Correlation Between Biosimilar Market Share, Price Reduction Is Weak

April 2016 may mark 10 years since the first biosimilar was approved in Europe, but the latest research indicates the market is far from mature. Uptake and price reductions vary markedly both between countries and product categories, and overall there is little correlation between market share and price cuts.

Across Europe as a whole, the price of epoetins fell by 27 percent in 2014 compared to the price in the year before the first biosimilar version was launched in respective national markets. However, in three countries, the price reduction was much higher, at 61 percent in Slovakia, and 51 percent in Bulgaria and Portugal.

It is a similar picture for Granulocyte-colony stimulating factor, where the average price reduction was 20 percent, but Finland cut the price by 49 percent, Slovenia 48 percent and Slovakia 39 percent.

In human growth hormone, the gap was even bigger. Here, the average price reduction was 13 percent but Slovakia and Bulgaria secured reductions of over 70 percent, and Romania got 59 percent.

The research was carried out for the European Commission, which after leading the world in establishing the regulatory science and pathway for biosimilars, has been frustrated by the slow uptake. However, it now transpires that the correlation between biosimilar market share and price reduction is weak, according to market analyst IMS Health, which conducted the research.

“High savings can be achieved, even if the share is low,” the IMS researchers said. In fact, even in cases where a biosimilar is not sold in a particular national market its existence may “generate a competitive environment, which leads to price reduction.”

Furthermore, the reduction not only affects the price of the directly referenced originator product, it affects the whole product class. This includes long-acting or pegylated versions of epoetin, for which biosimilar versions cannot be substituted or interchanged.

The IMS report was compiled with inputs from industry bodies including the European Federation of Pharmaceutical Industries and Associations and Europabio.

THERE ARE CAVEATS

However, a lack of complete transparency over pricing, tenders, discounts for volume and so on, leads to inevitable caveats. IMS said other countries may have achieved similarly large reductions as those with the biggest published cuts but not disclosed them. At the same time the highest reduction may not read across to the lowest price.

In some lights, de-linking price from uptake may seem positive. But it also gives cause for concern that the position is not sustainable. While the countries with the highest published cuts show reductions of 50 percent to 70 percent, to achieve long-term savings the market must remain competitive and this requires alternative suppliers. “Too high short-term savings might preclude this,” the IMS researchers say.

With higher development costs and longer timelines, it has been clear from the outset that the advent of biosimilars would not lead to the same sort of price reductions seen with small-molecule generics.

However, it is also the case that the originators of biologics have reacted differently in the face of competition. Traditionally, originators of small-molecule drugs either maintain their prices or reduce them in line with mandatory pricing requirements.

In biosimilars the originators have taken a proactive stance and used a number of different tactics to defend their positions. These have included launching long-acting products without a price premium, a move that IMS said is changing treatment paradigms and therefore, usage.

Originators also have reduced the price of reference products and are moving into biosimilars themselves.

In addition to demonstrating the impact of biosimilar competition on price and market share, the European Commission has been keen to show increased patient access. Here, the IMS research showed that lower prices have had the greatest influence in those countries with low usage of originator products.

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