Biosimilar Competition Has Led to Consistent Price Reduction in Europe

In its latest report on the impact of biosimilar competition on price, volume, and market share, the European Commission found a consistent average price reduction in therapeutic areas that have seen biosimilar competition. The report, prepared by QuintilesIMS in cooperation with industry stakeholders, used 2016 data and looked at 6 established therapeutic areas in which there is biosimilar competition: epoetin (EPO), granulocyte colony-stimulating factor (G-CSF), anti-tumor necrosis factor (anti-TNF), fertility/gonadotropin (hGH) preparations, and recombinant human insulins. The report was presented in Brussels at the European Commission’s stakeholder conference on May 5, 2017.

The following are 4 key takeaways from the report:

1. Biosimilars reduced the average list prices for the whole product class in European countries. Biosimilar entry can have almost as large an impact on the total market price as it has on the biosimilar/reference product price, the report states, citing the example of Portugal, where the price of EPO fell 66% in the year after the biosimilar entered the market.

The correlation between biosimilar market share of the total market and price reduction of the total market is weak. The report found that high savings can be achieved even if the biosimilar market share is low. “Price reduction can be achieved through price regulation interventions and/or commercial decisions of manufacturers,” the report notes. Even if the biosimilar is not, in the end, the product sold, it is likely an essential step to generate a more competitive environment, which leads to lower prices. The report cautions, however, that in the long term, low biosimilar uptake could lead to fewer new biosimilars being developed, reducing the overall competitive pressure.

Drug classes with more than 1 biosimilar display a weak correlation between the number of biosimilar competitors and the price change within the entire market. While savings can be achieved without competition from multiple biosimilars, in the long term, it may be necessary to have multiple biosimilars to achieve the full effect of competition, the report suggests.

2. Lower reference product pricing lowered biosimilar market penetration. The larger the price cut on the reference product, the lower was the impact of biosimilars. This was observed for at least 2 therapy classes: anti-TNF and hGH. “This illustrates that originator competitive pricing strategies can influence the uptake of biosimilars in some areas,” the report states. However, reducing originator prices could result in biosimilars not entering the market at all, restricting competition.

3. In therapeutic classes with multiple biosimilar competitors, the first biosimilar to market typically has the highest biosimilar market share. Therefore, time to market for biosimilars can impact uptake in the class. The report found that where multiple launches occurred in the same month in a country, market shares for these products were assigned to the same rank.

4. Biosimilar competition increased consumption of drug products across several therapeutic areas. This was true even if there was already high usage of that therapy class. For example, in Sweden, there was a significant increase in consumption of anti-TNFs after a biosimilar became available—even though there was already high usage of that class of drugs. Thus, the report concludes, biosimilar competition increased patient access to the product class. Lower prices increase patient access, the report notes. However, other factors can affect usage, including:

• New indications or restrictions of indications (such as EPO safety warnings)
• General economic conditions imposing use restrictions
• Changes in diagnosis and prevalence of diseases.

Overall, biosimilar competition contributes to increased patient access of the whole market. Although the total market volume uptake varies significantly by class in Europe, it must be noted that all products in these therapeutic areas, including biosimilars, have led to varying degrees of increased patient access in each country.

While there is not just one formula that will work to achieve savings potential, we can learn from the experience in all countries, the report states.