CADTH releases Environmental Scan on International Policies on Use of Biosimilars
November 29, 2018

by: Alice Tseng

In October 2018, the Canadian Agency for Drugs and Technologies in Health (CADTH) issued an interesting Environmental Scan on International Policies on the Appropriate Use of Biosimilar Drugs (Report). This Report outlines some of the post-market policies and factors in jurisdictions outside Canada (U.S., U.K., Norway, Germany, Netherlands, France, Finland, Australia and New Zealand) impacting market uptake. The analysis was grouped under the categories of (a) interchangeability, switching and substitution; (b) supply side policies (relating to drug pricing, procurement and pharmacy reimbursement and practices); and (c) prescribing incentives.

Interchangeability, Switching and Substitution: The Report found that, of all the countries reviewed, physician-led switching (i.e. switching of products with physician’s consent) is allowed.

In many states in the U.S., automatic substitution is permitted for biosimilars deemed interchangeable by the U.S. Food and Drug Administration (FDA), unless the physician prohibits such substitution. But even in such case, the majority of the states require the pharmacist to inform the physician of the substitution. (Note, the FDA has not yet deemed any biosimilar interchangeable).

Other countries included in the Report generally do not permit automatic substitution, with a few exceptions. For example, Australia allows substitution for a select list of biosimilars unless the physician prohibits it, while Germany allows substitution only for “bioidentical biosimilars” (i.e. biosimilars to a reference biologic that are manufactured by the same manufacturer under the same manufacturing process, but sold under different trade names), unless the physician prohibits it. Patients must typically be informed of any substitution.

Supply Side Policies: Tendering at the national, regional, or hospital level is used to decrease the cost of biosimilars in Germany, the U.K., France, Norway and the Netherlands. Finland, France, Australia and Norway have a mandatory price reduction for biosimilars, while manufacturers are free to set the price in the U.S., Germany, and the U.K. In Germany, a free pricing policy without exceeding the price of the reference product is allowed while, in the Netherlands, biosimilars are officially priced the same as the reference product.

In some jurisdictions, pharmacists are encouraged to dispense biosimilars either through a regressive mark-up system at the retail pharmacy level with larger percentage mark-ups on lower-cost drugs (France and Norway) or by being allowed to keep the difference between the cost of the dispensed drug and the reimbursement price (Australia). In Germany, patients pay the difference between the retail price and the reference reimbursement price, giving patients incentive to choose the lower-cost drug.

Prescribing Incentives: Interestingly, the U.K. and Germany have gain-sharing agreements (i.e. the cost savings achieved through prescribing lower-cost drugs are shared between the payer and prescriber) to encourage physicians to prescribe biosimilars. Prescribing quotas (set as a percentage of total defined daily dose, either as a maximum for a reference product or a minimum for a biosimilar) also exist in Germany, with both physician-level and state-level biosimilar quotas for certain products. Further, physicians in Germany can be penalized for exceeding their budgets on pharmaceuticals, encouraging them to prescribe lower-cost biosimilars.

Other initiatives, at either the national or organization level, include education, raising awareness and encouraging the use of and access to biosimilars.

One of the objectives of the Report was to determine whether other jurisdictions have biosimilar policies specific to oncology drugs, but the Report did not identify any such policy.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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