Western European markets for biosimilar and generic drugs

By William Chin, PhD, Project Manager, EUCRAF

Garattini L et al. from the Center for Health Economics, IRCCS Institute for Pharmacological Research 'Mario Negri', Italy, published an article entitled "Western European markets for biosimilar and generic drugs: worth differentiating" on 20 March 2015 issue of the European Journal of Health Economics.

In this editorial article, the authors compared biosimilar and generics in Western European countries based on the commonly utilized business tool of 4P’s  that is made up of the following variable: product, place, promotion and price.

Product: The authors provided a succint differentation between the characteristics of biosimilars and generics have different characteristics: the latter, with their simple chemical structures, are considered identical to their reference medicines. On the other hand, biosimilar is a far more complex molecule and this renders the standard generic approval procedure not applicable for biosimilar.

Place: It was noted that the generics and biosimilars are prescribed and distributed is based on the framework of health care system of the country. Generics are mainly prescribed in primary care by general practitioners whereas, biosimlar is used more by specialists in hospitals.

Promotion: The authors noted that pharmaceutical companies sometimes have an obvious interest in discrediting generics and undermining their credibility among prescribers. Only a few European countries have introduced a budgetary approach aimed at boosting the prescription of cheaper drugs among GPs. The authors felt that as medical consultants and hospital pharmacists in Western EU countries are mostly employees, it would be easier for health authorities to introduce budgetary tools to boost the promotion of biosimilars.

Pricing: The Reference Pricing (RP) scheme is the most common price regulation system in the Western EU countries. In this scheme, a maximum price is set for products containing the same active ingredient so patients have to cover any cost of equivalent products exceeding the RP. Pricing arrangements for biosimilars in the Western EU countries are still not harmonized.

The authors also advocated that health authorities should discourage big pharmaceutical companies of introducing in-patent pharmaceutical forms, just before patent expiries. This so called life-cycle strategy to extend patent protection is seen to undermine price competition by deliberately delayed launches of generics and biosimilars.

Source

1. Eur J Health Econ. 2015 Mar 20. [Epub ahead of print] Western European markets for biosimilar and generic drugs: worth differentiating. Garattini L1, Curto A, van de Vooren K.