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The sound of silence puts the squeeze on generics and biosimilars

Medicines for Europe vows to get  governments talking to realise potential

Medicines for Europe

The future of generics and biosimilars is something to shout about but the sector fears the mute button has been pressed on progress.

A market worth £78bn is expected to open to competition by 2020 as big gun biologics fall off patent, but Adrian van den Hoven, director general of Medicines for Europe (pictured right), is uneasy at volume levels over talks to calibrate opportunities.

As the successful 23rd Medicines for Europe - formerly the European Generics Association - conference drew to a close in Lisbon in June, he was in a combative mood over prospects and perceived roadblocks.

More than 300 delegates had attended and debated sessions ranging from value-added medi-cines to emerging markets and were encouraged by the industry’s evolution into a powerhouse for cheaper medicines in Europe and around the world, where some nations are struggling to fund the basics.

“The industry is becoming more mature in its understanding of its role in public health,” he said as delegates filed away from the final session on Global Market Policies for Biosimilar Medicines. “It was a very positive conference but we are under a lot of pressure in terms of our prices and that is challenging for us.

Squeeze

“There are different pricing mechanisms but generally it is very difficult for generic prices to go up and, even in tender or free market systems, it is quite exceptional that prices go up. Increasingly, governments have mechanisms to ensure prices go down.

“We have been used to price erosion and competition and indeed our members compete with each other on price but that is usually in a context of volume growth so you balance the cuts and erosion with uptake.”

It is a familiar lament across industry that seems intractable given the shallows of public finances and the trend to squeeze pharmaceutical companies as a matter of course rather than by applied analysis.

His concern is not so much that governments have a cost-cutting DNA but that they don’t have enough information to help them cope with the contours of a shifting landscape. “Where we see the challenge is where government-mandated price cuts are imposed without discussion or compensation over volume and we have seen that in recent years in Portugal, France and Romania,” added van den Hoven.

“We are not getting clear signals from governments and the dialogue is not good. We have a good dialogue with the regulators but generally the regulators cannot get the payers into the room to discuss pricing, and if they do they can’t get the payers to do very much. There is a reluctance to bring the regulators, payers and manufacturers together, therefore you can’t hear out the different sides and try to settle things.”

The issues that need urgent discussion are sectors with 100% generic penetration, such as hospital injectables and oncology products where there is no growth, yet companies have to contend with rising production costs and price cuts, along with the perils of shortages from manufacturing blips.

“The difference is the regulator and manufacturer have a keen interest to stop shortages or mitigate them but, because the payers are not directly responsible and it doesn’t incur a cost for them, it is easy for them to say it is the fault of the manufacturers. I think we need to get the three actors together to discuss the sector. It has been attempted in Germany and the Netherlands and it was a good discussion with everyone having a series of actions but the payers have so far not implemented their changes. There is an opportunity and a need for health ministries to send out clear signals.”

Parking ticket

The frustration is crystallised in Spain where, he believes, generic and biosimilars take-up could rapidly increase from 46% to 76%.

“You can get a month’s supply of medications to treat three chronic conditions in one patient for the price of a parking ticket in Madrid yet generic penetration in Spain is completely flat,” he added. “Why is that? Why, when we are offering so much value, isn’t the Spanish government going all out, pulling every lever, to make this happen?

“We are offering that value in Spain but the government is doing nothing to improve generic uptake - that is where I have a problem.”

Van den Hoven’s concern cranks up at the apparent lethargy to create a framework for biosimilars that are expected to have a dam-bursting surge into the market as major drugs - from Adalimumab to Rituximab - go off-patent and boost savings across eight European nations to €33.4bn over the next three years.

“We need governments to engage and drive competition. We have the evidence that people are facing restrictive access to some of these medicines and we know that when a biosimilar takes 70% of the market, the usage goes way up and way more people get treated.

“What is surprising is that the whole of Europe is deeply concerned about the price of new medicines and how it can afford oncology drugs, innovative and orphan drugs, yet those same governments are haphazard at having a coherent biosimilar policy. It shows you how much there is to do.

“It is not savings for savings sake, it is actually treating more patients and changing treatment protocols for the benefit of patients and healthcare budgets.”

Medicines for Europe is also trying to soften the Supplementary Protection Certificates (SPC) legislation which, it alleges, prevents generic manufacturers from supplying developing nations. Van den Hoven wants SPCs to hold firm in Europe but with a waiver for generic and bio-similar companies to compete with India, Canada and China - not restricted by SPCs - to supply medicines to developing nations outside Europe.

Fair proposal

He believes lobbying by the European Federation of Pharmaceutical Industries and Associations (EFPIA), which represents 33 national associations and 42 leading pharmaceutical companies, is blocking a revenue stream and making it harder for poor countries to get much-needed medication

“We are not challenging SPC but it is a market approval delay for Europe, not the entire world,” he added. “A fair proposal for a waiver has been a prime issue for the European Commission for years and it has been moving forward until the lobbying. We played fair but they (EFPIA) are blocking this waiver just at the point when the World Health Organization is asking us to work with them to get European biosimilars into African programmes.

“If they want to fight and argue with us, fine, but leave the developing countries out of it. The result is they don’t get the medicines.

“The originator industry cannot compete with Indian and Canadian generics so let us compete with them then. Don’t shoot Europe in the foot, especially when it is about supporting countries with nothing.”

EFPIA issued a statement on its position, stating: “The SPC regime is part of the current EC review of incentives. We will await the publication of the review and look forward to engaging with stakeholders on its findings. However, for the avoidance of doubt, SPCs are not available in low-income countries. Our industry further supported the extension of the TRIPS waiver, which means Least Developed Countries do not have to introduce patents for pharmaceuti-cals. As an industry we are committed to initiatives that support access to medicines in developing countries as well as safeguarding the future of medical innovation that patients and healthcare systems rely on.”

The talking and lobbying will continue through to the next annual conference but van den Hoven is confident that the generics and biosimilar gospel will be heard.

“We have a lot of work to do. Sometimes you get a bit cynical working with governments but you have to stay positive that you can make a difference. One of the things that came out of the conference is that people are motivated by the difference this industry makes and the difference it can make in the future,” he said. “We face a lot of hurdles and setbacks but people remain really committed to driving change.

“There is so much potential and we just have to help everyone understand that. At times, it is tough but it is also very motivating.”

Article by
Danny Buckland

is a health journalist

23rd August 2017

Article by
Danny Buckland

is a health journalist

23rd August 2017

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