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French healthcare products committee sets out more of its biosimilar pricing policy

Country : France

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PARIS, 19 Oct (APM) - France's healthcare products pricing committee (CEPS) sets out more of its price policy for biosimilars in its 2017 annual report.
It also clarified pricing for generics reimbursed via the 'liste en sus' list of drugs eligible for special reimbursement or dispensed by hospital pharmacies to outpatients.
In this report posted online on Wednesday, the committee explains that its biosimilars policy has been discussed with French pharma lobby Leem in a steering group for biosimilar drugs.
The aim was to "reconcile the attractiveness" of the French market with the implementation of substantial savings, in anticipation of the imminent loss of patents on high-selling biological drugs.
Three guiding principles were defined by the CEPS and Leem as of 2016:
  • price discounts cannot be of the same order for biosimilars as for generics
  • initial discounts should be envisaged, followed by pricing developments and eventually price convergence, based on observation of market shares
  • due to the existence of the compensable drug differential (EMI) for the liste en sus and the compensable outpatient dispensation differential (ERI) for drugs dispensed to outpatients from hospital pharmacies, prices of hospital drugs should be equivalent in order to respect fair competition.
The EMI and ERI allow the health insurance to claw back half the difference between the price which is valid for the liste en sus or the list of products that can be dispensed by hospital pharmacies to outpatients and - if it is lower - the price actually obtained by hospitals from pharma companies after tenders.
The CEPS says that a draft amendment to the medicines framework agreement on biosimilar pricing was "essentially stabilised" in 2017, but was not finalised due to lack of agreement with the industry.
The two parties agreed on five points:
  • initial discount rates for the reference biological drug and the biosimilar of 30% in hospitals and 20% and 40% respectively in the community
  • an ongoing 'discount calendar' for sales in the community (24 months then 18 months) followed by price cuts moving towards convergence. The ongoing discounts in the community are proportional to the respective market shares of the reference drug and its biosimilars
  • an ongoing discount calendar (24 then 18 months) for hospital drugs based on observation of hospital purchase prices and the resulting EMI or ERI. The minimum discount here is 10%, which can be increased to 30% depending on the percentage difference between the observed purchase price and the price set by the CEPS. This 30% discount ceiling may be waived if the highest purchase price was less than or equal to 50% of the current price set
  • the exceptional possibility of a lesser discount for a biosimilar if there is a risk that it will not be marketed, as is the case with generics
  • provision for reconsidering the ongoing discount calendar for drugs bought by hospitals after two years.
CEPS and Leem did not reach an agreement over the exception to the 30% discount ceiling for hospital purchases if the purchase price is less than 50% of the current price. CEPS wanted the exception to be applicable as of 24 months while Leem only wanted it to apply at 48 months.
The lack of agreement "has in no way compromised the committee's implementation of all the provisions of the draft agreement in the negotiations concerning the arrival of biosimilars," the CEPS said. It noted that in 2017, pricing had been obtained for the first two biosimilars of Roche's cancer and rheumatology drug MabThera (rituximab), Biogaran (Servier group)'s Truxima and Sandoz (Novartis group)'s Rixathon.

Generics dispensed in hospitals to outpatients, or on liste en sus

In its report, CEPS also takes a look at generics of drugs which are on the liste en sus or the list of drugs dispensed by hospital pharmacies to outpatients. It notes that its policy is to give the generic or biosimilar the same price as the reference drug, allowing manufacturers of generics and biosimilars to respond to tenders on an equitable basis.
It decided to give generic versions a 40% discount compared to the reference drug and to ask for an equivalent reduction in the price of the originator.
"Equity supposes that the publication of the price of the originator drug and the generic are very close together in order to respect competition for tenders. The consequence of this is that the reduction in the price of the originator drug must be asked for as soon as the generic has accepted the conditions for market entry, and not after observation of actual sales," it continued.
Article 56 of the 20108 social security Act gives CEPS the possibility of using a "unified price" which allows an identical reimbursement basis to be set for all originator and generic drugs. A first unified price was decided at the end of September 2018 for orphan drug carglumic acid, whose reference drug is Orphan Europe (Recordati group)'s Carbaglu (APMHE 59908).

Taking EU investment into account in drug pricing

The committee also examines the use of Article 18 of the state-industry drugs framework agreement, which allows investment made in the EU to be taken into account in drugs pricing (APMHE 45761). This can be done by offering price stability (up to five years) when prices are set and revised.
In 2017, CEPS allowed stable prices for 18 months in two cases: one for a first registration, the other for a price renewal. This was for "big investments in France in terms of means of production" and was for products with no additional therapeutic value (ASMR V).
The committee notes that price stability supposes that a pricing agreement has initially been found.
Concerning Article 24 of the framework agreement, which sets out a simplified and accelerated procedure for setting the prices of ASMR V drugs (APMHE 45804), CEPS says this involves negotiations "based on the company's clear acceptance of the ASMR discount compared to the comparator product".
Four pricing dossiers were assessed under this measure in 2017.
The CEPS said it had twice refused to use Article 24 for products "which had specificities such as the committee not having dealt with similar products for which the methods used to calculate reference costs would have been easy to transpose".
"It thus appears that products for which the calculation of the cost of treatment or the cost of treatment of comparators is complex are not good candidates for article 24," he said.
Two pharma companies abandoned this process in the preparation stage due to disagreement on the reference costs taken into account, preferring to return to traditional negotiations.
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