In previous articles, I have shown some ideas about the past, present, and future of biosimilars. Once again, I would like to insist on the concept that biosimilars are not an option, but a need for health systems to remain sustainable and, above all, for patients to access biological medicines, which are often the only really effective therapeutic option when the other alternatives have failed. The situation differs somewhat between developed and emerging countries. In the former, with some exceptions, biological treatments are generally available to any patient who needs them. Public systems are responsible for financing them, assuming the cost in their annual budgets, and passing it on to their citizens via taxes or compulsory insurance. From the point of view of governments, the role of biosimilars, like that of generics, is to lower costs and thus allow the model not to collapse. The case of emerging countries is quite different. Initially, access to biological products is restricted to an extremely limited group of patients. If we take for example the sales of the 17 molecules with biosimilars available in the European markets and compare the data between countries such as the USA, Germany, and the BRICT (Brazil, Russia, India, China & Turkey), we can see the data in the chart below.
As shown in the chart, sales are significantly low in all these markets compared with that of the USA or Germany.
In the following graph, we have used Germany as a comparator to show the important differences between emerging countries and what should be the “standard of care”. We use the consumption of biological products per capita (of the 17 molecules mentioned) as a measurement. Germany represents 100% and the difference between the percentage shown by each country could be seen as the "therapeutic deficit" in relation to this category of products.
The data would even be more conclusive if we include all biological products, not only those with expired patents. In addition, when many of the more than 1,100 biological products under development, including among other cancer vaccines will come to light, or the 240 immuno-oncological treatments or the 566 products to treat patients with rare diseases, the situation will be even more uneven in the future. It is obvious that without some changes in the global health ecosystem these differences will not only persist but will suffer a significant increase.
There continues to be a significant health imbalance today, despite the evident progress being made. 15 years ago, while I was working in the international division of Sanofi, only two countries, (Venezuela, Algeria) had a real universal health care system comparable to European developed countries. Currently, almost all of them have implemented models, more or less dimensioned and/or effective, but that cover the basic needs of their citizens, or at least a big part of them. For example, after the Great Health Reform of 2009, the Chinese government implemented an ambitious plan to provide medicines and cover basic health needs for its 1.300 million’s population, with the aim of having it fully implemented in 2020. In Brazil, the Health Reform started in 1988 has ensured that three decades later 75% of the population, some 190 million people, who previously had no social coverage, could have basic health care despite their financial situation. Different organizations (local, regional, and national) contribute to the sustainability of the system, dedicating up to 27% of the total resources generated. Russia undertook in 2011 a reform of its public health system, which included the investment of 300 trillion rubles and the increase in mandatory contributions to companies in order for the system to achieve a quality and universal model of operation. In India, the government announced in 2018 the creation of a specific Health Protection Program, similar to that existing in some other neighboring countries such as Thailand, which provides minimum economic coverage per family and year for secondary and tertiary hospitalization, in addition to other aid and the setting up of outpatient clinics in rural centers, where the number of health professionals and centers is currently very small. To finalize the summary of the five largest emerging markets, Turkey achieved universal coverage thanks to the two major reforms of 2000 and 2010, with 75.9 % of satisfied patients, according to an article published in "The NEJM ” in 2015.
"The recent increase in the number of approved biosimilars due to the patent expiry of mega-blockbusters is expected to contribute to filling the gap in the forthcoming years."
These are just examples that are being followed at different speeds by the rest of the emerging countries, depending on their resources and capabilities. However, compared to small molecules, the situation of biological products shows a significant delay, partly due to the lack of available cheaper alternatives. The recent increase in the number of approved biosimilars due to the patent expiry of super-blockbusters is expected to contribute to filling the gap in the forthcoming years.
Impact of biosimilars in emerging markets: the example of Turkey.
As we have seen in graph 2, Turkey is, within emerging markets, the closest in terms of per capita consumption of biologicals to European standards. However, it would still have to multiply this consumption by two to reach German levels. To assess the situation and draw some conclusions about the effect that biosimilars may have in emerging markets, we will use Turkey as a case study. Taking data corresponding to the 2015-2017 period (IQVIA- Biopharmalinks’ pannel), the sales of the 17 selected molecules, those with existing biosimilars in the EU, accounted for around USD 510 million in 2017. Of these, anti-TNF products (adalimumab, bevacizumab, etanercept, infliximab, ranibizumab, rituximab, trastuzumab) represented 64% in value, although only 3% of the total in standard units. In order to understand this figure, we have to say that while all no anti-TNF products have several biosimilars in the market, only infliximab has one in the group of 7 molecules included in the anti-TNF category. We conducted a separate assessment of the two groups mentioned: non-anti - TNFs and anti – TNFs. Please find below the core takeaways. Non-anti-TNF molecules with biosimilars already marketed (darbepoetin alfa, enoxaparin, epoetin alfa and zeta, filgrastim, pegfilgrastim, follitropin alfa, insulin glargine, interferon alfa 2 a and somatropin).
As can be seen in the following graph, the original products still retain 75% of the units sold, although it was at the cost of reducing their sales prices by 25%.
Following with this group, it is important to note that 94% of the biosimilar units sold (79% in values) were of local origin. The average prices of biosimilars were 22% lower in 2017 than the (already reduced) prices of the originals. In summary, biosimilars have generated price savings in this group in two ways:
They have reduced the original product prices by 25%
They have managed to get 35% of the market at the cost of selling 22% cheaper than the originals.
On a market of USD 185 million, the savings generated could be roughly estimated as around 45 million/year:
Approximately 35 million a year in price reductions of original products
Approximately 10 million a year in reductions associated with the use of biosimilars
Adding both amounts, we could conclude that the use of biosimilars resulted in savings of just over 24% of costs.
The analysis would not be complete without assessing the impact of the launch of biosimilars in overall molecule sales. The number of units sold increased in the period under consideration by a CAGR of 7,5 %. Assuming that there is a perfect correlation between units and patients under treatment, we could say that the adoption of biosimilars in this group of molecules has represented an increase of 7.5% in treated patients every year, with a reduction of 24 % in the costs. If all the remaining budget should be used in treating more patients, and assuming that there are no other costs involved, the number of patients per year could be increased by almost three times and in less than five years, the figures would be similar to those of Germany.
Things are never so simple, and of course, it is a theoretical exercise, but it allows us to understand the potential impact that these products can have in emerging markets, as well as the need to promote them and facilitate their rapid adoption, although without neglecting other aspects, one in particular: quality.
Anti-TNF and future.
As we indicated above, anti-TNFs (adalimumab, bevacizumab, etanercept, infliximab, ranibizumab, rituximab, trastuzumab) represent 63% of the market for products with available biosimilars, 324 million USD per year. In the considered period, only one, Infliximab, had a biosimilar available, so we have analyzed this molecule in order to make a reliable forecast for the rest of the molecules.
As shown in the graph, Infliximab sold USD 33 million in Turkey in 2017, approximately 10% of all anti- TNF sales for the group under consideration. However, while the group grew just 5% this year as a whole in units, infliximab did so by 16%, tripling the average. In three years, the only existing biosimilar took 18% of the market share in units, with a discount of just 5% in prices. It is true that previously the originals had reduced their own prices by 16%, so in those three years alone the overall reduction has been 21%. With the introduction of new biosimilars, the process can only grow.
Considering that the penetration of the anti-TNF biosimilars was residual in 2017 (2%), but is expected to achieve similar levels of future intake to those of the non-anti- TNFs, (35%), and also a similar reduction in prices, both in the original and in biosimilars, we can foresee savings between 40-50 million via price reduction in innovators (assuming that they also retain 75% of the market) and some 25-35 million coming from patients who are to be treated with biosimilars. Altogether, between 65 and 85 million euros, 20-26% of the current budget.
This cost will be partially offset by a greater number of patients under treatment. If we assume that what has happened in Infliximab will occur in the other cases, each year 16% more patients will be able to access the drugs and, despite this fact, the costs will continue to decrease by around 10% yearly.
In summary, the case of Turkey can serve as an example to illustrate the role that biosimilars can play in access to biological products in countries under development. While in most of the developed world these drugs are a necessary tool to prop up the health system and prevent it from collapsing, in emerging countries their role is to help correct the tremendous inequality in market access for these products and allow patients that need them to be treated with the highest available standards. Health access should never be a privilege linked to where we are born.