European Stakeholders Emphasize Multiwinner Tenders as Key to Competition

With tenders for adalimumab and its biosimilars having taken place only recently in the European Union, the issue of biosimilar procurement is at the forefront of many stakeholders’ minds in the wider discussion about biosimilars, with many questioning how low prices can fall and how sustainable single-winner tenders in some nations can be. During the opening day of the Medicines for Europe 17th Biosimilar Medicines Conference, held March 28-29 in Amsterdam, the Netherlands, a group of experts addressed successes, challenges, and learnings from biosimilar procurement processes.

Florian Turk, PhD, global head commercial, Sandoz, and vice chair of biosimilar market access committee for biosimilar medicines group, Medicines for Europe, set the stage by saying that, for procurers, “The shadow you cast as a buyer is significant.” He asked procurers to reflect on whether they are creating high certainty for manufacturers in their markets, or sending clear signals about the market’s interests in both price and other criteria. Investment and divestment decisions around biosimilars are being made based on market signals, Turk said, and markets must guarantee that their purchasing systems ensure long-term, sustainable access to biosimilars if manufacturers are to remain invested in biosimilars.

Michele Uda, MBA, director of the Italian Generic and Biosimilar Italian Industry Body, said that, in the Italian system, an early lack of certainty significantly slowed uptake for biosimilars. So, he said, they decided to try a new system based on the idea of meeting 5 crucial needs: ensuring immediate competition, enlarging patient access, providing clinical options, securing a steady drug supply, and delivering savings. The new system, codified in law in 2016, demands multiwinner tenders in cases in which more competitors exist, and when a patent has expired and a new biosimilar becomes available, authorities must accept new biosimilars within 60 days.

“The system is designing the perimeter where the competition can play a very important role,” he said, and “after 2 years I can tell you competition is there with a multiwinner tender.” Most regional authorities in Italy have decided to move to multiwinner tenders, even if only 2 drug makers are competing.

As Italy seeks to improve its process even further, Uda said, it must bear in mind that “a good procurement system is nothing without stakeholder involvement,” and must start with clinician and patient needs.

Also emphasizing the need for multiple tender winners was Warwick Smith, director general of the British Biosimilars Association.

While the United Kingdom’s National Health Service (NHS) is a particularly massive system, and one in which change is difficult to create, “the big impetus the NHS saw was that, unusually for the [United Kingdom], the market share for biosimilars was lacking or falling behind the rest of Europe.” After multistakeholder engagement involving patients, prescribers, nurses, and industry, the decision to implement a commissioning framework for using best-value biologics was taken by the NHS.

Interestingly, patients were one of the most critical groups in moving the framework forward; Smith explained that a particularly skeptical patient group, after lengthy debate and discussion, became one of the most vocal proponents of biosimilars in the NHS. One reason, said Smith, was that “we didn’t talk about reduction in price. We talked about access.” With one-third more patients being treated for half the cost, said Smith, “what’s not to like?”

The NHS’s much-discussed tender for adalimumab, said Smith, like Italy’s move to a multiwinner tender system, was a sea change from processes that had gone before. While the United Kingdom reached a 90% biosimilar market share for biosimilar infliximab and an 80% price reduction—“the classic British generic model”—the nation hoped to avoid what it had seen as a race to the bottom on price for growth hormones. “Competition that drives you down to 1 supplier is not competition,” he said. With the adalimumab tender, the arrangement was structured to increase market share across regions the more a developer reduced its price. While the process was imperfect, “it does show a way forward.”

In the future, for less major products, Smith said that the NHS will likely not go through such a complex tendering process as it did for adalimumab. But the system did learn that, when price is the only driver in a tender, competition suffers. The NHS now has a clearer understanding that nonfinancial factors, like home care and delivery, that are important areas on which developers can compete.

Finally, Luca Morreale, senior manager of HighPoint Solutions, a company that has access to all EU tender data, said that, over the past 2 years, there have been both positive and negative developments in procurement processes. Allotments of tenders have changed to have more lots and more geographical splits, as seen in the UK experience, which is positive from a sustainability perspective.

However, Morreale says he has seen “tremendous pressure on the prices. It’s getting to the point where we see exits on the part of the manufacturers” of biosimilars. If things continue to proceed in this way, he warned, “in 10 years, there’s nobody playing.”