Lessons From European Biosimilars: Where Have We Been, and Where Are We Going?

During the SMi 9th annual conference on Biosimilars and Biobetters, held September 26-27 in London, United Kingdom, stakeholders gathered to discuss the state and trajectory of the EU biosimilars marketplace. Michael Muenzberg, MD, member of the Comparative Outcomes Group and the former medical director of EU biosimilars for Amgen, gave an opening address that reviewed the first decade of European biosimilar experience as a way to contrast the early days of the market with its new direction as the next wave of biosimilars approaches.

In the early days of the market, explained Muenzberg, biosimilar developers had to decide between 2 business models, which he termed a “follow-on model” and a “biogeneric model.” The former model, which has been the dominant approach, involves investing in device design, safety data, and sales and marketing to compete on aspects other than price alone. The biogeneric model, which has not emerged as a dominant option in Europe, is simply to make a product as cheap as possible.

As developers invested in the follow-on model, they had high sales expectations, said Muenzberg. In 2006, estimates for sales of biosimilars by 2011 were as high as the equivalent of $3.2 billion, a number that he called a “very strange” estimate: “They would have been very happy if they’d done $3.2 billion.”

In reality, the best-selling product, Sandoz’s filgrastim biosimilar, sold as Zarzio in the European Union, brought in the equivalent of $500 million in 2013. “This is not a lot if you think about the investment that they did,” said Muenzberg.

Read more about biosimilar filgrastim.

As the market developed, especially with the introduction of Celltrion’s infliximab biosimilar, sold in the EU market as Remsima, the market saw greater pressure to bring down the cost of drugs further than the follow-on model may have anticipated; Celltrion and its distributor Orion launched Remsima in Norway with a 39% discount on the price of the reference Remicade, but Norway’s health authority demanded an even bigger discount; by 2015, Celltrion and Orion had reduced their price by an additional 72%. Afterward, said Muenzberg, “All hell broke loose…it’s started with other markets, it’s started with other drugs… How can they afford it?”

It remains to be seen, Muenzberg explained, how far down prices could be driven with large numbers of competitors entering the market for the same product at the same time. In October, multiple adalimumab products will reach the European Union, and within months, as many as 5 pegfilgrastim biosimilars could enter.

What is clear, said Muenzberg, is that the cost of therapies is king in determining which products will be selected for use in EU health systems. Even in the case of anticancer biosimilars, which some stakeholders had feared would pose a challenge for provider acceptance, there has been very little pushback from EU providers on switching patients. Health systems, he said, need the cheapest drug; providing other services in the follow-on model, like more nursing support or improved administration devices, will be secondary to cost concerns.

In the following keynote address, Paul Harmon, RPN, MBA, MSc, European oncology biologics lead at Mylan, voiced concerns about this trend toward lower and lower prices, because, he noted, many companies may decide against entering the market with a biosimilar if it does not feel it can obtain an appropriate price for its therapy, or businesses may exit the market after having launched.

“When you look at some of the models…some of those discounts are list prices. It doesn’t even account for the hidden rebate.” An approximate 95% discount, after such rebates, is likely for some biosimilars currently sold in the European Union. “What is the appropriate price? That can be market-specific, but it’s definitely not minus 90%.”

If companies elect not to enter the market, or exit after having launched, said Harmon, drug shortages could become a reality for biosimilars in much the way they have affected the generics market. In Ireland alone, he noted, 140 molecules are out of stock because companies have to stop manufacturing products that are not commercially viable. “We’d be naïve to think it wouldn’t happen” with biosimilars, Harmon said.

While it is the payer’s role to get the best price for a given drug, unless EU member states’ tenders focus on more than price alone, and instead begin to consider surrounding services, the direction of the market will be, he warned, toward drug shortages for these life-saving and live-changing therapies.