Biological medicines represent a major advance in the treatment of serious pathological conditions such as cancer, neurodegenerative and autoimmune diseases, in the form of biosimilars.
As these therapeutics become trusted and more widely used by clinicians, we can expect a larger number of new biosimilars coming onto the market as the patents and market exclusivity linked to innovator products expire.
By 2019, more than 14 innovative biological products had lost their orphan designation market exclusivity, and by 2029 another 34 innovative biological products will join them. By 2023, patents will expire for most formulations, creating a large potential market for biosimilars.
While biological drugs are the originators of new treatments, such products are costly to develop and to procure. A newly developed molecule can be in the development phase for ten to 15 years and can incur over 1 billion euros or dollars in R&D cost.
Once that formula’s patent and market exclusivity expires, competing manufacturers can bring a biosimilar to market at a fraction of the price, enabling cheaper procurement options for governments and potentially giving patients much wider and more affordable access to treatments.
These products might take 30-50% less time to develop, and cost up to 70% less than their biologic originals – savings that can be passed on to healthcare providers and patients. By the end of 2020, it was estimated that biosimilars had saved the EU up to $44bn in healthcare costs.
Shift to large molecules
Biosimilar treatments offer similar benefits for the healthcare system as generic drugs, although they cannot be compared. Generics are small-molecule formulations identical to the innovative product, while a biosimilar can only aim to be highly similar to the innovative product.
However, both generic and biosimilar products will be expected to have the same clinical effect as the respective innovative product.
As biologics are very important in the treatment of oncological, rheumatological, endocrinological and other rare diseases, increasing numbers of manufacturers are moving from small-molecule developments to the more complex process of developing larger molecules.
Although not biologically identical, biosimilars are ‘highly similar’ to the original/reference product/innovator (think identical twins, but each with their own unique fingerprints). This means that when companies are going through regulatory assessments they can re-use information developed by the original innovator company.
It’s because of this that the development of the biosimilar can be several years faster: an enhanced comparative quality study is recommended, rather than extensive clinical and non-clinical studies, to support product registration.
For orphan designations (medicine for rare diseases), biosimilars offer speed to market with cost-effective medicines and give more patients affordable access to the treatments they need. This is not only due to the lower cost of development
of biosimilars versus biological innovator originals, but also to increased market competition and the emerging regional or country policies designed to attract more biosimilar treatment alternatives.
Most biosimilar products are introduced into markets through tenders. We have seen discounts of 85% in Norway and 45% in France, following local negotiations. The increased competition also forces originator/biologic manufacturers and sellers to reduce the pricing of their innovative products, further adding to the affordability of important treatments.
Our assessment of the available market information revealed that, in 2019, an average ratio of 3.5 market concentration for biosimilars per originator was achieved in Europe.
After the introduction of biosimilars in Portugal for erythropoietin (EPO), a hormone produced by the kidneys to stimulate production and maintenance of crucial red blood cells, the originator product was reduced in price by more than 60%. The price per treatment per day was reduced by an average of 30%.
The low risks of interchangeability
Interest in biosimilars is strong, and as understanding grows and trust builds around this alternative route to medicines access, that interest continues to grow. Initially, there were some concerns about the safety of any interchangeability in the treatment between biosimilar and originator and vice versa, or between two biosimilars.
These concerns were that biosimilars are not exact equivalents of reference drugs, the drugs may not come in the same pharmaceutical dosages as the originator, and that testing can reveal insignificant clinical differences. But with multiple studies demonstrating the low risks of interchangeability, and authorities increasingly supporting such studies, those inhibitors have lessened.
Agreement among the various authorities about how to handle biosimilars will also help. There are more than 70 biosimilars registered in the EU, with others are under evaluation, thanks to the efforts of the European Medicines Agency (EMA) to continuously improve guidelines and provide appropriate support to bring these products to market.
In addition, national drug authorities across Europe, as well as the Heads of Medicines Agencies (CMDh), have been making similar efforts to provide access to biosimilars.
There is still some way to go, however. Currently there isn’t a harmonised approach in Europe towards interchangeability. Rather, each member state’s national medicine authority can decide this on a case-by-case basis.
Acceptance of biosimilars in Europe
It is important that payers, providers and patients understand the benefits of having such medicines available on the market and, encouragingly, most European countries have now succeeded in achieving widespread acceptance of biosimilars by all parties.
In the Nordic countries, biosimilars are being introduced very rapidly, which has led to the impressive price competition mentioned above and wide-scale patient access to important treatments.
Other governments have introduced initiatives to increase biosimilar availability in the market. In France, where patient associations have an influence in policy creation, there is a plan to improve availability by 80%. In addition, Belgium, Germany and Sweden have all introduced government policies to provide incentives for manufacturers, hospitals and patients.
Further examples of the diverse policies across Europe include Germany’s reimbursement programme, which offers full reimbursement from day one, at a set price, ensuring immediate access to biosimilars. Here, local clinical guidelines are being developed to encourage biosimilar use as the first choice, as appropriate.
In Sweden, multiple tenders are being organised per region to encourage multiple manufacturers to operate in the market, thereby increasing competition and maximising patient access to affordable treatments.
Challenges ahead
All this creates a potentially complex picture. With so many factors differing from one market to the next, there are a lot of pieces to fit together once biosimilarity is demonstrated and products are authorised.
Companies may need some help navigating the differences, as the balance achieved by good policies can be easily destabilised by measures ranging from exclusive tenders (which can negatively impact biosimilar sustainability and
lead to supply shortages), to fixed reimbursements pricing (which can destabilise competitive markets and discourage manufacturers’ participation).
There are also many countries that don’t yet have an incentives policy, or have not yet fully implemented the policies they have been developing. In some countries, policies are ensuring that market volumes are guaranteed; in others there is no such guarantee so, after price readjustment, market volumes are lost.
Other challenges are linked to education. Education around biosimilars is badly needed, not only for healthcare professionals (HCPs) but also for patients, decisionmakers, and perhaps also the media – not just about the differences and relative benefits between biologics and biosimilars, but also how such products come into use and how they are administered or self-administrated, as medicine develops together with technology.
This education is vital to help build trust, and to support interchangeability in treatment, where applicable. Without this confidence in substituting original treatments with new biosimilars, HCPs will continue to recommend the reference product, which will stifle competition and lead to price increases over time, a phenomenon seen also in generics over time.
Patients first
For medicine manufacturers, the ability to develop and roll out the right products at the right price and in sufficient volumes to keep pace with market demand and fulfil patients’ needs is paramount. Europe is a great place to get this right, as the authorities here have the most advanced understanding and emerging policies.
The US Food and Drug Administration (FDA) is catching up quickly too, presenting a huge expansion opportunity. The US market also has a lot of interest in creating cohesive guidelines and legislation around biosimilars interchangeability, something that is still lacking from the EMA. Japan is also taking a proactive interest in the field.
The hope is that respective national and regional regulators will choose to increasingly share best practice rather than reinvent the wheel for their own market.
The life sciences sector needs governments to introduce attractive policies and incentives that will encourage manufacturers to invest in development and commercialisation of biosimilars, to ensure competitive and sustainable supply and affordable pricing.
The potential for biosimilars to transform patient access to the latest treatments continues to grow. Biosimilars present an exciting opportunity to bring important treatments to market more affordably and in higher volumes, putting the needs of patients first. As more biological products lose their exclusivity, there is likely to be a race to bring biosimilars to market and companies that hold back could lose significant ground.