Will the COVID-19 pandemic accelerate the adoption of biosimilars in Europe?
Welcome to Morbus & Curis, a blog about disease and healthcare. Today’s blog post is an opinion post about how COVID-19 could change attitudes or behaviours towards biosimilars as healthcare systems and government budgets are put under increasing financial strain in the wake of the pandemic.
After the 2007-09 financial crisis, healthcare policymakers and payers sought to improve the efficiency of healthcare systems.
A common strategy to drive efficiencies in pharmaceutical spending focused on increasing the adoption of generic medicines to minimise the budget impact of off-patent medicines.
Generic medicines are an obvious source of cost savings as they can allow one to obtain the same health outcomes at a lower cost. They are, after all, granted marketing authorisation by proving they produce the same levels of an active substance in the human body as the reference product, and adhere to the same quality standards.
Furthermore, at the time of the financial crisis, generic utilisation was low in some European countries, making increased generic utilisation a quick win for some payers.
Will the financial pressures and constraints left behind in the wake of the COVID-19 pandemic force payers to adopt similar tactics to drive the adoption of biosimilars?
Let’s explore.
Prior to the 2007-09 financial crisis, levels of generic adoption were varied across Europe. This was largely due to differences between generic utilisation policies and attitudes towards generic medicines.
For example, in the UK, where medical students are taught to prescribe by international non-proprietary names (INN) and market competition drives generic prices down, both generic penetration and cost savings were already high.
Conversely, in markets where prescribers had high levels of brand loyalty and both INN prescribing and pharmacy level substitution were not mandatory, generic utilisation rates were lower.
However, as healthcare spending budgets became tighter, many European payer attitudes shifted and their willingness to enforce the adoption of generic medicines increased.
In came new rules such as mandatory INN prescribing, automatic substitution, mandatory price discounts, competitive tendering, reference pricing systems and generic utilisation prescription targets….Then up went generic utilisation rates and cost savings.
Will we now see a similar pattern for biosimilars?
When second-generation biosimilars, such as infliximab, were introduced into the European market we saw that some European payers were willing to treat them like generics; they held tenders for exclusive supply and encouraged switching. Conversely, other European payers had a much more tentative approach and left the decision to switch a patient to a lower-cost biosimilar with the prescribing physician.
But now, more than 5 years since the first second-generation biosimilar launched, payers have more long term and real-world evidence demonstrating biosimilars’ comparable efficacy and safety to their reference biologics.
Could this increased confidence in biosimilars, matched with the financial strains resulting from the COVID-19 pandemic, be the catalyst payers need to become more willing to introduce stricter policies around biosimilar use?
Assuming clinical and real-world evidence continues to prove that there are no clinically meaningful differences between biosimilars and their reference product, then biosimilars are, like generics, an obvious source of cost savings and an easy way to improve the efficiency of healthcare resource utilisation - it’s simply encouraging the rational selection and use of medicines
Even before the COVID-19 pandemic, we saw European payer attitudes shifting in this direction. For example:
France has legalised automatic substitution from a reference product to its biosimilar for treatment naïve patients as well as treatment-initiated patients prescribed the same biosimilar.
In Poland, INN prescribing and automatic substitution is permitted for biologics since Polish law does not differentiate between generics and biosimilars
So if this is an obvious thing to expect, how might it come about?
There are multiple policies or tools that payers could utilise. These include:
Pharmacy level substitution. (E.g. at the pharmacy level, it could become mandatory to stock and substitute the lowest cost version of a biologic. However, if this is permitted, the brand or branded biosimilar dispensed to the patient will need to be tracked for pharmacovigilance reasons.)
Price controls. (E.g. mandatory fixed price discounts, which could apply to both the reference brand biologic and biosimilars.)
Cost-sharing policies. (E.g. policies that allow both the provider and payer to benefit from the savings attained by increased biosimilar prescribing, incentivising procurement and prescribing of the lowest cost version of a biologic.)
Tendering or procurement policies. (I.e. procurement policies that favour the lowest cost version of a biologic with proven capability to supply. Although these policies can achieve significant cost savings in the short-term they risk negatively impacted long term savings if they reduce the sustainability of competition.)
Reimbursement limits. (I.e. a fixed level of reimbursement that creates a financial disincentive to prescribe or dispense a biologic priced above that limit.)
Prescription budgets, quotas or treatment guidelines. (These could provide a target level of biosimilar prescribing that is linked to financial incentives or penalties for the prescribing physician or provider, based on adherence to the policy.)
How strict new policies are and whether they can be policed will depend on the infrastructure of a specific healthcare system. But as new technologies facilitate advancements such as e-prescribing, certain policies will become easier for payers to monitor and enforce.
While increasing the speed and degree of biosimilar adoption through procurement, pricing and substitution policies will help improve healthcare system efficiencies, it is but one piece of the puzzle - biosimilar adoption alone will not be enough to contain healthcare drug budgets across the continent, that have long been troubled by the rising costs of innovative medicines and ageing populations.
An area with potential for greater impact and future change following the pandemic will be Health Technology Assessments (HTAs). HTAs can allow payers to control the budget impact of high-cost innovative medicines and drive efficiencies through the restriction of low-value medicines and services, but that’s another topic for another day!
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