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Biosimilars: Regulation Issues

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Currently, when a patient wants to be treated for a pathology, depending on the country, a doctor or a pharmacist can propose different types of drug: an originators, a generic or a biosimilar with the aim of bringing the best solution to the patient.

In the same time, authorities, learning societies, patient associations, national and European unions work closely together to set up regulations that will help bring the most efficient drugs at the lowest price on the market and take care of the patient.

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Biosimilars: Regulation Issues

  1. 1. Masters of Science in International Strategy and Influence SKEMA Business School, School of Knowledge Economy and Management France, China, United States and Brazil REGULATORY ISSUES ON THE DEVELOPMENT OF BIOSIMILARS Research Question: Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originators manufacturers? Student: Joseph Pategou Tutor: Healthcare expert at Boston Consulting Group Co-Tutor: Dr. Benjamin LEHIANY, Research Associate Polytechnic School Paris and Scientific Director, MSc. International Strategy & Influence Year: 2014 – 2015
  2. 2. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 2 TABLE OF CONTENT Acknowledgement ............................................................................................................................3 Executive summary ..........................................................................................................................4 Introduction ......................................................................................................................................9 I. Methodology .......................................................................................................................11 II. Empirical context: comparison between Generics and Biosimilars..................................19 1. Regulation............................................................................................................................21 A. Generics .........................................................................................................................21 B. Biosimilars .....................................................................................................................26 2. Market Trends.......................................................................................................................31 A. Generics .........................................................................................................................31 B. Biosimilars .....................................................................................................................34 III. Results and illustration.......................................................................................................39 1. Results ..................................................................................................................................41 2. Strategic positioning for the originators manufacturers...........................................................53 A. Benchmark on Generics ..................................................................................................53 i. Context ..................................................................................................................53 ii. Action of the manufacturers of originators .............................................................55 B. Benchmark on Biosimilars: the case of Neupogen ..........................................................59 i. Context ..................................................................................................................59 ii. Action of the manufacturers of originators .............................................................61 C. Interpretation of our interviews .......................................................................................66 Conclusive discussion......................................................................................................................68 1. Discussion............................................................................................................................69 2. Conclusion ...........................................................................................................................72 Annex .............................................................................................................................................74 1. Reference .............................................................................................................................75 2. List of illustration .................................................................................................................76 3. Definition.............................................................................................................................77
  3. 3. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 3 ACKNOWLEDGEMENT I want to thank all those who gave me their help and their support during my scholarship and in the preparation of my graduation memory. First, I want to thank in France, the LEEM, the GEMME, the Association France Colon, the Maison des MICI, the French Society of Cardiology, the French Society of Rheumatology, the French National Society of Gastroenterology and IMS Paris for their trust and availability. In Great Britain, I thank the Medicines and Healthcare Products Regulatory Agency, the Association of the British Pharmaceutical Industry, National Institute for Health and Care Excellence, the British Society for Rheumatology and IMS London for their support and availability. I want to thank the Italian Federation of Cardiology, the Confederation of the three Italian Societies of Gastroenterology and the European Federation of Crohn's & Ulcerative Colitis Associations for their valuable assistance on regulation in Italy. I am grateful to the Drug Commission of the German Medical Association and the German Society of Rheumatology. Thanks to the European Medicines Agency, European Generic Medicines Association and European Biosimilars Group for the incredible support they have given me in the realization of this research. I express my gratitude to Professor Benjamin Lehiany and the Boston Consulting Group for allowing me to work on this exciting subject. My sincere acknowledgment to my family for their encouragement. I also wish to thank the teaching staff of Skema Business School for the teachings and support.
  4. 4. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 4 EXECUTIVE SUMMARY Nowadays patients and physicians can have access to three types of drugs: a originators, a generic or a biosimilar. Those drugs have different regulatory systems that apply in Europe; moreover the biosimilars regulation is evolving and may change. Regulation is an important factor that can give more confidence to patients and healthcare professionals. As a consequence, biosimilaires will grow. Therefore the question we shall ask ourselves is Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originators producers? To bring the most accurate answer to this question, we will study the regulation framework in France, Germany, Italy and United Kingdom. I. METHODOLOGY To understand the regulatory issues on the development of biosimilars in France, Germany, Italy and United Kingdom: We first determined the main differences between generics and biosimilars using mainly secondary data, focusing on regulation and market trends. Then, we concentrated on regulation of biosimilars, by doing 22 interviews of 4 types of organizations (Authorities, National and European pharmaceutical unions, Learned Societies and patient associations); we established a questionnaire of 10 questions based on five main topics:  Naming  Labelling  Clinical trials /extrapolation  Switching/ substitution  Quotas/ tenders All interviewees received the same questions; we made cross analysis between countries and actors in order to draw the best lessons. Finally, we looked which strategic positioning could have a originators producer to face biosimilars and to maintain its position in the market by studying 13 companies.
  5. 5. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 5 II. EMPIRICAL CONTEXT : COMPARISON BETWEEN GENERICS AND BIOSIMILARS Biosimilars and generics are drugs which enter the market at the end of the originators patent; our observations help us to see the main differences in terms of regulation and market trends between these two types of drugs. Generics have simple chemical structures and are considered to be identical to their reference medicines. In comparison, a medicine which is developed to be similar to an existing biological medicine is a biosimilar (see table 19). Table 19: Comparison of difference and common points between biosimilars and generics- Structure KEY POINTS BIOSIMILARS GENERICS Nature Drug extracted from a biological environment Chemical drug Molecular size Up to 270,000 Da 100 to 200 Da Development Comparative studies Bioequivalence studies Duration of development 5-7 years(500 patients) 2-3 years (20-50 patients) Cost of the development 200-300 million dollars 2-4 million dollars On regulation, we observed dissimilarity, for example the Marketing Authorization of generics is mainly based on bioequivalence studies or for biosimilars on comparative study (see table 7). Table 7: Comparison of difference and common points between biosimilars and generics- Regulation KEY POINTS DIFFERENCE IDENTICAL Naming x Labelling x Substitution x Quotas and tenders x Marketing authorization x Moreover, biosimilars regulation is part of important debates in many countries, compared to generics drugs.
  6. 6. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 6 Eight major world markets accounting for 84% of their global sales drive the generics (United States, Germany, France, Britain, Canada, Italy, Spain and Japan). The first market is the United States with 42% of global sales (global sales $123.85 billion in 2010 and will reach $231.00 billion in 2017). When you talk about biosimilars, the EU is the most advanced market, accounting for 80% of global spending (Global market: $2.6 billion in 2016 to $25 billion in 2020). We observed 19 biosimilars in Europe representing 6 actives substances. In terms of volume and value, Germany is the largest; followed by France, Italy and the United Kingdom. All these elements clearly show us that between these two drugs we have different market trend (see table 13) Table 13: Comparison of difference and common points between biosimilars and generics- Market trend KEY POINTS DIFFERENCE IDENTICAL The leading countries x Market value x Number of product x Production cost x III. RESULTS AND ILLUSTRATION Those 22 interviews we made helped us understand the position of Authorities, National and European pharmaceutical unions, Learned Societies and patient associations in four European countries (France, Germany, Italy and the United Kingdom). On a topic like naming, the role of regulation, substitution, market shares, price evolution of the originators and biosimilars, we have a global consensus between actors. Positions are more variable between actors on regulatory issues such as summary of product characteristics, interchangeability and extrapolation. We made an historical benchmark of 13 companies from 2000 to 2015. And observed 10 levers, which were taken by originators manufacturers facing biosimilars and generics competition.
  7. 7. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 7  Price  Prescription  Patent  Market saturation  Legal action  New market  Cooperation  Environmental strategy  Product  Brand strategy Some of these levers seem to be used in the context of biosimilars and others in presence of generics (see table 18). Table 18: Comparison of levers used by originators producer to face biosimilars and generics competition Levers Biosimilars Generics Price X X Patent X X Legal action X X Cooperation X X Product X X Prescription - X Market saturation - X New market X - CONCLUSIVE DISCUSSION The research on France, United Kingdom, Italy and Germany allows us to understand the regulation of biosimilars and the issues regarding this new type of drug. One of the lessons is the fact that the regulation of biosimilars is not clear and still in discussion in many countries, on topics like naming, role of regulation, substitution, summary of product characteristics, extrapolation and interchangeability. Our interviews helped us to have a clear vision on those topics: For the naming system, the World Health Organization suggests a four-letter code attached at the end of every drug name.
  8. 8. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 8 Concerning the label (SmPC) of a biosimilar, it must be in concordance with the label of the reference product. In term of extrapolation, biosimilars have the possibility to be used in several indications like the reference product. Regarding the substitution of biosimilars by pharmacists, there is a global consensus on the fact that it is impossible and not allowed at the moment. But in some countries discussions are in place to allow substitution by pharmacists, for example in France. One of the hottest topics on biosimilar regulation, interchangeability is still in discussion. Germany and United Kingdom have accepted the principle of interchangeability unlike Italy and France who have refused this principle. The economic situation in OCDE countries is an important element that biosimilars and originators manufacturers need to bear in mind. Due to the economic crisis, the total spending of health is declining since 2009 in several countries. According to the Panorama health 2013 of the OECD, it is essential in this context that countries make their health systems more productive, more efficient and more affordable. The countries have sought to reduce spending by lower prices of medical goods, particularly pharmaceuticals, and by budgetary restrictions and wage cuts in the hospital sector. For example, in France and Germany the costs in percentage of GDP evolved from 10% to 12% between 2000 and 2008, then decreased to reach 11% of the GDP in 2011.
  9. 9. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 9 INTRODUCTION Currently, when a patient wants to be treated for a pathology, depending on the country, a doctor or a pharmacist can propose different types of drug: an originators, a generic or a biosimilar with the aim of bringing the best solution to the patient. In the same time, authorities, learning societies, patient associations, national and European unions work closely together to set up regulations that will help bring the most efficient drugs at the lowest price on the market and take care of the patient. Generic drugs1 are the same drug as the original, but produced and sold under its International Nonproprietary Name (INN chemical name of the substance) or under a new trade name. They are produced following the patent expiry, or in the absence of patent. A global analysis2 concludes that this market has generated more than $ 123 billion in 2010 and will reach $ 231 billion in 2017 with an annual growth rate of approximately 9% from 2011 to 2018. Europe holds a very important place in this market, for example the generics market in the UK is the second largest generic market globally, after the United States. A biosimilar3 medicine is a biological medicine that is developed to be similar to an existing biological medicine (the ‘reference medicine’). Biosimilars are not the same as generics, which have simple chemical structures and are considered to be identical to their reference medicines. The active substance of a biosimilar and its reference medicine are essentially the same biological substance, though there may be minor differences due to their complex nature and production methods. Like the reference medicine, the biosimilar has a degree of natural variability. When approved, its variability and any differences with its reference medicine will be shown not to affect safety or effectiveness. Economically, the global biosimilars market represented $1.9 billion in 2013 and will represent $25 billion in 2020. Europe is the most advanced market, with 80% of the global market, 21 approved drugs4 and numerous leading companies like Sandoz. 1 http://www.sante.gouv.fr/qu-est-ce-qu-un-generique.html 2 Where the opportunities are and what role will they play? EGA Lisbon 2011-IMS 3http://www.ema.europa.eu/ema/index.jsp?curl=pages/special_topics/document_listing/document_listing_000318.jsp 4 http://www.gabionline.net/Biosimilars/General/Biosimilars-approved-in-Europe
  10. 10. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 10 The existence of biosimilars and generics is the result of the end of a drugs loss exclusivity. Obtaining a patent allows companies to have market exclusivity for 20 years. This monopoly position must help companies to have return on investments, knowing that the investment for the development of an originators drug can reach nearly $2 billion. Different regulations apply to Europe, for example in terms of marketing authorization or clinical study. Unlike generics, biosimilars regulation is still not fixed. But regulation is an important element that will give full legitimacy to medicines in the mind of patients and healthcare professionals. At the same time, we see a market penetration rate that differs according to the type of the drug and the country. Generics with a clear regulation possess a very high penetration rate in the several countries of Europe, which is not the case for biosimilars. In addition, according to the product concerned, the position of some countries evolves on the market. Germany is the third largest market in terms of generics and the first for biosimilars in Europe. The aim of this research work is to identify first the changing regulatory system for biosimilaire in Europe, more precisely in France, Germany, Italy and United Kingdom. Therefore, how are companies preparing to face biosimilars. Research Question: Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originators producers?
  11. 11. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 11 FIRST PART: METHODOLOGY
  12. 12. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 12 Summary To study the regulatory issues on the development of biosimilars in France, Germany, Italy and United Kingdom: Firstly, we decided to understand the difference between generics and biosimilars in term of regulation and market trends using mainly secondary data. Then, we focus on biosimilars, by doing 22 interviews of 4 types of organizations (authorities, national and European pharmaceutical unions, learned societies and patient associations); we use a questionnaire of 10 questions based on five main points:  Naming  Labelling  Clinical trials /extrapolation  Switching/ substitution  Quotas/ tenders We send the same questions to all the interviewees, those interviews were read several times, we made cross analyzed between countries and actors in order to draw the best lessons. Finally, we decide to see which strategic positioning could have a originators producer to face biosimilars and to maintain his position in the market, mainly based on benchmarking of 13 companies from 2000 to 2015.
  13. 13. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 13 I. METHODOLOGY Our aim was to understand the regulatory issues on the development of biosimilars in four European markets: France, Germany, Italy and United Kingdom. We chose those markets for many reasons: -EU is the most advanced market for biosimilars, (accounting for 80% of global spending) and 19 biosimilars were allowed in Europe5 . -In term of volume and value market for biosimilars in Europe, Germany is the first; followed by France, Italy and United Kingdom6 . We decided in a first step to analyse also generics drug because biosimilars and generics are drugs that come in the market the end of the following the patent expiry of a originators. We want to know what are the differences between generics and biosimilars drug in term of regulation and market trends. To reach our objectives, we put in place two main actions: -Collection of data in four European countries, France, Germany, Italy and United Kingdom. -Data Analysis and interpretation. Generics Knowing that the regulation of the generics is already established and clear, that is why we decided to use secondary data. This helps us to have an overview of this market. Biosimilars  Collection of relevant data We identified people who can share relevant information on biosimilars regulation in France, Germany, Italy and United Kingdom. We find these people inside four categories of actors.  National and European authorities  National and European pharmaceutical unions 5 http://www.gabionline.net/Biosimilars/General/Biosimilars-approved-in-Europe 6 Shaping the biosimilars opportunity-december 2011
  14. 14. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 14  Learned Societies  Patient Associations We identified 22 organizations in the four countries (see the table below). Then, we created an interview guide, based on five main points which are very important when you talk about drug regulation.  Naming  Labelling  Clinical trials/ extrapolation  Switching/ substitution  Quotas/ tenders Table 1: Sample of the interviews
  15. 15. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 15 The following 10 questions were asked: 1. Generally, a comparison is made between biosimilars and generics in terms of regulation, market penetration and sales. According to you, what are the aspects of biosimilars comparable to generics, and which ones are not? 2. In Europe, Germany is the largest market for biosimilars. According to some, this advance may be explained partly by price regulation and biosimilars repayment terms in Germany. In your opinion, what is the role of regulation in the European market for biosimilars? 3. The name of a medication is an important element. It allows their differentiation and reassure patients. Regarding biosimilars, the World Health Organisation has chosen to develop a four-letter code at the end of the name (for instance: epoetin alfa bbbb). This code is entitled to differentiate generic and originators from biosimilar. What do you think of this approach? 3.1 Some professionals believe that this differentiation will hamper the substitution needed to reduce health care costs. What is your opinion? 3.2 Will this naming system allow to more easily track the adverse effects that could be included in the patient records? 3.3 Do you think of other advantages or disadvantages related to this approach? 4. Instructions accompanying medication provides important information for its proper use and for patient safety. Do you think the instructions of a biosimilar should provide the same information as the ones of the generic or originators it replaces? 4.1 In order to strengthen trust, some associations recommend a combination of information about each biosimilar and the reference product in the record. What is your opinion regarding this proposal? 4.2 Will not a different instruction between the biosimilar and reference lead the prescriber to the conclusion that biosimilars do not require the same level of proof that their reference products? 4.3 Do you see other advantages or disadvantages in the fact of differentiating instruction of a biosimilar from the one of its reference product?
  16. 16. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 16 5. Some reference products already commercialised are used in several therapeutic indications. Regarding biosimilars, is such a use desirable? 5.1 If extrapolation is desirable, is conducting a clinical study necessary? 5.2 If not, is it necessary to implement the same approach, which is used for generics? (Meaning setting up bioequivalence studies?) 6. In France, Italy, and in Germany, the replacement of a medication by a generic is possible through a pharmacist. Do you think that this process should be extended to biosimilars? 6.1 In your opinion, is replacement by biosimilar not going to threaten medication’s traceability, and thus the identification of the origin of undesirable reactions in the patient? 6.2 The process of substitution requires the creation of a regulatory basis for interchangeability criteria. Do the expected benefits of such regulations allow you to justify the costs and regulatory risks borne by the stakeholders (government and companies)? 7. In Germany, in some cities such as Bremen, a quota system encouraging doctors and health insurance fund to use biosimilars has been set up. It is translated into an increase in the prescription of biosimilars in this town. What is your point of view regarding the set-up of quotas or call for tender for biosimilars? 7.1 As part of a call for tender, if a company wins a two-year contract, there is little incentive for competitors to produce. If the provider chooses not to meet its obligations, there is a risk of supply disruption. Do you think that it is a major issue in your country? What would you consider the best way to prevent this situation? 7.2 In order to improve the penetration of biosimilar in various countries, would not it be more effective to communicate to physicians and suppliers about the high quality standards for biosimilars? What would be according to you the best way to answer it?
  17. 17. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 17 8. In 2013, on the world scene the biosimilars market accounted for $ 1.3 billion of which 80% in Europe. By 2020 it will account for $ 25 billion. According to you, what will be the evolution of this market in the upcoming years in Europe, especially in France, Germany, Italy and in the United Kingdom? BIOSIMILARS’ MARKET SHARE (Volume and Value) Volume (%) - 2015 5% 15% 25% 35% 45% Other : Volume (%) - 2020 5% 15% 25% 35% 45% Other : Value (billion) - 2015 2 4 7 10 15 Other : Value (billion) - 2020 5 15 25 35 50 Other : 9. The introduction of generics has significantly reduced medication prices. For instance, in Germany the decrease can reach of 71%. Regarding Biosimilars, may we expect such a decrease? EVOLUTION OF BIOSIMILAR AND ORIGINATORS MANUFACTURING PRICE Originators – Year 0 (Y+0) -2% -4% -6% -8% -10% Other : Originators - Year 2 (Y + 2) -5% -10% -15% -20% -25% Other : Originators - Year 5 (Y+5) -10% -15% -25 -30% -50% Other : Biosimilar - Year 0 (Y+0) -5% -15% -25% -35% -50% Other : Biosimilar - Year 2 (Y+2) -10% -20% -30% 45% 60% Other : Biosimilar - Year 5 (Y + 5) -15% -25% -35% -50% -70% Other : Year 0 = Y = Year of loss of the originators’ patent 10. With biosimilars and generics being present on the market, do you think that originators medications will keep their leadership in France, Germany, Italy and in the United Kingdom? ORIGINATORS’ MARKET VALUE (Volume and Value) Volume (%) - 2015 5% 15% 25% 35% 45% Other : Volume (%) - 2020 5% 15% 25% 35% 45% Other : Value (billion) - 2015 2 4 7 10 15 Other : Value (billion) - 2020 5 15 25 35 50 Other :
  18. 18. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 18 22 interviews were achieved in France, Germany, Italy and United Kingdom; and we made cross analyzed between countries and actors. Then, we decided to see which strategic positioning could have a originators producer to face biosimilars and to maintain his position in the market, based on:  Benchmarking on the experience of pharmaceutical company with generics  Benchmarking on the experience of pharmaceutical company with biosimilars  The results of our interviews All those interviews and strategic analysis helped us to answer our question. Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originators producers?
  19. 19. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 19 SECOND PART: EMPIRICAL CONTEXT: COMPARISON BETWEEN GENERICS AND BIOSIMILARS
  20. 20. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 20 Summary Even if, the biosimilars and the generics came in the market after the end of originators patent, the comparison between them clearly shows that these two types of drugs are different in terms of regulation and market trends. Biosimilar medicines are biologicals developed to be similar to an existing biological medicine. Whereas generics have simple chemical structures and are considered to be identical to their reference medicines. On the regulation part, we see big difference.The marketing Authorization of generics is mainly based on bioequivalence studies unlike biosimilars based on comparative study. Moreover, the regulation of biosimilars is still not clear and still in discussion in many countries, unlike to generics drugs. In term of sales, generics are driven by eight major world markets accounting for 84% of global sales (United States, Germany, France, Britain, Canada, Italy, Spain and Japan). The United States is the largest generics market with 42% of global sales (global sales $123.85 billion in 2010 and will reach $231.00 billion in 2017. The most advanced market for biosimilars, is the EU representing 80% of global spending (Global market: $2.6 billion in 2016 to $25 billion in 2020) with 19 biosimilars already marketed and representing 6 actives substances. Germany is the first largest market in volume and value; followed by France, Italy and United Kingdom.
  21. 21. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 21 II.EMPIRICAL CONTEXT : COMPARISON BETWEEN GENERICS AND BIOSIMILARS 1. REGULATION A. Generics A generic medicine7 contains the same active ingredient as the originators product on which it is based and as such is interchangeable with this originators. It offers the same high quality and efficacy, together with affordability. In theory, dosage, indications, cons- indications, side effects and safety guarantees are the same. This combination has made them increasingly attractive for healthcare systems as a whole and patients in particular. They can be marketed after the patent expiry of the originators product on which they are based. Graph 1: The life cycle of generics A generic drug has a particular life cycle8 with mainly two steps. The first one is to obtain the marketing authorization. Generic drugs just need a bioequivalence study contrary to the originators that need clinical study. Clinical study is a prospective biomedical or behavioral research studies on human subjects that are designed to answer specific questions about biomedical or behavioral interventions, generating safety and 7 http://www.sante.gouv.fr/qu-est-ce-qu-un-generique.html 8 Rapport 2012 sur les médicaments génériques-Mutualité Française
  22. 22. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 22 efficacy data. Clinical study has four phases: 0, 1, 2, 3 and 4 (See appendix for more information). The second step is the launch of the generic drug. Having a CCP will increase the protection of the Originators by 5 years and delay the generics entry. The aim of this part is to have a general overview of the regulation of generics drug, in four countries: France, Italy, United Kingdom and Germany. In terms of regulation, 5 key points have been and are still much debated: naming, labelling, switching/substitution, quotas/tenders and clinical trials/extrapolation. We will discuss those points.  Naming The naming of a drug is important; it allows their differentiation and gives confidence to patients. The use of a single name9 is also a requirement for generic/hybrid medicinal products regardless of whether the applicant/ Marketing Authorization Holder (MAH) wishes to use an invented name or a common name or scientific name, together with a trademark or the name of the MAH. It should be noted that the applicant/MAH will be required to identify the ‘reference medicinal product’ and the legal basis for submission of the application within the invented name notification. The name review group should also be consulted where the applicant/MAH (Marketing Authorisation Holder) wishes to use the common or scientific name, together with a trademark or the name of the Marketing Authorisation Holder. In such cases the Marketing Authorization Holder should take into account the following rules:  If an International non-proprietary name (INN) recommended by the World Health Organization exists for the active moiety it should be used within the name of the medicinal product exactly as published without omissions or abbreviations. All the linguistic versions of the INN (International non-proprietary name), including 9 EMA Procedural advice for users of the centralized procedure for generic/hybrid applications
  23. 23. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 23 translations officially recognized at the national level, shall be considered to be the same name. If one does not exist, the usual common name should be used.  If a Modified INN (INNM) recommended by the World Health Organization exists for the active moiety, it should be used within the name of the medicinal product exactly as published without omissions or abbreviations.  Where the active is an unpublished INNM the name of the medicinal product should be that as agreed by users of INNs (pharmacopoeia, regulatory bodies, stakeholders), in accordance with the WHO INNM working document 05.167/3.  The ‘name of the MAH’ within the name of the medicinal product should correspond to all or part of the official name of the MAH as presented in the proof of establishment of the applicant/MAH. The requirement for a single name for a generic medicinal product of a reference medicinal product authorized through the Centralized Procedure applies also in the case the generic medicinal product is authorized by member states via the Mutual Recognition or Decentralized Procedure.  Labelling The label10 of a drug provides important information for the proper use and patient safety. We can regroup all this information in 5 groups. 1. Definition of the drug 2. Information you must know before taking the drug 3. How to take the drug? 4. What are the possible side effects? 5. How to store it? The name of those groups can be different in some countries. Consistency and transparency of labels lead to a better understanding and acceptance of the drug with all stakeholders (Patients, Professionals….). In the case of the generic, the label of the drug is an identical copy of the reference product. 10 Lessons learned from the review of the labelling of 5 centrally authorised pandemic vaccines- 10 February 2014 EMA
  24. 24. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 24  Substitution The substitution11 by the pharmacist is allowed in France, in Italy and in Germany but is forbidden in United Kingdom. France and Italy have a system of price setting, in Germany we don’t have this king of system and in United Kingdom also but generic can’t be more expensive than reference drug. In some of those countries, we have incentive plan in the delivery of generic medicines by the pharmacists for example in France (see Table 2). Table 2: Comparison between countries in term of price and substitution United Kingdom France Italy Germany System of Price setting Free. But generic can’t be more expensive than the reference drug. The prices of refundable medicine are administered Yes Free Is there a right of substitution by the pharmacist? No, But the prescriptions are most of the time Denominated in DCI (INN) Yes, in the perimeter of the directory of the generic groups. Yes. The substitution is legally authorized. The doctor can oppose to the substitution Yes. The substitution is compulsory except opposite mention of the doctor Is there a plan of incentive in the delivery of generic medicines by the pharmacists? No Yes. Preferential margin and payment in the performance. No No. The amount of the remuneration is fixed by prescription DCI: INN: International non-proprietary name Source : Observatoire du médicament FNMF à partir des données de l’EGA et de l’AIM, 2011 et 2012  Quotas and Tenders In France, in United Kingdom, in Germany12 and in Italy, we don’t have a system of quotas for drug. We have tenders in Germany; this concerns only the new type of drugs and many actors are involved in the mechanism of calls for tender for example: the Health Insurance Funds. In France, we also have tenders for the hospital market. We observed discussion concerning the implementation of a system of calls for tender in the United Kingdom and Italy. 11 Rapport 2012 sur les médicaments génériques- Mutualité Française 12 http://gabionline.net/Biosimilars/General/Germany-wants-to-increase-biosimilars-penetration
  25. 25. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 25 Table 3: Comparison between countries in term of tenders United Kingdom France Italy Germany Existence of an (ambulatory) mechanism of calls for tender No Yes, in hospital No Yes, all over the country and only for new drugs If yes, on what criteria are negotiated the prices? By active substance by product, by therapeutic indication If yes, which actors are involved in the mechanism of calls for tender Health insurance funds and industrialists of the medicine Discussions concerning the implementation of a system of calls for tender Yes, at the government level Yes, at the level of the compulsory health insurance and of the parliament Yes, at the local health authorities (21 regions) Yes, in government and health insurance funds Source : Observatoire du médicament, FNMF à partir des données EGA 2011, AIM 2012, ESIP 2012  Marketing Authorization/Clinical trials Any drug, to be marketed, must obtain a Marketing Authorization13 . For this, the applicant must file an application with the competent health authorities, that is to say, the National Security Agency for Drugs and Health Products, as part of a national procedure or the European Medicines Agency (EMA), as part of a European procedure. The format of the Marketing Authorization application is standardized internationally (Europe, USA and Japan), which is why it is called "Common Technical Document" (CTD). It includes five modules: Module 1: Administrative Information Module 2: Summary of module 3, 4 and 5 Module 3: Chemical and pharmaceutical data on the quality of the active substance and the finished product (Physico-chemical data of the active substance, control, packing and stability of the active substance and the finished product) Module 4: Safety data (toxicological data on the basis of non-clinical reports) Module 5: Data on the efficacy of the drug from the results of clinical studies on humans 13 http://ec.europa.eu/health/authorisation-procedures_en.htm
  26. 26. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 26 Table 4: Comparison of the marketing authorization between generics and originators Comparison of the contents of the file of the demand of marketing authorization File of the demand of marketing authorization Originators Generics Module 1 Administrative Information Yes Yes Module 2 Summary of Module 3, 4 and 5 Yes Yes Module 3 Quality (manufacturing process) Yes Yes Module 4 Safety (non-clinical studies) Yes Not required Module 5 Efficacy (clinical studies ) Yes Bioequivalence Study So, generic medicines, in support to their file of demand for marketing authorization, are dispense of producing the results of clinical study demonstrating the efficiency of the active ingredient, but they have to demonstrate their bioequivalence14 in regards to the reference medicine. For Professor Donald J. Birkett15 , “two pharmaceutical products are bioequivalent if they are pharmaceutically equivalent and their bioavailabilities (rate and extent of availability) after administration in the same molar dose are similar to such a degree that their effects, with respect to both efficacy and safety, can be expected to be essentially the same. Pharmaceutical equivalence implies the same amount of the same active substance(s), in the same dosage form, for the same route of administration and meeting the same or comparable standards.” B. Biosimilars The concept of a “similar biological medicinal product” was adopted in EU pharmaceutical legislation in 200416 and came into effect in 2005. The first biosimilar medicine was approved by the European Commission in 200617 . A biosimilar18 medicinal product is a biological medicine which is similar to another biological medicine that has already been authorized for use, the “reference medicinal product”. 14 Guideline on the investigation of bioequivalence- London, 20 January 2010- European Medicines Agency 15 http://www.australianprescriber.com/magazine/26/4/article/712.pdf 16 Directive 2001/83/EC, as amended by Directive 2003/63/EC and Directive 2004/27/EC 17 Biosimilars Marketing Authorisation status as of January 2013: 22 Marketing Authorisation Applications 18 http://www.ema.europa.eu/ema/index.jsp?curl=pages/special_topics/document_listing/document_listing_000318.jsp
  27. 27. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 27 The EU is the first region in the world to have set up a legal framework and a regulatory pathway for “similar biological medicinal products”, more commonly called “biosimilars”. The EU regulatory framework inspired many countries around the world e.g. Australia, Canada, Japan, Turkey, Singapore, South Africa, Taiwan, USA etc. as well as the World Health Organization (WHO). Graph 2: The life cycle of biosimilars A biosimilar drug has a particular life cycle with mainly two steps. The first one is to obtain the Marketing Authorization. For this, biosimilars drugs need to do comparative studies contrary to the originators which need clinical study. The aim of these studies is to show that the medicine is similar to the reference medicine and does not have any meaningful differences from the reference medicine in terms of quality, safety or efficacy. The second step is the launch of the biosimilars drugs, having a CCP will increase the protection of the originators by 5 years and delay the Generic entry. The aim of this part is to have a general overview of the regulation of biosimilar drug, in four countries: France, Italy, United Kingdom and Germany. In terms of regulation, 5 key points have been and are still much debated: naming, labelling, switching/substitution, quotas/tenders and clinical trials/extrapolation. We will discuss those points.
  28. 28. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 28  Naming As required by EU law19 , every medicine will either have an invented (trade) name, or the name of the active substance together with the company name/trademark. The World Health Organization (WHO) suggests that the current system for choosing INNs remain intact, but that a four-letter code would be attached at the end of every drug name. The WHO says the approach, which would apply retroactively, would be voluntary. The code20 will consist of four letters and each code issued will be assigned randomly. The choice of letters used will be made to facilitate transliteration into various languages and to avoid meaningful or inappropriate words being used. The use of four letters offers more than 160 000 codes (204 ). This is expected to provide sufficient flexibility for the foreseeable future. (Biological Qualifier code = BQ code)  Labelling The European Medicines Agency approaches on biosimilar labelling21 requiring the label of the biosimilar product, which describes its medical use. It isto be consistent with the label of the reference product.  Switching/ Substitution The substitution22 is a practice of dispensing one medicine instead of another equivalent and interchangeable medicine at the pharmacy level without consulting the prescriber. The automatic substitution refers to the practice whereby a pharmacist is obliged to dispense one medicine instead of another equivalent and interchangeable medicine due to national or local requirements (without consulting the prescriber). Some physicians23 can decide to exchange one medicine for another medicine with the same therapeutic intent for patients who are undergoing treatment. This is known as 19 Individual case safety report: Article 28 of Commission Implementing Regulation (EU) No 520/2012 of 19 June 2012 20 Biological Qualifier An INN Proposal-July 2014- World Health Organization, Geneva 21 http://www.gabionline.net/Biosimilars/Research/Improved-labelling-sought-for-biosimilar-acceptance 22 EC consensus paper 2013- What you need to know about Biosimilar Medicines 23 European Commission consensus paper 2013 : What you need to know about biosimilar medicines
  29. 29. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 29 switching. In hospitals, decision is made by a multidisciplinary team always including the clinical community (therapeutic/formulary committee). Each country in Europe has it is his position on substitution 24 (See Table 5). Table 5: Comparison between countries in term of quotas and substitution United Kingdom Substitution is not authorized by the law France Substitution with biosimilar unauthorized (art 5121-1 of the Public health code), possible for naïve patients. Italy The Italian Agency of medicine (AIFA) does not recommend the substitution with biosimilar in pharmacies. Germany The biosimilar are not considered as generic medicines. The substitution is possible between biosimilar containing the same active substance and made according to the same process. Quotas for biosimilars use for physicians and sickness funds Example: Bremen where prescribing quotas have been agreed and where biosimilars now account for 70% of the market.  Clinical trials/ Extrapolation Biopharmaceuticals are often used in more than one therapeutic indication. Extrapolation of clinical efficacy and safety data to other indications of the reference medicine that are not specifically studied during the clinical development of the biosimilar medicine is possible based on the overall evidence of comparability provided from the comparability exercise and with adequate scientific justification. This includes at least one clinical study in the most sensitive patient population25 . The EMA guidance says, "If biosimilarity has been demonstrated in one indication, extrapolation to other indications of the reference product could be acceptable with appropriate scientific justification (e.g., clinical experience, available literature data, whether or not the same mechanisms of action or the same receptor(s) are involved in all indications.) Whether extrapolation to multiple indications is acceptable (or not) is decided on a case-by- case.”  Marketing authorization The legal and regulatory pathway for approval of biosimilar medicines is different from generic medicines. Since 1995, all biotechnology-derived medicines must be assessed centrally by the European Medicines Agency. In the case of a positive scientific opinion adopted by the scientific committee, the European Commission makes a formal decision for 24 http://gabionline.net/Biosimilars/General/Germany-wants-to-increase-biosimilars-penetration 25 http://gabionline.net/Biosimilars/Research/Extrapolation-for-biosimilars
  30. 30. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 30 marketing. Since 2003 a specific legal and regulatory pathway exists for the development and approval of biosimilar medicines. The general principles of drug development and review by the European authorities apply to biosimilar medicines in the same way as to the reference biological medicines. For biosimilar medicines, the company needs to carry out studies to show that the medicine:  Is similar to the reference medicine;  Does not have any meaningful differences from the reference medicine in terms of quality, safety or efficacy. The format of the Marketing Authorization includes five modules: Module1: Administrative Information Module2: Summary of module 3, 4 and 5 Module3 (Chemical and pharmaceutical data): The quality of the product from biosimilar manufacturing process should be compared with the reference product. Module 4 (non-clinical reports): Biosimilar safety and toxicity should be compared to the reference product on the basis of in vitro and in vivo studies (pharmacodynamics and pharmacokinetics). Module 5 (reports of clinical studies): The effectiveness of the biosimilar should also be demonstrated on the basis of comparative studies in relation to the reference product26 . The studies are comparative. They do not aim to demonstrate the quality, safety and efficacy of biosimilar, but to demonstrate that these three parameters are similar to those of the reference product. Table 6: Comparison of the market authorization between originators, generics, and biosimilars File of the demand of AMM Originators Generics Biosimilars Module 1 Administrative Information Yes Yes Yes Module 2 Summary of Module 3, 4 and 5 Yes Yes Yes Module 3 Quality (manufacturing process) Yes Yes Comparative studies Module 4 Safety (non-clinical studies) Yes Not required Comparative studies Module 5 Efficacy (clinical studies ) Yes Bioequivalence Study Comparative studies 26 Directive 2001/83/CE du parlement européen et du Conseil du 6 novembre 2001 instituant un code communautaire relatif aux médicaments à usage humain
  31. 31. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 31 We have clear difference in term of marketing authorization between originators, generics and biosimilars (see table 6). Table 7: Comparison of difference and common points between biosimilars and generics KEY POINTS DIFFERENCE IDENTICAL Naming x Labelling x Substitution x Quotas and tenders x Marketing authorization x The table 7 shows us the main differences in term of regulation between generics and biosimilars which, but we have a common point between those drugs which is labelling. 2. MARKET TRENDS A. Generics Globally, there are eight major world markets27 : The United States, Germany, France, United Kingdom, Canada, Italy, Spain and Japan. They represent 84% of global sales. The United States is the largest generics market in the world with 42% of global sales. In those countries, the generic drug plays a major role in controlling health spending, balance and survival of social protection models. In developing countries, this helps people to have access to healthcare because the price of the generics drugs is less expensive. The European market28 for generics varies from a country to another, this is due to:  The maturity of the market  The generic definition  The incitement mechanism  The organization 27 Where the opportunities are and what role will they play? EGA Lisbon 2011-IMS 28 http://healthcare.blogs.ihs.com/2012/01/06/generic-drug-price-trends-france-germany-italy-spain-uk/
  32. 32. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 32 A Global analysis finds that the market earned revenues is $123.85 billion in 2010 and will reach $231.00 billion in 2017 at a compound annual growth rate of 9.29 per cent from 2011-2018. (The United States, Europe (Germany, the United Kingdom, France, Spain, and Italy) and Asia (India and China)). Graph 3: The Generic market share in Europe Source : IMS Health Table 8: Ranking of generics market Country Ranking United Kingdom 1st Germany 2nd France 3rd Italy 4th  United Kingdom The generics market in the United Kingdom is the first largest generic market, after the United States. It is the most mature market with over 60% market share by volume for generics. The United Kingdom29 has a competitive, multi-source generic market which keeps medicine prices at the lowest level in Europe. Generic competition - that occurs when a branded product loses its patent protection – reduces prices by 90%. The onset of generic competition also drives innovation because the originators know that their products will eventually face generic competition leading to a significant fall in sales and income, they need to research new medicines. 29 http://www.britishgenerics.co.uk/about-generics/the-generics-industry
  33. 33. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 33 Each year nearly three quarters of prescriptions in England and Wales are met by generic products, saving the NHS (National Health Service) more than £11billion. The British Generic Manufacturers Association (BGMA) represents the interests of UK-based manufacturers, suppliers of generic and biosimilar medicines. BGMA promotes the development, understanding of the generic and biosimilars medicines industry in the United Kingdom.  Germany The German generic market is the second largest market in the world, with over 60% market share by volume for generics. The prices of generic drugs are on average 71% lower than those of their originators. In Germany, generics companies cover almost 75 percent of the total drug needs30 for the care of patients. For 100 patients treated with medication, 75 patients used generic products. Progenerika is the association for generics and biosimilars producers in Germany.  France France is considered as a market that has not optimized its generic development potential, which exceeds 40% market share in volume, but still below the world average31 . Table 9: Evolution of pack of drugs from 2002 to 2013 Generics in France Year Number of pack of drug 2002 1 pack medicine on 20 2012 1 pack medicine on 4 2013 1 pack medicine on 3 The generics market prescribed and refundable Year Number of pack (Million packs) 2012 675 2013 785 In 2013, the savings from generics32 represent more than € 2.4 billion. Since 2000, cumulative savings are more than € 15.5 billion. This is due to the price of the generics which are 75% to 80% lower than the Originators. According to the GEMME growth of 4% is expected for 2014. GEMME is the association for generics drugs, but it is also the Association of biosimilars drugs. 30 http://translate.google.fr/translate?hl=fr&sl=de&u=http://www.progenerika.de/&prev=search 31 Rapport 2012 sur les médicaments génériques- Mutualité Française 32 http://www.medicamentsgeneriques.info/le-medicament-generique/chiffres-cles/
  34. 34. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 34  Italy Italy is considered less active from the point of view of generic penetration with over 30% market share by volume for generics. The prices of generic drugs are on average 56% lower than those of their originators Assogenerici (National Association of Industries Drugs Generic) is the official representative body of the industry of generics and biosimilars in Italy, at the forefront in providing medicines at affordable prices and high quality to millions of citizens. Also helps to stimulate competition and innovation in the pharmaceutical sector. Table 10: Example of Generics companies in Europe33 N° Company N° Company 1 CRISTERS 10 SANDOZ 2 ZENTIVA 11 MEDIS 3 VENIPAHRM 12 EG LABO 4 SUBSTIPHARM 13 HOSPIRA 5 ARROW 14 H2PHARMA 6 ZYDUS 15 DELPHARM 8 RANBAXY 16 BIOGARAN 9 TEVA LABORATOIRES B. Biosimilars The biological drug market is very important in the pharmaceutical market and represents a growing share of drug spending for health care systems34 : In the world:  170 billion euros in 2014;  250 billion euros in 2020;  200 currently available drugs;  30% of the pharmaceutical pipeline (900 products in development).  More than 25% of health expenditures;  7 of the top 10 drugs most expensive drugs for the health system;  3 years of patent losses on drugs representing over 1 billion € of annual health expenditures (oncology and autoimmune diseases). 33 http://www.egagenerics.com/index.php/about-us/members 34 Colloque du 2 octobre 2014 – médicaments biosimilaires : enjeux et perspectives- GEMME BIOSIMILAIRES
  35. 35. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 35 In this context, biosimilar medicines are a critical issue for the future of our healthcare system and allow:  Maintaining a high level of patient access to advanced treatments  Finding savings to finance the innovation in health. The EU presents the most advanced market for biosimilars, accounting for 80% of global spending on these molecules. 19 biosimilars are authorized in Europe and they represent 6 actives substances35 (see Table 10). Table 11: List of currently EU approved biosimilar medicines in 201436 In Europe: Biosimilars of Filgastrim are used more than the reference product (Neupogen), allowing more patients to benefit at lower costs. The savings achieved through the use of filgrastim biosimilar is estimated at € 318M since 200937 . 35 http://www.gabionline.net/Biosimilars/General/Biosimilars-approved-in-Europe 36 Source: EMA (June 2015) 37 Colloque du 2 octobre 2014 – médicaments biosimilaires : enjeux et perspectives- GEMME BIOSIMILAIRES
  36. 36. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 36 In Germany: EPO biosimilars represent 57% in value of the EPO market, € 551M of savings was achieved through the actions of the authorities and to greater competition. In The United Kingdom: Biosimilar filgrastim represents about 90% of filgrastim volume. In term of volume and value market for biosimilars in Europe, Germany is the first, followed by other countries38 (See table 11). Table 12: The biosimilars market in volume and value in 2011 Countries Sale in volume (M) Sale in value ( M€) Germany 6,1 68 France 2,7 40 Italy 2,5 22 UK 0,5 19 From the launch in 2007 to 2011 the market share of biosimilar has increased in Europe and represents 11% of total biologics sales. This market will grow as the patent for several biological medicines will expire over the next 5 years. Graph 4: The biosimilars market evolution from 2010 to 2020 worldwide Source: IMS Health 38 Shaping the biosimilars opportunity-december 2011
  37. 37. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 37 The biosimilars market will increase in the future, (multiplied by 10) and the American market will be an important driver (See Graph 4). The overall penetration of biosimilars within the off-patent biological market is forecast to reach up to 50% by 2020, assuming a price discount in the range of 20-30%. With sales for the top 50 pharma39 companies forecast to decline by 1.6% during 2010–16, many leading drugmakers are looking to expand into markets that offer long-term growth, limited competition, and are relatively low risk. One such area is biosimilars, attracting both innovative biologics players and generics players alike. Currently, Sandoz is the leader of the world market with 51 % of market shares in 2011. Teva (25 %) and Hospira (17 %) are behind (See Table 12). Table 12: Example of biosimilar companies Example of biosimilar companies Accord healthcare Mylan Gedeon Richter Infarco/Cinfa Biotech S.L. Fresenius Kabi Hospira TEVA Europe EGIS Stada International GmbH Sandoz Boehringer Ingelheim Polpharma Actavis Manufacturing biosimilars40 is expensive and the uncertainties on return on investment as well as regulatory requirements slow down the enthusiasm of pharmaceutical companies to engage into the production.  Development of a biosimilar drug: 5-7 years  Development costs: between 200 and 300 million dollar Table 13: Comparison of difference and common points between biosimilars and generics KEY POINTS DIFFERENCE IDENTICAL The leading countries x Market value x Number of product x Production cost x 39 Biosimilars:Market Entry Strategies- Leading pharma companies tap into biosimilars- December 2011-Datamonitor 40 Colloque du 2 octobre 2014 – médicaments biosimilaires : enjeux et perspectives- GEMME BIOSIMILAIRES
  38. 38. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 38 In term of market trends, we don’t have common points between biosimilars and generics (See table 13). One of the reasons to this situation is the difference of maturity between those two markets.
  39. 39. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 39 THIRD PART: RESULTS AND ILLUSTRATION
  40. 40. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 40 Summary Those interviews help us to have the position of authorities, national and European pharmaceutical unions, learning societies and patient associations in four European countries more precisely in France, Germany, Italy and United Kingdom. We have a global consensus between actors on topic like naming, role of regulation, substitution, market share, evolution of price of the originators and biosimilars. Position a more different between actors on regulatory issues like summary of product characteristics and extrapolation. Concerning the levers a originators producer can put in place to face the biosimilars competition and maintain his position, benchmarking on biosimilars, generics (13 companies from 2000 to 2015) and the results of our interview allow us to observe 10 levers:  Price  Prescription  Patent  Market saturation  Legal action  New market  Cooperation  Environmental strategy  Product  Brand strategy
  41. 41. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 41 III.RESULTS AND ILLUSTRATION 1. RESULTS All the interviews we made in France, Germany, United Kingdom and in Italy helped us to bring an answer to our interrogations. Q1: Comparison between biosimilars and generics in terms of regulation, market penetration and sales. 75% of respondents tell there is no comparison possible between biosimilars and generics. For them, the biosimilars differ in the complexity of the manufacturing process and the inherent variability in the biological systems used. They are large complex molecules rather than small simple molecules. This means that they are medicines in their own right and cannot be automatically substituted for a reference product. Moreover, biosimilars and generics have different approval systems, generics are mainly approved by national authorities and biosimilars are approved by the centralised procedure. The requirements are also different, for the approval of generics the documentation of the quality is sufficient and only for some generics, depending on the requirements in each member state, bioequivalence studies are required. For biosimilars, the documentation of quality preclinical and clinical studies are requested and need to demonstrate clinical safety and efficacy. The common point between biosimilars and generics is only the drop in drug prices for 25% of the respondents. Graph 5: A comparison between biosimilars and generics 75% 25% No comparison Comparison
  42. 42. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 42 Graph 6: A comparison between biosimilars and generics: country level The graph 6 shows us that in all countries we have the idea of comparison between biosimilars and generics. This is a result of difference of position between national unions and also learning societies. National and European authorities, patient association and learned societies in the four countries all agree on the absence of comparison on this two types of drugs. Q2: The role of regulation in the European market for biosimilars The pharmaceutical industry is one of the industries where regulation is the most complicated. For 91% of the professionals surveyed, as part of biosimilars, it will have a very important role. It should allow to build a favorable environment for the production of biosimilars. The role of the EU regulator is to ensure that only drugs with a sufficient evidence base for safety and efficacy enter the EU market and that they have a suitable post marketing surveillance in place. The regulation is therefore essential and State must establish regulations in line with the objectives. 9% of our panel thinks that the offer of biosimilar on the market will have an important role in the development of biosimilars not the regulation. 30% 15% 30% 24% 70% 85% 70% 76% 0% 20% 40% 60% 80% 100% France Italy Germany UK Comparison No comparison
  43. 43. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 43 At the national level, the repartition on this topic is this one: Graph 7: The role of regulation: country level Some learning societies in France think that the role of regulation is not important; it is the type of biosimilars on the market which will be important. National and European authorities, patient association and unions want to build a clear regulation and think that regulation is the most important element in France, Italy, Germany and United Kingdom. Q3: The naming system of the World Health Organisation on biosimilars with a four- letter code (BQ) at the end of the name (for instance: epoetin alfa bbbb) The name of a medication is an important element. It allows their differentiation and reassures patients. Regarding biosimilars, the World Health Organisation has chosen to develop a four-letter code (BQ) at the end of the name. The use of a four letter code (BQ) at the end of the name is a good idea for 62 % of the panel. The BQ could serve as a tool for identification and traceability. 37% of the respondents think that the approach of the World Health Organization is not the good one. For them the EU has a robust pharmacovigilance system, product identification for biologicals is well ensured in the EU, and hence there is no need for the BQ as additional tool. Moreover, this additional voluntary codification (i.e. the BQ scheme) could give the perception of important differences between a biosimilar and its reference product, leading to confusion and consequent impact on prescribing practices. 14% 0% 0% 0% 86% 100% 100% 100% 0% 20% 40% 60% 80% 100% France Italy Germany UK No important role Important role
  44. 44. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 44 The BQ scheme should not be introduced where things work well, but only where it provides a demonstrable added value. Graph 8: The naming system of the world health organization Our results at a national level show us that it is difficult to find a consensus between countries on this topic. Graph 9: The naming system of the world health organization: country level In France, national unions are against this approach contrary to patient associations and learning societies which think that this approach is the right one. In the United Kingdom, for learning societies the naming system of the world health organization is not the right approach, contrary to the national authorities which see this like a good evolution. 38% 63% Right approach Wrong approach 25% 0% 100% 50% 75% 100% 0% 50% 0% 20% 40% 60% 80% 100% France Italy Germany UK Right approach Wrong approach
  45. 45. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 45 Q4: The summary of product characteristics (SmPC) of a biosimilar Instructions accompanying medication provides important information for its proper use and for patient safety. 58% of the interviewees think that the Summary of Product Characteristics (SmPC) for a biosimilar should be closely aligned to its reference product, similarly to what is done for generics. Moreover, there are no clinically meaningful differences between the biosimilar and the reference product. This approach is not appropriate for 42% of the professional of our panel, some believe that a two column table (one reference and the other biosimilar) for each topic (posology, side effects, composition of the drug) will be of help and allow comparison. For them, there are examples where the wording of SmPC sections for a biosimilar and its originators product are identical and respondents believe the Summary of Product Characteristics (SmPC) should clearly show where information was obtained from either from studies investigating the biosimilar product or where the data was derived from evidence about the originators product. At a national level is also difficult to find a consensus on this topic between actors in the same countries or not. Graph 10: The SmPC of a biosimilar: country level 75% 0% 100% 30%25% 100% 0% 70% 0% 20% 40% 60% 80% 100% France Italy Germany UK Identical SmPC Different SmPC
  46. 46. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 46 Globally we don’t have the same position between learning societies in France, Germany, United Kingdom and Italy and also between national unions in those countries. European pharmaceutical unions think that the SmPC must be identical between biosimilars and originators. In France, we have a different position between learning societies as some of them want the same SmPC between biosimilar and originators other would like different approach. For patient associations and national unions the SmPC can’t be different. Learning societies and national unions in the United Kingdom don’t want the same SmPC between originators and biosimilars, contrary to national authorities. Q5: The extrapolation of biosimilars Some reference products already commercialised are used in several therapeutic indications. Only 67% of the respondents think that biosimilars can be used in several indications like the reference product for many reasons. First, the European Medicines Agency gives the Marketing Authorization and on the Marketing Authorization you have the therapeutic indications for each drug. If a product has a Marketing Authorization then it must have the same system of reimbursement than the reference product. Moreover, when biosimilar comparability has been demonstrated in one indication, extrapolation of clinical data to other indications of the reference product could be acceptable and there is no logical reason not to extrapolate the evidence to the same indications as that of the reference product. 33% of the interviewees see this approach as not appropriate. For them, as biosimilars are not identical to the originators, being derived from different cell lines and through different manufacturing processes, it cannot be assumed that they will automatically show the same safety and efficacy in all indications as the originators. Therefore it is well accepted by regulators that extrapolation of indications should be considered on a case by case basis. Furthermore, to maximise the savings in the long term healthcare professional need to be very vigilant and react quickly if any problems occur. That is why clinical studies by indication should be made.
  47. 47. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 47 Graph 11: The extrapolation of biosimilars Graph 12: The extrapolation of biosimilars: country level At the European level, unions of the biosimilars producer agree on the necessity of extrapolation. Clear difference of position between unions of biosimilars and originators in France, Germany, Italy and United Kingdom. For originators representatives, extrapolation of indication must not be allowed to the biosimilars, interviewees want more clinical studies. Contrary to unions, learning societies show us a global consensus on the necessity to give extrapolation of indication to biosimilars in the four countries. In France, patient associations are the most against extrapolation of indication for biosimilars. 67% 33% Extrapolation No extrapolation 75% 40% 60% 70% 25% 50% 40% 30% 0% 20% 40% 60% 80% France Italy Germany UK Extrapolation No extrapolation
  48. 48. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 48 Q6: The substitution of biosimilars by pharmacist For 11% of our panel if the reglementation allows the presence of biosimilar in town then the pharmacist must have the right of substitution, if it is permitted by the regulation. 89% of the interviewees have another approach on this topic. The substitution by the pharmacist is not the priority axis for them. The development of biosimilars will be better with physicians, creating a relationship of trust between patient, doctor and pharmacist is the priority. State must establish the medical record for tracking the prescription of patients at least on 5 years in pharmacy. It would possibly allow to set up the substitution in the case of biosimilars. Furthermore, as biosimilar and biological reference medicines are similar but not identical, the decision to treat a patient with a reference or a biosimilar medicine should be taken at least not without the agreement of a qualified healthcare professional and the patient. Graph 13: The substitution of biosimilars: country level In Italy, Germany and United Kingdom all actors are all against substitution by pharmacist. Learning societies in France are favorable for the right of substitution. 17% 0% 0% 0% 83% 100% 100% 100% 0% 20% 40% 60% 80% 100% France Italy Germany UK Substitution No substitution
  49. 49. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 49 Q7: The set-up of quotas or call for tender for biosimilars The quotas solution is the optimal solution for 64% of the respondents. They think that this will ensure an increase in the penetration of biosimilars. Quotas promote penetration of biosimilars in volume and call for tenders allow a reduction of costs. All this will help to reduce health system cost. The other part of our panel find this approach inappropriate, 36% are against quotas but for a financial incentive establishment for physicians when prescription is made. Moreover, in some countries like France the tradition is not to put in place quotas contrary to Germany. Tenders which are undertaken involving biological medicines should not seek to source a single product only. It has to be a solid scientific approach, initiative and the prescribers must have the choice and make their decision on medical grounds with the patient. At a national level between countries we don’t have a consensus on this question. But Germany seems to be the most favourable for this approach for biosimilars (see Graph 14) and the quotas are set up by the Kassenärztliche Vereinigungen. This is a body jointly built up for each region in Germany by the compulsory health insurances and the medical doctors working on a contract with the Kassenärztliche Vereinigung. This body is responsible for covering the ambulatory healthcare in this region. Call for tender is used by the owner of the hospital. Graph 14: Quotas or tenders for biosimilars: country level In France, patient association are favourable to quotas and tenders. For learned societies and national unions it is more difficult to have a clear picture. Some learned societies and unions are favourable order are against. 50% 0% 100% 66% 50% 100% 0% 30% 0% 20% 40% 60% 80% 100% France Italy Germany UK Yes No
  50. 50. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 50 In the United Kingdom, the positions of actors are clearer than in France, national unions and authorities are favourable for quotas and tenders. Learned societies are opposed. Q8: The Biosimilar’s market share in volume and value For all the interviewees the share of biosimilars will increase in volume and value in the coming years. But it is very difficult to have a clear prediction about this evolution. In term of volume this market will represent 35% in 2015 and reach 45% in 2020. On the world scene the biosimilars market accounted for $ 1.3 billion of which 80% in Europe in 2013. The value of this market will also increase from $2 billion in 2015 to $15 billion in 2020 (See Graph 15 et 16). Graph 15: Evolution of biosimilars market share in volume-Europe For example, in France the central purchasing agency for the Assistance Publique - Hôpitaux de Paris had decided to buy Inflectra after the company offered a discount of 45 percent (Inflectra is the biosimilar version of infliximab from Hospira) Graph 16: Evolution of biosimilars market share in value-Europe 35% 45% 0% 20% 40% 60% 2015 2020 $2 $15 0 3 6 9 12 15 2015 2020 Billion$
  51. 51. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 51 Q9: The Evolution of biosimilar and originators manufacturing price The introduction of the biosimilars will have an impact in the manufacturing price of originators. All the respondents think that in the coming years the price of originators and biosimilars will decrease. The price reduction for the originators will range from -8% in Year 0 (Year 0 = Year of loss of the originators’ patent) to -15% in year 5 (five years after the loss of patent). This is the retail discount, for the hospital the reduction is from 30% to 45% (See graph 17). The biosimilar will have a more important decrease of price from -25% (Year 0) to -50% in year 5(graph 18). Graph 17: Evolution of retail originators manufacturer price after the introduction of biosimilars Year 0 = Y = Year of loss of the originators’ patent Graph 18: Evolution of hospital manufacturing price for biosimilars Year 0 = Y = Year of loss of the originators’ patent -8% -10% -15% -16% -13% -10% -7% -4% -1% Y 0 Y 2 Y 5 -25% -30% -50% -55% -35% -15% Y 0 Y 2 Y 5 0
  52. 52. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 52 Moreover, before the arrival of a biosimilar on the market, an originators may already have made a price cut that is between 10 and 15%. So the price cut of 20 to 30% of biosimilars is observed on the market is made on the new price of the originators. In reality, we have a price reduction of 30-45% compared to the originators. Q10: The leadership position of originators medications For all of our panel market share of original medicines will decline, but the magnitude of the decline will depend on several factors:  The regulation of biosimilars, if we have a favorable regulation of biosimilars, then it will encourage the penetration of biosimilars.  Adaptability of pharmaceutical companies, adaptation to the price of biosimilars and adaptation to the central issue of substitution.  The last factor is the trust that the doctors give to original medicines. But if biosimilars significantly reduce costs and prove themselves scientifically then confidence can and could change. Pharmaceutical companies will maybe change strategy and move towards marketing investments, because they are not going to do research so that other laboratories take advantage by making biosimilar. All this result show us which regulation could change the development of biosimilars. Knowing that these actors which respond to our questions are the users, the prescribers and regulatory authority of the biosimilars, regulation needs to be in concordance with their willing, to facilitate the acceptance, the prescription of this new type of drug. Therefore their penetration in those four different markets: France, Germany, United Kingdom and in Italy.
  53. 53. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 53 2. STRATEGIC POSITIONING FOR THE ORIGINATORS MANUFACTURERS This part will focus on the strategy we have observed a manufacturers of originators can use to keep the place of his medicine with the arrival of biosimilars. We will base our thinking on three elements:  Benchmarking on the experience of pharmaceutical company with generics  Benchmarking on the experience of pharmaceutical company with biosimilars  The results of our interviews In 2014, the global pharmaceutical market grew by 8.8% compared to 2013, exceeding 1,000 billion US dollars41 . In 2018, the annual growth rate should be approximately + 4% to + 7%. This return to growth is related to the passage of the period of significant losses of patents. « The exposure of pharmaceutical company in the losses of patents in the developed countries is less strong over the period 2014/2018 than over the period 2009/2013,which was characterized by the loss of many patents in 2012 » explains Stéphane Sclison, strategy director Imshealth. It is therefore relevant to observe originators producers’ strategic move to face patent loss. A. Benchmark on Generics i. Context This wave of patent loss has allowed the development of new generic drugs. A Global analysis finds that the market earned revenues is $123.85 billion in 2010 and will reach $231.00 billion in 2017 at a compound annual growth rate of 9.29 % from 2011-2018. The entry of generics has had huge impact in particular on the price of medecine or the turnover of some pharmaceuticals companies. For example, in Germany the prices of generic drugs are on average 71% lower than those of their originators and in France it’s about 75% to 80%. To face this upheaval of the landscape of the medicine, producers of originators have set up various strategies. For our benchmark we observe action of 11 companies from 2000 to 2015 (See table 14) 41 IMShealth-Information presse-Jeudi 12 mai 2015
  54. 54. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 54 Table 14: Sample of the benchmark in US and EU Company Product Glaxosmithkline Augmentin, Paxil, Amoxicilline Lilly Prozac Hoechst Cardizem Servier Périndopril Merck & Co Claritin Fournier Lipanthyl Astrazeneca oméprazole Merck-Lipha Glucophage MSD Inegy, Zocor Pfizer Gabapentine Bristoll Myers Squibb Buspirone Teva Simvastatine
  55. 55. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 55 ii. Action of the manufacturers of originators Our benchmarks help us to identify 7 levers; that we can use individually or combine them. Graph 19: The 7 levers of originators to face Generics Price The price reduction of the originators at the level of the price of the generic medicines can allow to keep the advantage acquired by the brand and to preserve a part of his market. This policy is only relevant when demand is price sensitive. The impact of the strategies of companies differs according to market conditions. We thus notice a particular evolution of markets upon the arrival of the generic medicines.  A originators would have many generics when his sales and price are high.  The evolution of the price of the originators depends on the sensitivity of demand to the price of the product. 7 Levers Price Patent Legal Action CooperationProduct Market Saturation Prescription 1 3 4 5 6 7 2 1
  56. 56. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 56  The falling price of the originators or the production of generic by the producer of originators limits the penetration of generic competitors on the market. For example, in 2006, Merck&Co reduce the price of his product Zocor to face the competition of generics (see Graph 20) Graph 20: The price evolution of Zocor and Simvastatine teva over 2006-2015 in France From 2006 to 2015, the price of Zocor42 lost 77 euros and Simvastatine Teva43 52 euros. The Graph 20 clearly shows us that Merck&Co always wanted to adapt its price to the price of Simvastatine teva. Patent Early in the life cycle of the drug, patent protection is the major tool to counter the entry of generic. To increase its protection, the laboratory puts down, after the discovery of the molecule, a whole series of patents: patent on the molecule, on indications etc. The multiplicities of patents, as well as their spreading in time, allow the laboratory to make more complex the identification of the valid patents by the potential producers of generics and to lengthen the period of exclusivity covered by patents. GlaxoSmithKline (GSK), for example, filed four new patents for Augmentin in 2000 in the United States, two years before the expiration of the first patents. 42 http://www.codage.ext.cnamts.fr/codif/bdm_it//fiche/index_fic_medisoc.php?p_code_cip=3400937749206&p_site=AMELI 43 http://www.codage.ext.cnamts.fr/codif/bdm_it//fiche/index_fic_medisoc.php?p_code_cip=3400937290265&p_site=AMELI 76 € 76 € 65 € 62 € 43 € 36 € 27 € 24 € 118 € 118 € 106 € 101 € 65 € 65 € 44 € 41 € 0 20 40 60 80 100 120 2006 2007 2008 2009 2012 2013 2014 2015 SIMVASTATINE TEVA 40 MG ZOCOR 40 MG 2
  57. 57. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 57 Legal action The legal battles between producers of originators and manufacturers of generics are the most media. The first ones accused the second of violating unexpired patents or dispute the bio-equivalence claimed by generic companies. The action44 of justice for violation of the patent has for consequence the suspension of the marketing of the generics medicines. It allows big laboratories to win some invaluable weeks of exclusivity on the market. For example: GSK has filed several lawsuits for violation of patents of Paxil in the US and Lilly sued generic makers of Prozac for the same reasons. Cooperation Some pharmaceutical companies have reached financial agreements with producers of generic to postpone competitors launch on the market. For the European Commission, Servier45 had work with 5 generics companies (Niche/Unichem, Matrix ( Mylan), Teva, Krka and Lupin.) to slow down the entrance on the market of generic versions of his medicine, marketed under the name of Coversyl, to handle the high blood pressure and the cardiac insufficiency. The European Commission heavily sanctioned the laboratory Servier with a 331 million euro fine to have hindered the launch on the market of generic versions of its product Product Creation of new formulations and new methods of administration possibly patentable. The laboratory intensely promotes these innovations before patent expiry of the original formulation, so that they supplant in the prescriptions or the consumer habits (eg dispersible Prozac, Prozac Weekly) They developed new dosages containing for example less active ingredient for a similar efficiency (Lipanthyl® 160 mg was placed on the market to replace the Lipanthyl® micronized 200 mg). They make associations of a molecule with another one. For example, in Germany Inegy® combines the active ingredients of Zocor ® (simvastatin) and Ezetrol® (ezetimibe). 44 Les laboratoires pharmaceutiques face à l’arrivée des génériques : quelles stratégies pour quels effets ?- Bulletin d’information en économie de la santé-n° 84 - Octobre 2004 45 http://www.bloomberg.com/news/articles/2014-07-09/servier-to-teva-fined-582-2-million-on-generic-delays 3 4 5
  58. 58. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 58 They developed new products, very close to the initial product and could be replaced. For example: In the case of the oméprazole, the isomeric molecule was launched on the market in the United States two years before the arrival of the generic medicines and allowed AstraZeneca to keep about three quarters of the market which he had in this indication. Market saturation The laboratory can produce itself the generic medicine of one of its originators; like that the company will have many products on the market and would increase its opportunity to sell one product of the portfolio. For example, Merck-Lipha continues to market Glucophage whereas Merck Generics launched on the market a Metformine Merck. Prescription The new European regulations promote this strategy by granting one year additional exclusivity for products that laboratories decided to switch to OTC46 . Pharmaceutical laboratory make the drug available without a prescription and bet on attachment to the brand. The Claritin (loratadine ) medicine of the laboratory MSD became OTC in the United States in November, 2002. Generic version entered on the market in the end of December, 2002. Some companies have combined different types of actions, for example GlaxoSmith- Kline used 3 types of levers patent, legal action and product (See table 15). Table 15: Strategies of pharmaceutical company to protect the place of their medicine47 DCI Laboratory name Patent Legal actions Product Brand Strategy Amoxicilline- acide clavulanique Glaxo Smith-Kline X X X Buspirone Bristoll Myers Squibb X X Gabapentine Pfizer X X X Omeprazole Astra Zeneca X X X 46 Exclusivity Strategies in the United States and European Union by Carolyne Hathaway, John Manthei and Cassie Scherer 47 Les laboratoires pharmaceutiques face à l’arrivée des génériques : quelles stratégies pour quels effets ?- Bulletin d’information en économie de la santé-n° 84 - Octobre 2004 6 7
  59. 59. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 59 B. Benchmark on biosimilars: the case of Neupogen i. Context The EMA has approved 19 biosimilars within the product classes of human growth hormone, granulocyte colony-stimulating factor, erythtropoesis stimulating agent, insulin and tumour necrosis factor (TNF)-inhibitor, for use in the EU48 . The first biosimilar launch in the EU (Omnitrope/Somatropin) occurred in Germany in 200649 . This introduction of the biosimilars on the market has many impacts. For example, biosimilars of filgastrim are used more than the reference product (Neupogen), allowing more patients to benefit at lower costs. The savings achieved through the use of filgrastim biosimilar is estimated at € 318M since 200950 . In this part we will study how the laboratory Amgen, producer of Neupogen responds to the arrival of biosimilars. Amgen is an American company world leader in medical biotechnology industry. It has over 18 000 employees for a turnover of $ 20 billion in 2014 and his headquarter is in California. Amgen has 14 products on different type’s diseases and Neupogen is one of them. The first commercialization of Neupogen in Europe was in 1991 with the collaboration of Roche . In 2008, this blockbuster represented 1,4 billion dollars and according to Symphony Health Solutions, Neupogen had approximately $1,2 billion in sales in calendar year 2014. The time of total exclusivity enjoyed by Amgen for the Neupogen depend on the country51 (Graph 21). 48 http://www.gabionline.net/Biosimilars/General/Biosimilars-approved-in-Europe 49 Sierakoviak and Syed (2009. p.22) claim that Sweden was the first country in the world to grant market approval to a biosimilar medicine in 2007 (Omnitrope, Sandoz). 50 Colloque du 2 octobre 2014 – médicaments biosimilaires : enjeux et perspectives- GEMME BIOSIMILAIRES 51 IMS data
  60. 60. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 60 Graph 21: The duration of market exclusivity for Neupogen Several biosimilars of Neupogen were developed after the loss of patent in European countries (Table 16). Table 16: List of Neupogen biosimilars in 2014 Product name Active substance Therapeutic area Authorization date Manufacturer/Company name Accofil filgrastim Neutropenia 18 Sep 2014 Accord Healthcare Grastofil filgrastim Neutropenia 18 Oct 2013 Apotex Nivestim filgrastim Cancer, Neutropenia Haematopoietic stem cell transplantation 8 Jun 2010 Hospira Zarzio filgrastim Cancer, Neutropenia Haematopoietic stem cell transplantation 6 Feb 2009 Sandoz Filgrastim Hexal filgrastim Cancer, Neutropenia Haematopoietic stem cell transplantation 6 Feb 2009 Hexal Biograstim filgrastim Cancer, Neutropenia Haematopoietic stem cell transplantation 15 Sep 2008 CT Arzneimittel Filgrastim ratiopharm filgrastim Cancer, Neutropenia Haematopoietic stem cell transplantation 15 Sep 2008 Withdrawn on 20 Apr 2011 Ratiopharm Ratiograstim filgrastim Cancer, Neutropenia Haematopoietic stem cell transplantation 15 Sep 2008 Ratiopharm Tevagrastim filgrastim Cancer, Neutropenia Haematopoietic stem cell transplantation 15 Sep 2008 Teva Generics 17 16 7 18 0 4 8 12 16 France Italy Germany UK Numberofyears Years
  61. 61. 2014/2015 – Joseph Pategou | Which regulatory framework could foster the market development of biosimilars in Europe? And which strategic positioning for the originatorss producers? 61 ii. Action of the manufacturers of originators Our benchmark on Neupogen helps us to identify 6 levers: Graph 22: The 6 levers of Neupogen Price When the filgrastim biosimilars enter into the market they provide an average discount of 10.8% in 2008 and 35.0% in 2009. Table 17: Price of biosimilars and filgrastim in 2009 6 Levers Price Patent Legal Action Cooperation Product New Market Price of Biosimilars and Filgrastim in 2009 Countries Type of drugs Price (euro) Italy Biosimilars 70.2 Filgrastim 90.4 UK Biosimilars 70.3 Filgrastim 74.1 France Biosimilars 88.6 Filgrastim 141.8 Germany Biosimilars 123.1 Filgrastim 149.7 1 3 4 5 6 2 1

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