirical studies illustrating benefits of biosimilars (Table 1) are based on hypothetical or descriptive studies from one or a few countries. The results cannot be generalized on the same parameters across all European countries.

The reimbursement system is different in each country and patients’ access to the biologic treatments may still be challenging, especially if there is a co-payment or limited insurance coverage for these novel therapies. As a result, patients are less likely to have access to these expensive biologic treatments [43, 44]. The purchasing price of off-patent originators and biosimilars, which is regulated by the national authority, can also vary in different European countries, and within the same country prices may also be different if dispensed via ambulatory care or a retailer [15]. Additionally, there could be other factors such as a negotiated price between the manufacturers and hospitals, local tenders, existing contractual arrangements, and the price sensitivity of payers for biosimilars. Sometimes the price of the off-patent originator may also be lower than that of biosimilars. Moreover, healthcare resources in Central and Eastern European countries are lower than in Western European countries [44]. An increase in patient access to pharmacological treatment is, therefore, likely to be a more relevant benefit in Central and Eastern European countries, where equity of access to the treatment is more of an issue than in other European countries. The current body of evidence illustrated in Table 1 is derived from hypothetical and descriptive studies in specific countries, thus inhibiting the generalizability of results. Due to the heterogeneity of the reimbursement systems and biosimilar policies between countries, benefits of off-patent biologics and biosimilars markets observed in one country cannot be extrapolated to another country. Therefore, there is a need to investigate and conduct a comparative analysis of benefits in off-patent originator biologics and biosimilars markets at a national, regional, and local level. Reimbursement assistance and innovative financial agreements may add to the overall benefits of the biologic therapy. Additionally, access to these biologic medicines can be improved by including them in the list of World Health Organization (WHO) essential medicines, based on their cost and clinical effectiveness data. This could be a supportive argument for off-patent originator biologics and biosimilars being included in the national reimbursement lists of many countries. Furthermore, in an integrated health system, gain-sharing arrangements may be a potential solution to distributing cost savings from biosimilars, such as increasing the number of specialized nurses and support staff for a high-quality, cost-effective patient service, resulting in a favorable patient outcome [37]. These initiatives could also promote team-based approaches for a continuous process improvement in hospital settings.

Our literature search included benefits of the off-patent originator biologics and biosimilars market for which European empirical data were available. Although additional drivers such as innovation in manufacturing technology, new branding, and marketing strategies exist, we did not find publicly available empirical data supporting these benefits.

Although our study has focused on those factors that contribute to the benefit of competition in the off-patent biologics and biosimilars markets, other factors exist that undermine the attainment of benefits in this market. For instance, there has been a low uptake of biosimilars due to lack of confidence among physicians prescribing these medicines [45] and a ‘nocebo’ effect experienced by patients when switching originator medicines to biosimilars [46] in which patients anticipate negative consequences after switching to biosimilars from the originator biologic, which may lead to a negative implication on their health outcome. These barriers can be addressed by providing professional education with scientific evidence to prescribers, and implementing an awareness program regarding the use and potential benefits of biosimilars for patients and other healthcare professionals.

Future studies are required to analyze and illustrate other benefits of competition in the off-patent biologics and biosimilars markets, such as a robust supply chain to avoid drug shortages, professional education for healthcare professionals, and patient care pathways. Also, empirical research illustrating the various benefits of off-patent biologic medicines and biosimilars needs to move away from hypothetical studies to evidence generated from real-world data.

In this article we have reviewed benefits offered by off-patent biologic medicines and biosimilars, beyond cost containment. These benefits may include improving patient access and affordability, moving biologic treatment to an earlier line of therapy, and provision of budget flexibility to fund novel therapies. Off-patent biologics and biosimilars may also create market competition and stimulate incremental innovation by the manufacturers. These benefits when executed in real-life scenarios could result in wider use of biologic treatments than the standard of care in inflammatory diseases and oncology.