A study of five European Union (EU) nations finds that Germany provides the most favourable environment for biosimilar drugs, while Italy is the least favourable.

The EU has had a pathway for biosimilars since 2005 and has a common regulatory system for approving such products, but differences in reimbursement practices and incentives, as well as variations in medical and clinical practices, have resulted in different outcomes across member states, according to Professor Henry Grabowski, director of programme in pharmaceutical health economics at Duke University in North Carolina.

Speaking at a seminar organised by the industry-backed Office of Health Economics (OHE) in London, Prof Grabowski discussed his recent research into the market experiences of biosimilars in the EU and prospects for them in the US, where a biosimilars pathway has yet to be finalised at the Food and Drug Administration (FDA).

In contrast to the proposed FDA system, the EU pathway does not evaluate interchangeability, and it leaves questions of substitutability at pharmacy level to the member states. No EU state currently allows substitution for biosimilars, and a few, such as France, specifically prohibit it, he noted.

From a reimbursement perspective, the study finds that Germany has "wholeheartedly" embraced biosimilars. It has a reference pricing system for them, plus specific regional biosimilar targets or quotas for physicians and sickness funds. Moreover, Germany is Europe's main source of biosimilar production, and manufacturers generally enjoy strong reputations with healthcare providers, said Prof Grabowski.

The UK is also viewed as a favourable environment for biosimilars, with its long culture of generic utilisation and relatively high launch prices. However, consumption rates for biopharmaceuticals are lower in the UK than in many other high-income states.

Reimbursement in England is also influenced by the National Institute for Health and Care Excellence (NICE)’s cost-effectiveness analyses. NICE has assessed seven different somatropin products, including Sandoz' biosimilar Omnitrope, and concluded that there were no significant clinical differences. Other classes with biosimilars are likely to undergo scrutiny by NICE in the future, he noted.

Of the five nations, Italy seems to have the least favourable environment for biosimilars, with a strict price regulation system which requires a mandatory discount of 15%-22% for their prices relative to those of the reference brand.

France also has a strict price regulation system and compulsory discounts for biosimilars, but volume sales of the products are high compared to other EU countries, making it a potentially attractive market for biosmilar producers.

The fifth nation studied, Sweden, has some of the highest manufacturer-level prices in Europe, including for biologic drugs, and this, coupled with the nation's decentralised system of financing by county councils, makes Sweden a potentially attractive market for biosimilars.

Germany and Sweden would appear to provide the closest cases to the US, given their relatively high drug prices for innovative drugs compared to other EU states, a history of generic utilisation and a decentralised approach to drug use and reimbursement, he said.

The US market situation for biosimilars is of particular interest because it is the centre for biotech innovation, it spends more on biologic products than any other nation and it has a strong culture of generic drug use, he noted. However, his research suggests that, if the FDA determines that a biosimilar is not bioequivalent or interchangeable with the reference brand, its manufacturer may need to commit substantial resources post-launch to educate providers. 

The importance of interchangeability is likely to be much more pronounced for self-administered products distributed through the US pharmacy sector, and this will likely incentivise insurers to use pharmacy benefit management tools such as tiered formularies and step therapy regimens. It could also allay some physician and patient concerns about product comparability, he suggested.

Interchangeability is likely to matter less for biologics dispensed by physicians in US hospitals or outpatient clinics because their pharmacy and therapeutics (P&T) committees are able to make informed and binding judgements about product comparability, even when an interchangeability rating is not present. Hospitals are also likely to be most price-sensitive, and their P&C committees are generally able to implement strict formulary decisions, he added.

In conclusion, Prof Grabowski forecast that biosimilar competition is likely to have fewer entrants than generic competition for the foreseeable future, given the higher cost of entry, and that most biosimilars will compete as non-interchangeable therapeutic options. 

Consequently, the rate of biosimilar penetration will depend not only on price competitio, but also on the ability of manufacturers to convince physicians and providers of high-quality standards. The development of next-generation products by innovators and the evaluation of all therapeutic alternatives by public and private payers will also be important for biosimilar acceptance, he told the meeting.