The generic and biosimilar perspective Warwick Smith Director

The generic and biosimilar perspective Warwick Smith Director General BGMA & BBA Dispensing Doctors’ Association 20 October 2016

Stuff to cover • An introduction • Key data • Supply chain • Pricing and reimbursement • High cost generics • The Health Service Medical Supplies (Costs) Bill • Biosimilar medicines • Whatever you ask me about ….

Introduction

Introduction

Traditional commodity model Brand monopoly Development of original brand Launch of original brand Brand 2015 NHS Information Centre data: Development of generics Br an d Price Generic competition reduces NHS costs by more than £ 13 bn pa Launch of subsequent generics Launch of first generic Average brand cost £ 20. 79 Average generic cost £ 4. 33 Effective patent / SPC protection of original brand Generic competition Generic

Data

Generic medicines Biosimilar medicines 90 -95% £ 172 m 77% Typical unbranded generic price reduction vs the originator Annual saving to NHS England of a 1% swing to the greater use of generics Average branded generic price reduction vs the originator 1. 38% 3. 5 77. 3% Proportion of all generics referred to in The Times coverage of high cost medicines Factor by which prices of a basket of generics in a basket of other European countries exceeds the UK price Proportion of primary care prescriptions in England filled by generic medicines (NHS reimbursement data) 0 – 100% 43% £ 3 m £ 200, 000 The range of take up of Infliximab across Trusts in England The percentage take up of biosimilar infliximab across all trusts Potential annual saving due to adoption of biosimilar infliximab (RCP) Possible annual savings from a single centre if all patients were switched from originator h. GH to biosimilar h. GH (2010 data) 6 out of 10 7 € 50 -100 bn The number of biologic medicines within the top 10 of UK medicines spend Biosimilar molecules currently available in the UK market Potential 5 year savings in the EU 5 and the US as a result of the use of biosimilars (IMS) £ 13 bn Annual cost to NHS England if all medicines were reimbursed at the level of the average brand

£ 172 m 77% Annual saving to NHS England of a 1% swing to the greater use of generics Average branded generic price reduction vs the originator Biosimilar medicines Generic medicines 90 -95% Typical unbranded generic price reduction 3. 5 1. 38% vs the originator 77. 3% £ 13 bn Proportion of all generics referred to in The Times coverage of high cost medicines Factor by which prices of a basket of generics in a basket of other European countries exceeds the UK price 0 – 100% 43% £ 3 m £ 200, 000 The range of take up of Infliximab across Trusts in England The percentage take up of biosimilar infliximab across all trusts Potential annual saving due to adoption of biosimilar infliximab (RCP) Possible annual savings from a single centre if all patients were switched from originator h. GH to biosimilar h. GH (2010 data) 6 out of 10 7 € 50 -100 bn The number of biologic medicines within the top 10 of UK medicines spend Biosimilar molecules currently available in the UK market Potential 5 year savings in the EU 5 and the US as a result of the use of biosimilars (IMS) Proportion of primary care prescriptions in England filled by generic medicines (NHS reimbursement data) Annual cost to NHS England if all medicines were reimbursed at the level of the average brand

Generic medicines Biosimilar medicines 90 -95% £ 172 m Typical unbranded generic price reduction vs the originator Annual saving to NHS England of a 1% swing to the greater use of generics 1. 38% Proportion of all generics referred to in The Times coverage of high cost medicines 3. 5 77% Average branded generic price reduction vs the originator Factor by which prices of a basket of generics in a 77. 3% basket of other European countries exceeds. Proportion the of primary care prescriptions in England filled by medicines (NHS UK price generic reimbursement data) £ 13 bn Annual cost to NHS England if all medicines were reimbursed at the level of the average brand 0 – 100% 43% £ 3 m £ 200, 000 The range of take up of Infliximab across Trusts in England The percentage take up of biosimilar infliximab across all trusts Potential annual saving due to adoption of biosimilar infliximab (RCP) Possible annual savings from a single centre if all patients were switched from originator h. GH to biosimilar h. GH (2010 data) 6 out of 10 7 € 50 -100 bn The number of biologic medicines within the top 10 of UK medicines spend Biosimilar molecules currently available in the UK market Potential 5 year savings in the EU 5 and the US as a result of the use of biosimilars (IMS)

Generic medicines Biosimilar medicines 90 -95% £ 172 m 77% Typical unbranded generic price reduction vs the originator Annual saving to NHS England of a 1% swing to the greater use of generics Average branded generic price reduction vs the originator 1. 38% 3. 5 Proportion of all generics referred to in The Times coverage of high cost medicines Factor by which prices of a basket of generics in a basket of other European countries exceeds the UK price 0 – 100% 43% £ 3 m £ 200, 000 The range of take up of Infliximab across Trusts in England The percentage take up of biosimilar infliximab across all trusts Potential annual saving due to adoption of biosimilar infliximab (RCP) Possible annual savings from a single centre if all patients were switched from originator h. GH to biosimilar h. GH (2010 data) 6 out of 10 7 € 50 -100 bn The number of biologic medicines within the top 10 of UK medicines spend Biosimilar molecules currently available in the UK market Potential 5 year savings in the EU 5 and the US as a result of the use of biosimilars (IMS) £ 13 bn Annual cost to NHS England if all medicines were Proportion of primary care prescriptions in Englandreimbursed filled by at the level of the generic medicines (NHS reimbursement data) average brand 77. 3%

Generic medicines Biosimilar medicines 90 -95% £ 172 m Typical unbranded generic price reduction vs the originator Annual saving to NHS England of a 1% swing to the greater use of generics 1. 38% Proportion of all generics referred to in The Times coverage of high cost medicines 77% Average branded generic 77. 3% price 3. 5 reduction vs the Proportion of primary care originator Factor by which prices of a prescriptions in England filled by basket of generics in a basket of other European countries exceeds the UK price generic medicines (NHS reimbursement data) £ 13 bn Annual cost to NHS England if all medicines were reimbursed at the level of the average brand 0 – 100% 43% £ 3 m £ 200, 000 The range of take up of Infliximab across Trusts in England The percentage take up of biosimilar infliximab across all trusts Potential annual saving due to adoption of biosimilar infliximab (RCP) Possible annual savings from a single centre if all patients were switched from originator h. GH to biosimilar h. GH (2010 data) 6 out of 10 7 € 50 -100 bn The number of biologic medicines within the top 10 of UK medicines spend Biosimilar molecules currently available in the UK market Potential 5 year savings in the EU 5 and the US as a result of the use of biosimilars (IMS)

Biosimilar medicines Generic medicines 90 -95% 1. 38% Typical unbranded generic price reduction vs the originator £ 172 m 77% Annual saving to NHS England of a 1% swing to the greater use of generics Average branded generic price reduction vs the originator Proportion of all 3. 5 generics referred to in Factor The Times coverage ofby which prices of a basket of generics in a basket of other European countries high cost medicines exceeds the UK price 77. 3% Proportion of primary care prescriptions in England filled by generic medicines (NHS reimbursement data) £ 13 bn Annual cost to NHS England if all medicines were reimbursed at the level of the average brand 0 – 100% 43% £ 3 m £ 200, 000 The range of take up of Infliximab across Trusts in England The percentage take up of biosimilar infliximab across all trusts Potential annual saving due to adoption of biosimilar infliximab (RCP) Possible annual savings from a single centre if all patients were switched from originator h. GH to biosimilar h. GH (2010 data) 6 out of 10 7 € 50 -100 bn The number of biologic medicines within the top 10 of UK medicines spend Biosimilar molecules currently available in the UK market Potential 5 year savings in the EU 5 and the US as a result of the use of biosimilars (IMS)

Supply chain

Supply issues The patient Distribution Batch release Manufacture finished form Source API

Supply issues Regional decision making Distribution Transport needs Batch release Transport needs Market concentration in far off lands Source API Manufacture finished form The patient Competition

Historic average service levels 1 Weighted average based on between five and nine members’ data at any one data collection point 1

Pricing and reimbursement

ar -M Ja n -D ec Oc t ep l-S Ju un r-J Ap ar -M Ja n -D ec Oc t ep -S Ju l un r-J Ap ar -M Ja n -D ec Oc t ep l-S Ju n r-J u Ap ar -M Ja n -D ec Oc t ep -S Ju l un r-J Ap 16 20 20 15 5 20 1 15 20 20 14 14 20 1 14 20 20 13 3 20 1 13 20 20 12 2 20 1 Aggregated scheme M data 2012 -2016 1, 2 Average price per pack per quarter (£) 1 0, 8 0, 6 0, 4 0, 2 0

NHS Digital data (2005 – 2015) Average net ingredient cost per prescription item (£) £ 6, 00 £ 5, 00 £ 4, 00 £ 3, 00 £ 2, 00 £ 1, 00 £ 0, 00 2005 2006 2007 2008 2009 2010 2011 2012 Source: http: //content. digital. nhs. uk/catalogue/PUB 20664/pres-disp-com-eng-2005 -15 -rep. pdf 2013 2014 2015

Generic medicine reimbursement costs compared to average pack cost 2012 -16 Ap r-J un 20 12 Ju l-S ep 20 Oc 12 t-D ec 20 Ja 12 n. M ar 20 13 Ap r-J un 20 13 Ju l-S ep 20 Oc 13 t-D ec 20 Ja 14 n. M ar 20 14 Ap r-J un 20 14 Ju l-S ep 20 Oc 14 t-D ec 20 Ja 14 n. M ar 20 15 Ap r-J un 20 15 Ju l-S ep 20 Oc 15 t-D ec 20 Ja 15 n. M ar 20 16 5, 00 4, 50 4, 00 3, 50 3, 00 2, 50 2, 00 1, 50 1, 00 0, 50 0, 00 Average net ingredient cost per prescription item (£) (per annum) Average price per pack in each quarter Q 2 2012 to Q 1 2016 (£)

Generic medicine reimbursement percentage change compared to average pack price 2012 -16 Growth in net ingredient cost and average price per pack 160% 140% 120% 100% 80% 60% 40% 20 1 5 5 -D ec 20 1 Oc t ep l-S un 20 15 Ju 15 r-J Ap Ja n- M ar 20 20 1 4 4 -D ec 20 1 Oc t l-S ep 20 14 un Net ingredient cost per prescription item Ju 14 r-J Ap Ja n- M ar 20 20 1 3 3 -D ec 20 1 Oc t ep l-S un 20 13 Ju 13 r-J Ap Ja n- M ar 20 20 1 2 2 -D ec 20 1 Oc t ep -S Ju l Ap r-J un 20 12 0% Average cost per pack per quarter

High cost generics

High cost generics • May be good reasons to increase the cost of older products • Price decay over time to unsustainable levels • New regulatory requirements • Choice between investment or discontinuation • Scheme M has always envisaged the Department of Health intervening in prices when competition does not work to protect the NHS • Reference to the competition authorities has always been a backstop. • Very few examples (<2% of generics)

The Health Service Medical Supplies (Costs) Bill

Health Service Medical Supplies (Costs) Bill • May signal little change • Introduces a level playing field • Regularises DH powers • But not codified • Data provisions are broad • Potential for change as it goes through Parliament

Principles of a good generics market • Low barriers to entry • High levels of generic prescribing • High levels of competition • Flexibility in pricing

Biosimilar medicines

Generic medicines Biosimilar medicines 90 -95% £ 172 m 77% Typical unbranded generic price reduction vs the originator Annual saving to NHS England of a 1% swing to the greater use of generics Average branded generic price reduction vs the originator 1. 38% 3. 5 77. 3% Proportion of all generics referred to in The Times coverage of high cost medicines Factor by which prices of a basket of generics in a basket of other European countries exceeds the UK price Proportion of primary care prescriptions in England filled by generic medicines (NHS reimbursement data) 0 – 100% 43% £ 3 m £ 200, 000 The range of take up of Infliximab across Trusts in England The percentage take up of biosimilar infliximab across all trusts Potential annual saving due to adoption of biosimilar infliximab (RCP) Possible annual savings from a single centre if all patients were switched from originator h. GH to biosimilar h. GH (2010 data) 6 out of 10 7 € 50 -100 bn The number of biologic medicines within the top 10 of UK medicines spend Biosimilar molecules currently available in the UK market Potential 5 year savings in the EU 5 and the US as a result of the use of biosimilars (IMS) £ 13 bn Annual cost to NHS England if all medicines were reimbursed at the level of the average brand

Generic medicines Biosimilar medicines 90 -95% £ 172 m 77% Typical unbranded generic price reduction vs the originator Annual saving to NHS England of a 1% swing to the greater use of generics Average branded generic price reduction vs the originator 1. 38% 3. 5 77. 3% Proportion of all generics referred to in The Times coverage of high cost medicines Factor by which prices of a basket of generics in a basket of other European countries exceeds the UK price Proportion of primary care prescriptions in England filled by generic medicines (NHS reimbursement data) 0 – 100% 43% The range of take up of Infliximab across Trusts in The percentage take up of across all England biosimilar infliximab trusts £ 13 bn Annual cost to NHS England if all medicines were reimbursed at the level of the average brand £ 3 m £ 200, 000 Potential annual saving due to adoption of biosimilar infliximab (RCP) Possible annual savings from a single centre if all patients were switched from originator h. GH to biosimilar h. GH (2010 data) 6 out of 10 7 € 50 -100 bn The number of biologic medicines within the top 10 of UK medicines spend Biosimilar molecules currently available in the UK market Potential 5 year savings in the EU 5 and the US as a result of the use of biosimilars (IMS)

Generic medicines Biosimilar medicines 90 -95% £ 172 m 77% Typical unbranded generic price reduction vs the originator Annual saving to NHS England of a 1% swing to the greater use of generics Average branded generic price reduction vs the originator 1. 38% 3. 5 77. 3% Proportion of all generics referred to in The Times coverage of high cost medicines Factor by which prices of a basket of generics in a basket of other European countries exceeds the UK price Proportion of primary care prescriptions in England filled by generic medicines (NHS reimbursement data) 0 – 100% 43% The range of take up of Infliximab across Trusts in England The percentage take up of biosimilar infliximab across all trusts 6 out of 10 The number of biologic medicines within the top 10 of UK medicines spend £ 13 bn Annual cost to NHS England if all medicines were reimbursed at the level of the average brand € 50 -100 bn £ 3 m £ 200, 000 Potential annual saving due to adoption of biosimilar infliximab (RCP) Possible annual savings from a single centre if all patients were switched from originator h. GH to biosimilar h. GH (2010 data) Potential 5 year savings in the EU 5 and the US as a result of Biosimilar molecules currently the use of biosimilars (IMS) available in the UK market 7

Generic medicines Biosimilar medicines 90 -95% £ 172 m 77% Typical unbranded generic price reduction vs the originator Annual saving to NHS England of a 1% swing to the greater use of generics Average branded generic price reduction vs the originator 1. 38% 3. 5 77. 3% Proportion of all generics referred to in The Times coverage of high cost medicines Factor by which prices of a basket of generics in a basket of other European countries exceeds the UK price Proportion of primary care prescriptions in England filled by generic medicines (NHS reimbursement data) 0 – 100% The range of take up of Infliximab across Trusts in England £ 13 bn Annual cost to NHS England if all medicines were reimbursed at the level of the average brand £ 3 m 43% Potential annual saving The percentage take up of due to adoption of biosimilar infliximab across all biosimilar infliximab (RCP) trusts 6 out of 10 7 € 50 -100 bn The number of biologic medicines within the top 10 of UK medicines spend Biosimilar molecules currently available in the UK market Potential 5 year savings in the EU 5 and the US as a result of the use of biosimilars (IMS) £ 200, 000 Possible annual savings from a single centre if all patients were switched from originator h. GH to biosimilar h. GH (2010 data)

What does the future hold? • Biologics account 6 of the top 10 medicines by spend in the UK • Poses considerable challenges for using high cost but innovative medicines – treat long term chronic conditions • Won’t be solved by a simple price reduction • Need to maximise use and drive uptake • Reduce unwarranted variation in the system

Questions?

Further information http: //www. britishgenerics. co. uk/ http: //britishbiosimilars. co. uk/