Pharmaceutical Markets

Einleitung / Introduction

During the last decades, the first expensive biopharmaceuticals began to lose their patent protection, offering biosimilars the possibility to enter the market. However, in contrast to generics, biosimilars are no exact copies of the innovator, and substitution policies are more conservative. Therefore it is unclear if and to what degree biosimilars take on the role of generics in reducing pharmaceutical costs. It is the aim of this study to analyze the effect of biosimilar competition on market diffusion and prices among European countries.

Methode / Method

We used quarterly data from IQVIA on revenues and units sold of all biologics in 25 European countries from 2014 until 2020. The data set covers the pharmaceutical retail as well as the hospital market. Both markets were examined separately and the analysis was conducted on substance level. Prices of biosimilars and innovators as well as average market prices were calculated relative to the 1 year average brand-name prices before biosimilar entry. To evaluate the effect of biosimilar competition on market outcomes, we estimated mixed generalized linear models (GLM) including substance and country fixed-effects. To measure competition, we controlled for time since first biosimilar entry and the number of competitors. The Hausmann test was used to assess the appropriateness of the fixed-effects estimators.

Ergebnisse / Results

Within our study period, up to 12 substances experienced first biosimilar competition in our 25 countries, resulting in 1401 observations in the pharmaceutical retail market and 1354 observations in the hospital market. On average, biosimilars enter the market at 78% and 76% of the price of the brand-name biologic in the hospital market and in the retail market, respectively. The innovators decrease their prices by on average 6% in the hospital market and 5% in the retail market as biosimilars penetrate the market, which indicates the absence of a “’generic’ paradox” for biologics. Preliminary regression analyses reveal that the time since first biosimilar entry and the number of competitors are significant drivers for the decrease in substance prices over time in the hospital (p<0.01) and in the retail market (p<0.01), as well as for the diffusion of biosimilars in both markets. The highest market share of biosimilars across countries in the hospital sector after four years was 90% (Austria, Infliximab), whereas the lowest was 7% (Finland, Insulin glargine).

Zusammenfassung / Conclusion

Results indicate that the market penetration of biosimilars in Europe increases over time while prices decrease. However, compared to existing literature on generics, the effects are (much) smaller.

AutorInnen

Anna-Katharina Böhm

Isa Maria Steiner

Tom Stargardt

Einleitung / Introduction

The timing of the launch of a new drug is an important factor that determines access and availability to patients. Introducing fourth hurdle decision-making such as AMNOG, may have an impact on launch decisions in terms of changing the timing of launch, the launch sequence across countries as well as whether to launch or not to launch a new product to a market. We evaluate the impact of AMNOG, introduced in 2011, on access to new pharmaceuticals in Germany.

Methode / Method

International and national launch dates have been extracted from the IQVIA Sales Database for Germany as well as for 24 other EU countries for all drugs that were launched between 2000 and 2020. Launch delay was defined as the difference between the first international launch date and the corresponding national launch dates. We then investigated (a) the launch delay in months and (b) the decision to launch or not to launch a new product in difference-in-difference (DiD) models comparing Germany with countries that were not subject to changes in their HTA procedures in the time frame after AMNOG and had a similar pre-AMNOG trend in launch delay (i.e. UK, Italy, Portugal, Austria). We also analysed changes in the ranked order of launches of new drugs in our sample.

Ergebnisse / Results

Preliminary results indicate there is a clear time trend for launch delay to have decreased across all countries from the pre-AMNOG period (2010 or earlier) to the post-AMNOG period (2011 or later). Whereas in the UK launch delay decreased on average from 18.09 months (pre-AMNOG) to 9.14 months (post-AMNOG), it decreased in Germany from 11.13 months to 7.66 months. Thus, AMNOG lead to an increase in launch delay by 5.47 months (p<0.05) in our DiD model compared to the UK. The result remain stable when other countries with a similar pre-AMNOG trend were used as controls (Italy: 5.85 months, p<0.01; Portugal: 9.22 months, p<0.000; Austria: 8.42 months, p<0.000). Results also indicate that the increase in launch delay is about the same when compared over different post-AMNOG time intervals (2011-2013 vs pre-AMNOG: 5.52; 2014-2016 vs. pre-AMNOG: 6.84; 2017-2019 vs. pre-AMNOG: 5.21 months). Results for the decision to launch or not launch and for the change in the order of launches across countries are yet to be calculated.

Zusammenfassung / Conclusion

The implementation of the AMNOG did impact launch delay and thus compromised access to pharmaceutical care.

AutorInnen

Melanie Büssgen, Hamburg Center for Health Economics

Tom Stargardt, Hamburg Center for Health Economics

Einleitung / Introduction

Health insurances can use their market power to lower prices for generic drugs with multiple suppliers when they sign exclusive contracts with one of several possible manufacturers. Manufacturers are willing to sign these rebate contracts as they guarantee a high number of consumers. Such exclusivity can however harm patients if the pharmacy does not have the exact rebated generic in stock and patients have to wait until they get their pharmaceutical.

Methode / Method

In this paper, we analyze a natural experiment in Germany where from April 2007 onwards, that made rebate contracts easier to enforce for health insurances. We use data on 90% of pharmaceuticals issued for patients in the social health insurance by ambulatory doctors in North-West Germany from 2006 to 2017. The data contain information on roughly 100 million prescriptions to 14 million patients each year. We analyze three different outcomes: latency (days between the prescription was issued and the pharmaceutical was issued at the pharmacy), substitution (whether the issued pharmaceutical differed from the prescribed one) and physician intervention (when the physician mandates the prescription of one specific pharmaceutical irrespective of potential rebate contracts). Our empirical analysis is based on an event study design where we first estimate the effect of exogenous increases in rebate contracts on our outcome measures. Second, we analyze the effects of changes in the pharmaceuticals within a rebate contract group.

Ergebnisse / Results

We find statistically significant but economically small increases in latency for the first months after the introduction of the first rebate contract. This increase only holds for the first months after rebate contracts were introduced. There were no reactions in physician intervention after the introduction of rebate contracts. Changes in the composition in rebate contract pharmaceuticals also do not seem to influence our three outcome measures.

Zusammenfassung / Conclusion

This is the first empirical analysis of the introduction of rebate contracts on patient-relevant outcomes on this scale and wide range of pharmaceuticals. We do not find that rebate contracts influence drug availability for patients. The absence of an effect of rebate contracts on waiting times for drugs does not seem to be driven by physician intervention or substitution. We conclude that the design of rebate contracts in Germany did achieve the intended cost saving effects without harming access to pharmaceuticals.

AutorInnen

Harald Tauchmann, FAU Erlangen-Nürnberg

Simon Reif, ZEW Mannheim

Franz Josef Zorzi, FAU Erlangen-Nürnberg

Einleitung / Introduction

Reference prices set a reimbursment threshold for drug groups that typically involve off-patent brand-name drugs and their generics. This type of indirect price regulation fosters competition above this defined threshold since private copayments cover the difference between the drug's price and the reference price. This paper evaluates the causal effects of reference price reductions on prices, copayments, and overall expenditures for off-patent pharmaceuticals.

Methode / Method

We use quarterly data of the German market for anti-epileptics at the package level and at the aggregate level. We exploit that the reference price has been adjusted in some of the active substances but not in others in a difference-in-differences framework.

Ergebnisse / Results

At the product level, we find that a lower reference price reduces prices both for brand-name drugs and for generics, but leads to higher copayments, especially for brand-name drugs. At the aggregate level, we find that a lower reference price leads to savings for the public health insurer that come through three channels. First, lower reference prices steer demand from brand-name products to generics. Second, brand-name firms' revenues decrease. Third, patients bear a higher share of the cost. Overall expenditures (payments by the health insurer and patients) are decreased only modestly following a reference price reduction.

Zusammenfassung / Conclusion

We show that reference price reductions lead to decreased prices and higher copayments per individual drug package. In sum, the statutory health insurance saves cost for brand-name drugs, but total expenditures decrease only slightly.

AutorInnen

Annika Herr, Institute of Health Economics, LUH

Torben Stühmeier, BertelsmannStiftung

Tobias Wenzel, ZEW und University of Sheffield