Biosimilar Competition: Lessons from Europe and Prospects for the US

Grabowski, H.

Seminar Briefing
October 2014

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Based on an OHE lunchtime seminar by Professor Henry Grabowski, this seminar briefing explores the lessons learned from Europe’s experience with biosimilars, and provides an analysis of how the US market may evolve.

With respect to the European experience, the briefing looks at how the market for EMA-approved biosimilars in the area of erythropoietins (EPOs) and granulocyte-colony-stimulating-factors (G-CSFs) has evolved since 2009 in France, Germany, Italy, Sweden and the UK.

The author highlights two key results. Firstly, the market experience varies greatly across product classes and countries – mainly due to differences across countries in reimbursement practices and incentives as well as variations in medical practices.

Secondly, the second generation products tend to be dominant in terms of market share across almost all countries because patient utilisation had shifted in that direction, prior to biosimilar entry. Second generation products are longer-lasting, so patients require substantially fewer infusions over a course of treatment. These tend to be more expensive on a cost per vial basis versus the original biologic (called the reference product). However, they may not necessarily be more expensive on a cost per daily dose since they require substantially fewer doses per course of treatment. As a result, the size of expected cost savings from the use of biosimilars to third party payers in these two areas will be lower than originally thought.

The biosimilar regulations in the US are not complete, and a number of issues are still to be finalised. As argued by the author, whilst the FDA has issued some guidelines on the regulatory requirements to establish biosimilarity, they are not nearly as clear as the EMA’s. Moreover, the FDA has not put forward the regulatory requirements to establish interchangeability. Consequently, past estimates of the potential cost savings from the introduction of biosimilars in the US might not be achieved. In the longer run, as science advances and other big-selling biologics lose patent protection, insurers will find a way to encourage biosimilars, and physicians will become more experienced with them.