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Drug pricing deal will not deliver if ‘generics’ fail to sell

Arthritis drug Benepali barely sells while branded competitor dominates market

Simon Harris: The Minister for Health has said his department is developing a national biosimilar policy. Photograph: Dara Mac Donaill

When the rheumatoid arthritis drug Benepali came on the Irish market last year, it was the first to test a new drug pricing agreement between the Government, the HSE and the big pharmaceutical companies a couple of months previously.

Now the early results are in, and they are not encouraging. Benepali has sold just three packets in the final two months of 2016; in the same period, the branded drug Enbrel sold almost 10,000 packets.

The Framework Agreement on the Supply and Pricing of Medicines included for the first time a mechanism to force drug companies to cut the price of expensive new-generation biologics when generic competition – biosimilars – entered the market.

The scale of the price drop was 30 per cent. For branded drugs, on which the HSE spends tens of millions of euro every year, the savings for the HSE would be significant. On Enbrel alone, industry sources projected the State could save €2-€2.5 million a month.

For big pharma the payoff was that the Government would use the savings to pay for new therapies coming through their pipeline

70% of the market

The biosimilar industry was less upbeat, and it is now pointing to the Benepali experience as proof of its position that the price cuts in the framework agreement are effectively a “biosimilar blocker”, with big pharma companies content to preserve 70 per cent of their market.

The HSE vigorously contested this position at the time the price cuts were introduced, saying it had secured further discounts from Benepali’s manufacturer, Biogen Idec.

“Benepali now offers a very significant opportunity for Irish healthcare professionals to assist the HSE in delivering millions of euro of savings, which can be used to support service provision,” a HSE spokesman said at the time.

That’s difficult to square with the sales data for the two months since the Enbrel price came down, especially as the HSE itself is a major purchaser of drugs. Its decisions should be evident in the sales figures, although it is also unclear just how much of a marketing effort Biogen is putting behind the drug.

Benepali is not alone. Another biosimilar, the diabetic drug Abasaglar, has been on the market a year, going head to head with established brand Lantus. By December, Abasaglar was selling only 18 packets while Lantus was selling 12,172, according to IMS sales data.

Sales expectations

Other biosimilars are weighing up their commercial options as the European Medicines Agency approved three more in November. They have the potential to save the HSE millions if they enter the Irish market and trigger the 30 per cent fall in current prices. But they will likely think twice about incurring the costs involved if they can expect to sell just a handful of product.

In a recent written answer to a parliamentary question from Fianna Fáil TD Sean Fleming, Minister for Health Simon Harris said officials in his department were developing a national biosimilar policy.

“It is intended that this policy will examine different policy levers and tools that might be implemented in Ireland in order to increase the uptake of biosimilars in the health system in the coming years,” the Minister said.

Increasing that uptake remains the key to delivering the €750 million savings promised under the four-year drug pricing agreement.