Better Access, Better Health A guide to the generic and biosimilars medicines market and pricing

Transcription

1 Better Access, Better Health A guide to the generic and biosimilars medicines market and pricing

2 Section 1: About the BGMA & Generics The British Generic Manufacturers Association (BGMA) is made up of members of the generic manufacturing supply industry, who between them account for approximately 85% of the total UK generic market by volume. A key feature of the strong generics industry in the UK is that it introduces competition to the supply of prescription medicines making them more affordable to the NHS and enhancing their availability to patients. According to NHS figures (NHS Digital), more than a billion items are prescribed generically every year. The increase of generic prescriptions, allied with a reduction in the net ingredients costs, means that overall savings to the NHS medicines bill have now passed more than 13 billion annually. Market Overview Our industry s mission is centred around increasing patient access to life saving and life changing medicines. We do this by bringing competition to the medicines marketplace at the molecule level when patents (and / or any data or market exclusivity) expire. This competition reduces market prices, enhances security of supply, and fosters incremental and primary innovation all of which support increasing patient access. Examples of innovation include new administrations and dosage strengths. The evidence is that this sort of competition controls the price of medicines more effectively than direct intervention. We believe, therefore, that direct price control by the Government should only be employed where competition has been shown to be ineffective. Looking at 40 originator products to come off patent since the start of 2014, the introduction of generics saw sales prices reduce by an average of 89% in this time.

3 Benefits of Generics to the NHS Generic medicines meet the same standards of quality, safety and efficacy as originator brands. It is broadly understood that the significant use of generics within the NHS delivers a range of benefits, including: Cost containment: Competition between multiple suppliers of generic medicines rapidly reduces market prices at patent expiry, frequently by more than 90%. Competition between generics and the equivalent original brands also typically reduces the market price of the originator. Enhanced patient access to treatment: By reducing the drugs bill to this extent, the use of generics by the NHS (a) allows more patients to be treated with the same product for the same cost; (b) creates headroom within the medicines budget to pay for future innovative products and the investment needed to develop them ; and (c) allows the NHS to use the savings elsewhere. Promotion of innovation: By providing competition with the originator s product at expiry of the relevant patents or other exclusivity, generics promote innovation. Without the onset of generic competition, which will significantly reduce the originator s revenue from the product, there would be much less of an incentive on the originator to develop new products which do not face generic competition. Enhanced security of supply: From time to time, all medicines suffer from a shortage of supply due to reasons outside the manufacturer s control: these typically relate to API or other raw material shortages; manufacturing difficulties, including quality concerns; logistical difficulties; or unexpected demand. For the sole supplier of an exclusive (eg, on patent) product, these difficulties will usually have an immediate effect on the manufacturer s ability to supply. In the case of a generic product, there will usually be other suppliers of the same medicine which can make up any shortfall. Twice as many patients treated without an impact on treatment costs Source: IMS MIDAS, MAT Dec Population statistics: WorldBank, Rx, retail, oral molecules ONLY, combinations excluded; Selected therapy areas: Angiotensin II antagonists, anti-depressants, antiepileptics, anti-psychotics, anti-ulcerants, cholesterol regulators and oral anti-diabetics

4 Whilst the cost of a generic is important in delivering some of these benefits (specifically cost containment and enhanced patient access to treatment), all are increased by the volume or market share of generics, and the development of a competitive multi-source market. Restrictions in the market share of generics or the number of manufacturers of a particular medicine threaten the continued development of these benefits. Increased access to medicines Reduction of health inequalities VALUE OF GENERIC MEDICINES Improved medication adherence Positive economic impact

5 Section 2: Effective operation of a sustainable generics market Comparatively high levels of use of generic medicines within the NHS result in very significant savings to the NHS drugs bill. Without those savings, even in normal economic times, the drugs budget could become unsustainable. Generic prescribing has grown substantially over the past 40 years, from less than one in five prescriptions issued in the mid-1970s to more than 80 per cent in recent years. Reports by academics, competition authorities, parliaments and independent commentators establish a range of parameters that should be met to support a sustainable generic industry that makes the maximum societal contribution. These include: The long-term sustainability of the generic medicines sector relies on fair prices and a level playing field, particularly in competition with branded medicines, including originators. A successful generic medicines policy requires both supply-side measures relating to pricing and reimbursement, and demandside incentives for physicians, pharmacists and patients. Significant volumes of generics and multiple suppliers are needed to ensure the maximum benefits for the NHS and patients. The generic medicines industry has to compete on a global scale, which includes competition from manufacturers with facilities outside of Europe. This means that it is important that policies encourage manufacture in Europe. IQVIA data confirms that the average manufacturers selling price in the UK is the lowest in Europe and the US*. This in turn benefits the NHS. However in a global market place, pricing needs to be sustainable to support a competitive and healthy supply of generic medicines to the UK in the future. We need to be careful that continuous, increasing pressure on prices in the UK does not reach a tipping point whereby supplying the UK ahead of other international markets may not considered competitive. * The product sample featured the most expensive generic medicines used in the NHS on a per unit basis as well as the generic medicines with the highest next expenditure in the NHS)

6 Section 3: Generics pricing - How does pricing work? The price paid by the NHS for generic medicines is not that charged by manufacturers but includes distribution costs (which will vary depending on the product type) and the retained margin for community pharmacy (targeted to be 800m per annum). Pharmacy reimbursement price Pharmacy purchase price Manufacturer net selling price Typically, the reimbursement price of a generic medicine listed in Category M of the Drug Tariff may amount to approximately twice (or more) the manufacturer s actual selling price (ASP). England pricing relationships c 800m pharmacy margin 30-35% difference Reports, including those from the OECD; jointly the Institute of Fiscal Studies and the Health Foundation; and the Health Foundation/IFS/ The King s Fund/Nuffield Trust have cited the role of generic medicines in containing the NHS drugs budget and the policies of the Department of Health in increasing generic prescribing and dispensing rates. Notably, the joint study by the IFS and the Health Foundation reflected that: In spite of the volume of prescriptions growing by 4.3% per year in England between 2002 and 2012, the total amount spent on community prescriptions remained flat. This is due to a shift away from branded drugs towards generic ones. This, according to both bodies, has meant that: in primary care, the cost of prescribing items has fallen over time, though volumes have increased. The cost per item has fallen from 15 in 2004 to 9 in 2016 in real terms [a blended branded and generic figure]. The reimbursement price of medicines in Categories A and C are not currently based on actual sales. The Government will have the powers in 2019 to seek actual sales data on all generic medicines.

7 Whilst the average reimbursement price of a generic medicine has fallen from 5.01 to 4.03 between 2006 and 2017 (NHS Digital) as a result of competition from multiple suppliers, the reimbursement price of branded medicines that do not typically face competition from other manufacturers of the same medicine has increased from to Of 620 generic products for which we have consistent data between Q and Q2 2018, 161 (26%) showed an increase in reimbursement price over this period and 459 (74%) a decrease. Looking at the quarter of products where prices increased, this may have been necessary to maintain supply in view of increasing costs. In addition, due to companies taking a portfolio approach, the necessary price increases maybe supporting competition and supply on other medicines in the portfolio. In working to manage the level of retained pharmacy margin at the target of 800m per annum, DHSC changes or recalibrates the reimbursement price of generic medicines in Category M of the Drug Tariff. The BGMA has analysed the results of generic competition following when originator products (40 products) lost their market exclusivity during the lifetime of the current PPRS. This shows that the actual sales price of generic medicines launched during this period saw an average price reduction of 89% compared with the originator product across the PPRS period, including those launched very close to the end when competition would still be increasing. Section 4: Biosimilars Biological medicines including biosimilar medicines are highly complex, protein based medicines, made or derived from living organisms typically using recombinant DNA technology. Proteins are usually much bigger in size than medicines produced by chemical synthesis and have a higher complexity and variability than small chemical compounds. They can be tailor made so they bind to specific targets in the body. Biosimilar medicines are biological medicines that have been developed to be highly similar and clinically equivalent to an existing biological medicine and are marketed after the expiry of the patent on the originator or reference biologic.

8 Biosimilar medicines are comparable to their reference product as they have demonstrated no clinically meaningful differences in safety, efficacy, quality, structural characteristics and biological activity compared to that of the reference biologic. The 12 months of 2018 have been another period of significant progress for biosimilar medicines in the UK. October saw the patent expiry of Adalimumab, the world s top selling prescription medicine, which is expected to make the single biggest contribution to the NHS objective of saving in the order of 200 million to 300 million per year by 2021 from biosimilar medicines. Elsewhere, and building on the experience gained with other recent biosimilar introductions, the NHS is now in a strong position to make the most of the savings opportunity delivered via competition. From a position of just a few years ago where the UK lagged behind other European countries, it is now a pre-eminent market for take up of biosimilars. That momentum mustn t be allowed to stall or slow. Real-world experience is among an array of factors which has been key to greater adoption and understanding to the point now where we are seeing very high levels of biosimilar usage. It is particularly important that the rapid introduction and take up of the opportunities from new biosimilar medicines is consistent across the NHS. To help achieve that, the Regional Medicines Optimisation Committees (RMOCs) have had biosimilars high on their collective agendas. The main purpose of the four RMOCs of NHS England is working together as a single system to avoid unnecessary variations in the best use of medicines. Alongside the budget savings to the NHS from using biosimilars is the equally important benefit of freeing up resources so that more patients can have access to biological medicines and the significant health improvement benefits they can provide. There is emerging data that when biosimilar introduction takes place, and leads to a reduction of 50% in price it also delivers a 50% increase in the number of patients that can be treated. The higher relative cost of biological medicines both in R&D and manufacturing has tended to place constraints on access and routine use. Therefore, the availability of interchangeable biosimilar medicines gives an opportunity for prescribers to revisit patient treatment pathways and the group of people considered suitable for biological treatments to be widened.

9 Section 5: Examples of generic entry and cost savings 1. NHS Improvement top 10 medicines We believe there is room for further improvement. At the end of July, 2018, NHS Improvement (NHSI) announced 324million NHS savings in a year by switching to better value medicines. NHSI had identified trusts using a top 10 list of expensive medicines and set a savings target of 250m by switching to generics or biosimilars. The target was exceeded and NHSI will continue to work with Trusts to generate a further 200m savings this year. The list of medicines originated from the Carter Review and the work on the Model Hospital. The list will be updated on a rolling basis by NHS improvements providing further examples of the savings possible at an individual molecule level. Medicine Infliximab biosimilars uptake Imatinib generic Etanercept biosimilars uptake Rituximab biosimilars uptake Voriconazole Linezolid generic Treats Rheumatoid diseases and inflammatory bowel diseases Anti-cancer medicine Rheumatoid diseases Certain cancers and rheumatoid conditions Antifungal medicine which fights infections caused by fungus in the stomach, guts, lungs etc Anti-infective medicine Savings 99,400,000 66,333,000 60,300,000 50,430,000 15,912,000 14,922,000 Valganciclovir Antiviral 7,096,000 Prednisolone Soluble Asthma 4,946,000 Caspofungin Antifungal medicine which fights infections caused by fungus in the stomach, guts, lungs etc 4,891,000 Anti-emetic** Used to stop vomiting and nausea - 37,000 Total 324,193,000.00

10 Better Access, Better Health.