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Biosimilar products in the European Union (EU) must go through a centralised procedure that licenses the product for use in EU Member States. Until experience grows in both approval and use of biosimilars, regulation inevitably will be somewhat case-by-case and concerns about safety will be prominent.

Europe already has some experience with the impact of biosimilars on pricing, including a price war in Germany for EPOs. Whether that experience will be repeated, however, depends on a number of factors, including the originator's pricing strategy and reservations by payers and physicians about potential risks.

Virtually all models forecast that price competition will be less intense and price declines modest in comparison to the generics model. Many models, however, miss or underestimate factors and trends that push the biosimilars market in the other direction. These include, for example, sources of supply with lower variable costs, profit incentives for entry, participation of major pharma companies and an increase in comfort levels over time.

The OHE model varies from other models of biosimilar markets evolution by starting with transaction prices, rather than list prices, and factoring in the collection of 'Patient Safety Year' (PSY) data. These data will capture actual experience with a biosimilar, increasing the comfort level of prescribers and encouraging a gradual increase in market share. PSY data also have important implications for payers and governments, whose options also were outlined in this presentation.

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