competition Archives - European Industrial Pharmacists Group (EIPG)

The EU Parliament voted its position on the Unitary SPC


by Giuliana Miglierini The intersecting pathways of revision of the pharmaceutical and intellectual property legislations recently marked the adoption of the EU Parliament’s position on the new unitary Supplementary Protection Certificate (SPC) system, parallel to the recast of the current Read more

Reform of pharma legislation: the debate on regulatory data protection


by Giuliana Miglierini As the definition of the final contents of many new pieces of the overall revision of the pharmaceutical legislation is approaching, many voices commented the possible impact the new scheme for regulatory data protection (RDP) may have Read more

Environmental sustainability: the EIPG perspective


Piero Iamartino Although the impact of medicines on the environment has been highlighted since the 70s of the last century with the emergence of the first reports of pollution in surface waters, it is only since the beginning of the Read more

The risk of a biosimilar void in Europe

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by Giuliana Miglierini

The undergoing revision of the pharmaceutical legislation aims, among others, to redefine data protection to better support competitiveness of generics and biosimilars and to favour the timely access of patients to treatments.

While the innovator pharma industry is claiming the proposed reform would reduce the attractiveness of Europe for R&D activities, a recent report from Iqvia analysed the status of biosimilar competition. According to the document, not all biological medicines experiencing loss of exclusivity (LoE) in the next decade would automatically face competition by the corresponding biosimilars. This would result in the creation of a “biosimilar void” on the market, with many originators losing protection without seeing the parallel development of their biosimilar versions.

Competition is not guaranteed

Biosimilar competition is not necessarily guaranteed, and emerging dynamics pose a risk to conventional notions of medicines lifecycles, states the report since its very beginning. The analysis refers to biological medicines that will lose protection in the period 2023-2032.

Despite the approx. 8-fold expected increase in LoE opportunity by value between 2012 and 2032 (from €4.4 billion to €32.2 bln, as result of loss of exclusivity for 110 biological medicines), data show a declining trend for years 2021-2023 (€4.3 bln). According to Iqvia, more than a half (55%) of biologics with LoE in the period 2023-2027 might experience the lack of a biosimilar in development.

The report highlights five areas of common perception to be addressed to better define the issue. The increasing complexity of many biological medicines coupled to new barriers to entry is one of the factors making the development of biosimilars interesting only for products referred to originators with large market shares. According to Iqvia, 27% of the 26 high-sales products that will reach loss of exclusivity by the end of 2032 do not have yet a biosimilar candidate in development in Europe (vs 45% at the global level), corresponding to a potential loss of approx. €8 bln market opportunity. The number of biosimilar candidates in the pipeline for high-sales biologics is also expected to decrease from 2027 onwards.

Regulatory hurdles, therapeutic classes, and disease indication are expected to play a greater role in guiding decisions on biosimilar development, indicates the report. The attractiveness of the European market should also be considered. Oncology will remain the more interesting area, with 44% of all candidates in early to late development for LoE events occurring between 2023 and 2027. Immunology and ophthalmology are other therapeutic areas that might experience growing competition.

The current barriers to biosimilar development

According to Iqvia, the main constraints limiting the decision on biosimilars development are represented by cost and time. In the oncology area, for example, high costs have to be considered to purchase the reference comparator biologic medicine, and large patients populations are required to demonstrate relevant clinical endpoints. New therapeutic classes, i.e., PD-L1/PD-1 inhibitors, may also pose challenges for the design of pharmacokinetic and equivalence studies. From the manufacturing perspective, the increasing use of antibody-drug conjugates (ADC) would result in new barriers to entry.

According to Iqvia, the least attractive products for biosimilars development are those with less than €500 million annual sales in Europe. The report shows 93% of these products might fail to see biosimilar competition, compared to 27% of high-sales medicines. This negative trend would result in a “biosimilar void” corresponding to approx. €15 bln in lost savings. Iqvia also identified some exceptions that might experience a niche development, on the basis of specific technological and manufacturing know-how, platforms and market access excellence.

Another factor to be considered is reimbursement rate, that the report identifies in 51% for low-sales biologics with no biosimilar pipeline (approx. 30% lower than for products with a biosimilar pipeline). The management of the intellectual property referred to the originator should be also taken into consideration.

Orphan and one-off medicines

Despite the growing number of new biologics reaching marketing authorisation as orphan medicines, according to Iqvia biosimilar development is undergoing by now for only one product (eculizumab). No other orphan biologics are expected to face biosimilar competition in future, as annual sales of the 39 orphan medicines currently on the market are too low (approx. €105 mln).

A major factor limiting the development of biosimilars for orphan medicines is linked to the fact many of these therapies fall in the antibody-drug conjugates (ADC) and cell- or gene-therapies (ATMPs) categories (wave 3 biologics). This implies many challenges from the development and manufacturing point of view, higher upfront investments and a more complex setup for analytical and clinical testing.

According to Iqvia, there are currently 16 non-orphan biosimilar candidates under development, corresponding to wave 3 biologics. A limiting factor for this pipeline is identified in the still present fragmentation of the European regulatory system, e.g., reimbursement policies, incentives, and clinical standards. ATMPs, also referred to as one-off therapies, represent a particular case, being relatively young on the market. This leads to no expectation of LoE events in the next five years. The trend would then change, with some 10 products losing protection by 2040, but it should be considered together with the parallel declining of the number of eligible patients, as many of them might have been already treated with the one-off originator medicine.

Shifting standards of care

Another factor analysed by Iqvia is the impact on biosimilars development of the possible changes in the current standards of care, for example resulting from the availability of new and more user-friendly formulations of the originator (i.e., subcutaneous vs intravenous injections). The availability of second- and third generation versions of the original biologic should be considered as another factor limiting the possible market share of a biosimilar of the first-generation product. The picture is indeed furthermore complicated, as another frequent possibility, especially in the oncology area, sees the development of combination therapies based on the use of two or more biologics. As already said, some of them might be very costly (i.e. monoclonal antibodies and PD-1 inhibitors), and require a larger study population to demonstrate equivalence of the add-off effect.

The proposed solutions to fill the biosimilar void

The Iqvia report proposes several possible solutions to overcome the expected biosimilar void, starting from horizon scanning activities aimed at early identification of upcoming LoE events in order to prevent contractions in biosimilar development. Horizon scanning may also support market entry and granting of incentives based on demand. The development of biosimilars of orphan medicines might benefit of a default waiver of comparative efficacy studies, a suggested measure that according to Iqvia would not compromise the demonstration of biosimilarity. Improvements at the regulatory level might also help to streamline development, together with global convergence of regulatory guidance. Iqvia also suggests the adoption of clear regulatory pathways to incentivise the development of the next-generation, one-off biosimilar gene- and cellular treatments. Access might be improved by optimisation of market conditions, with incentives for clinicians combined with the introduction of prescription targets. New tender models would also be needed to favour multi-winner procurement practices.


The UK’s statutory scheme revision for branded medicines

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by Giuliana Miglierini

The amendment of the statutory schemeregulating the increase in pricing and consequent clawback payments of branded medicines proposed by the Department of Health and Social Care (DHSC) of UK’s government attracted the strong criticism of the pharmaceutical industry. The proposal aims to supersede the current scheme, established in 2018 by The Branded Health Service Medicines (Costs) Regulations. UK’s framework for pricing and clawback payments is completed by the 2019 voluntary scheme for branded medicines pricing and access (VPAS). Under the current framework, should a pharmaceutical company decide to opt out and not to join the voluntary scheme, then it becomes automatically subject to the statutory one. The current VPAS scheme, which in its original form dates to 1957, will end in December 2023. The DHSC is thus negotiating a new deal with the industrial counterparts to be effective starting 1 January 2024. Negotiations on the voluntary scheme are independent from the consultation on the statutory scheme, claims the DHSC.

The main features of the proposal

The statutory and voluntary schemes are administered by the DHSC on behalf of England, Wales, Scotland and Northern Ireland. The so received clawback payments from the pharmaceutical industry are then annually back allocated to each of the four countries on an agreed basis. According to the DHSC’s proposal, the ongoing negotiation should result in the two schemes – statutory and voluntary – continuing to operate in a complementary way. Should the negotiation on the voluntary scheme close without results, then the statutory scheme would continue to apply from 2024 onwards to all branded medicinal products. “With negotiations ongoing, there cannot currently be a default assumption of continuing alignment with any potential voluntary scheme provisions”, wrote the government. The proposed reform of the statutory scheme is comprehensive of an increase of the allowed annual growth rate, which is expected to impact on the back payment percentages. A revision of current exemptions from scheme payments should also occur.

A structure similar to that of the current statutory scheme should be used to manage these amendments, while a new lifecycle adjustment should be put in place to rebalance the payment percentages referred to medicines at different stages of their product lifecycle. As for unbranded biological products, which should be always prescribed by brand name according to MHRA’s guidance, the government aims to clarify that the statutory scheme should be applied to all biological medicines, irrespective to the fact they are marketed or not under a brand name. The government’s goal is to achieve a balance between these three objectives, “in a way that is consistent with supporting both the life sciences sector and broader economy”.

Comments from the ABPI

According to the Association of British Pharmaceutical Industries (ABPI), there is no equivalent in the world to UK’s voluntary scheme. The version agreed for the period 2018-2023 is based on a 2% per annum rise in pricing: pharmaceutical companies are called to pay back to the NHS rebates on their sales on all expenditure above the capped limit. On their side, the current voluntary scheme also requires the DHSC and NHS England to improve medicines access environment over the period 2019-2023.

ABPI mentions the dramatic rise in payments linked to the unforeseen circumstances of increased post pandemic NHS demand, which is posing major challenges for the UK life science sector. The members of the association more specifically criticise the cap growth mechanism, as well as the proposed lifecycle adjustment. The top management of leading pharma companies operating in the UK also expressed their views (read more, on the European Pharmaceutical Review).

More details on the proposals UK’s government confirmed its commitment to working with the pharmaceutical industry to facilitate the development of medicines in the UK and to support rapid NHS’s patients access to innovative medicines. The current form of the statutory scheme allows for a growth rate of 1.1% (nominal) per year for sales of branded medicines subject to the scheme. The payment percentage for 2023 and all subsequent years was set in April 2023 at 27.5%. The main exemptions refer to sales of pharmacy only and general sales list medicines, small companies with under £5 million sales to the NHS each year, sales of low-cost presentations costing less than £2, and parallel imports. The continuation of the policy of broad commercial equivalence between the statutory and voluntary schemes is the criterion chosen by the DHSC to protect the stability and efficacy of both: payment percentages in the statutory scheme would be thus comparable (but not necessarily identical) to those in the voluntary scheme. The new payment percentages in the statutory scheme proposed for 2024 would be based on a higher allowed growth rate of 2% (nominal). According to the DHSC, the maintenance of the current growth rate of 1.1% per year, in the absence of a newly agreed VPAS, would result in an effective decrease in allowed growth for most companies and might give rise to “a commercial environment for the life sciences sector that may not fully reflect the objective of supporting the sector and the broader economy”. On the other hand, an increase above 2% per year may lead to a unsustainable budget pressure on the NHS. As for the exemptions, the proposal aims to include in the statutory scheme some additional exemptions from payment which are currently part of the VPAS, namely referred to sales of medicines containing a new active substance (NAS) for 36 months from the date of their first marketing authorisation. According to the consultation document, this would incentivise companies to launch innovative medicines in the UK more rapidly than in other countries. An exemption from scheme payments for centrally procured vaccines (CPVs) is also part of the proposed package, and it would include vaccines for national immunisation programmes recommended by the Joint Committee on Vaccination and Immunisation (JCVI), procured by a central government body, or managed by the UK Health Security Agency (UKHSA) or a successor body. The third exemption to be included in the statutory scheme refers to payments for exceptional central procurements (ECPs). The measure would cover medicines related to purposes of emergency preparedness (i.e. national stockpiles) conducted by a central government body, or managed by UKHSA or a successor body. The lifecycle adjustment Innovative medicines are typically characterised by higher prices at launch, to then lower it while approaching the end of intellectual property protection. According to the DHSC’s proposal, initial prices are typically above the opportunity cost to the NHS, and older medicines would in general also benefit from greater price competition from generics and biosimilars. In some instances, states the document, this competition would be insufficient, thus resulting in prices not low enough to reflect the later stage in the product’s lifecycle. This especially applies to single supplier markets, where no competition at all is available. The proposal aims to overcome the current one-size-fits-all approach to the statutory scheme, and to introduce additional payments for older products with no competition, or a flat, lower payment for older products in more competitive markets. The so-generated additional income would then be used to reduce the headline payment percentage paid by newer products. According to the consultation document, these latter ones would refer to any product where the active substance has been marketed in the UK for less than 12 years.


What happens after IP loss of protection

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by Giuliana Miglierini

What does it happen under a competitiveness perspective once intellectual property (IP) protection for medicinal products expired? And what is the impact of the new entries on generics and biosimilars already in the market?

The role of competitor entry on the market has been analysed in a report by IQVIA.

The document focuses on loss of protection (LOP), thus including in the analysis all products that are free from any form of IP rights (patent protection, SPCs, RDP, market exclusivity/loss of exclusivity, data exclusivity, orphan/paediatric drug exclusivity). According to the report, there are many elements to be considered while assessing the impact of IP rights, among which are regulatory issues, prices policies, competitiveness landscapes. Finally, all the previously mentioned issues are today facing a higher pressure due to the incumbent global situation, characterised a generalised economic crisis especially in Europe. One of the main goals of the EU Commission is to increase the attractiveness of the internal market as a key innovative region for investment in the pharmaceutical sector.

The main trends of the past six years

The IQVIA’s report takes into consideration the group of medicines that have lost protection across the past six years (2016–2021), for a total of 118 molecules; it also analysed the impact of the alignment of the regulatory data protection (RDP) rules in Europe occurred in late 2005, as well as the entry of new countries in the EU occurred in 2004 (Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovakia and Slovenia). EU’s enlargement also included Romania (2007), Bulgaria (2007), and Croatia (2013). Many of the products considered in the analysis were innovative medicines, representing approx. 13% of the total European pharmaceutical expenditure at their peak.

According to IQVIA’s data, the total European pharmaceutical market at list prices valued € 1 trillion in 2016-2021. Over the same period, all protected products counted for 37% of total expenditure on pharmaceuticals (€ 377 billion). Medicinal products that lost protection represented roughly 10% of the total EU market value (€103 billion).

Forms of IP protection

Just more than a half (51%) of products that lost protection in years 2016-2021 were subject to a Supplementary Protection Certificate (SPC), while the RDP mainly refers to older cardiovascular, or combination medicines. Eleven years is the current average length of protection in Europe (-4.2 years; it was 15.2 years for authorisations granted in 1999-2005); the decrease can be attributed to the entry into force of the European centralised system, that diminished the impact of delays to LOP. Market exclusivity also depends on the specific form of IP protection chosen, as it may vary the calculation from different starting dates for IP filing.

IQVIA’s data show that SPC represents 32% of the final form of protection; this sums to 19% of SPC followed by paediatric extension. SPC provides a maximum of 15 years of protection, with an average of 14.4 years. Medicines under regulatory data protection are 31% of total (8 years data exclusivity + 2 years market exclusivity +1 year for a significant new indication), the patented ones 11%. Smaller fractions are covered by orphan drug exclusivity (5%) or orphan drug extension followed by paediatric extension (2%). Considering sales values, the preferred constraining form of protection for small molecules is SPC (93%), followed by RDP (83%); SPC plus paediatric extension occurs in 50% of cases for biologics. Small molecules are also often subject (80%) to patent plus other forms of exclusivity (orphan/paediatric extension). According to IQVIA, the undergoing discussion on the review of the European IP legislation may lead to an alignment of the RDP duration to the US standard (5 years for small molecules, 12 years for biologics).

The impact of the different legislation governing patent litigation in the EU vs the US should also be taken into consideration.

Access and competition

Access of new generic and biosimilar medicines in the European market is a long debated issue, as historically it often proved difficult to determine the precise date of patent expiry and to find an alignment between different countries on this fundamental issue.

According to IQVIA’s report, in the years 2016-2021 the duration of access to major EU markets was 36 days. Competition for small molecules has reduced the cost by approx. 41%, with a volume growth of ~27%; the overall savings for the payer was -8% CAGR for the years 2016-2021. Biologics also increased their volumes year-on-year (23%). Less evident are savings for payers (8% increase in 2016-2021), but many biologics benefit of confidential discounts for hospital supplies.

Competition is very peculiar to the European market landscape, with 92% of molecules having competitors recorded by sales value. A very small niche (2%) of small, low value products proved to be less attractive; the remaining 6% refers to products under development. The biosimilar sector is particularly challenging, as only the largest molecules are attractive from the competition point of view; about 30% of products without a competitor in development are biologics.

Central and Eastern Europe countries are still the preferred ones for early access to competitors, compared to the EU4 markets (Germany, France, Italy, Spain), due to dates for LOP that are in many cases still subject to some variation. On the contrary, EU4 markets account for 89% of sales of available molecules; many countries have no recorded sales for 25% of the available originator molecules.

Data by IQVIA indicates that, at a macro-level, the system has reduced the cost of medicines open to competition by 28%, while the volume of treatment increased 27%. Despite this encouraging trend, treatment paradigms shifting were also observed before LOP.

As for therapeutic areas, RDP protected medicines that underwent LOP were mainly referring to anti-hypertensive (73%) and combination products (61%). The higher proportion of SPC protected products was found in systemic anti-fungals (60%), oncology medicines and HIV/anti-virals (45% each). Immunology and lipid regulators are often protected using SPC plus paediatric extension (60% and 50%, respectively)

The importance of intellectual property rights

Estimates of investments in pharmaceutical R&D are approx. €39 billion/year, according to the report. Return on investment relies heavily on IP rights, a theme that is central also to the ongoing review of the EU’s pharmaceutical and IP legislations. Many new treatments are on their way towards approval, especially in the field of advanced therapies; according to IQVIA, more than 60% are first-in-class therapeutics.

Two core concepts support the current European framework for intellectual property rights: a period of exclusivity applying to new compounds (patent protection + SPC), followed by open competition once all IP expired. At this stage, competitors can access open data and manufacturing formulations. Prices are often regulated at the national level to incentivise competition and to positively impact on treatment opportunities available to patients.

The current fragility of supply chains for pharmaceutical productions may pose many challenges to originator companies which remain the sole provider of a medicine after loss of protection. A risk highlighted by IQVIA’s report is a too pronounced decrease of prices to support competition, and thus the sustainability of the market.

Access to innovative medicines is another challenge identified, referring to countries where the originator did not launch its product, and neither the competitors did. Furthermore, competitor entry often refers to low-value medicines. This despite future loss of protection for the years 2026-2030 should refer mainly (55%) to biologic molecules, compared to 43% for the period 2021-2025.