The incremental cost-effectiveness ratio (ICER) compares the change in cost of a new treatment with the change in effect of the new treatment, known as the relative effectiveness [1, 2]. EMA authorises the marketing of a biosimilar based on the assumption that the biosimilar generates equivalent outcomes as the reference biopharmaceutical. What does equivalence mean for assessing relative effectiveness ?
In biopharmaceuticals, in which the product is the process, this process is unlikely to be 100% the same for the biosimilar as the process of the reference biological .
Subtle differences arise because biotechnology medicines are derived from living organisms and some process features of the reference biological remain confidential even after patent expiry .
Current analytical techniques and clinical studies are not able to detect all potential differences in clinical outcomes between a biosimilar and the reference biological .
Although the risk of immunogenicity and rare adverse events in the long term is particularly relevant to biotechnology medicines, the time horizon of biosimilar studies submitted to registration authorities is usually not long enough to consider these potential effects. For instance, the EMA guideline relating to somatropin biosimilars states that one randomised controlled trial comparing the biosimilar and the reference biological lasting at least six months is required for marketing authorisation .
This implies that, in practice, a biosimilar may have lower or equal effectiveness compared to the reference (originator) biological. It is also possible to have a so-called ‘bio-better’ medicine where a biosimilar is more effective than the reference (originator) biological .
This may result from the fact that the biological is developed using a 15- to 20-year-old manufacturing process, whereas the biosimilar manufacturer makes use of the most recent manufacturing processes.
To substantiate the claim of equivalence between a biosimilar and the reference (originator) biological there is a need for adequately powered equivalence or non-inferiority studies. Such studies are available for some, but not for all biosimilars. For instance, EMA has accepted evidence from pharmacokinetic and pharmacodynamic studies only, e.g. for filgrastim and recombinant human insulins, in the absence of non-inferiority clinical studies. In addition, EMA may allow the extrapolation of data to another indication of the reference biological without an evaluation of the biosimilar in this new patient population .
Also, as the cost-effectiveness of a biosimilar is calculated relative to a comparator, there is a need for comparative data. However, clinical trials used for registration purposes usually employ placebo as a comparator. In contrast, reimbursement authorities require that the biosimilar be compared to the current standard treatment, e.g. the reference biological. An indirect comparison can be set up using the evidence from placebo-controlled trials of the biosimilar and placebo-controlled trials of the reference biological, but such comparisons have a lower methodological quality than a direct head-to-head clinical trial of the biosimilar and the reference biopharmaceutical .
Furthermore, registration authorities demand clinical trials that demonstrate efficacy in a structured setting. However, reimbursement authorities require data on the effectiveness of a biosimilar in a real-world setting .
In addition, differences in treatment regimens between those studied in clinical trials and those applied in daily clinical practice may have a clinically relevant impact on health outcomes.
Finally, it should be noted that clinical trials used for registration purposes may employ surrogate outcome measures. In contrast, reimbursement authorities want data about primary health outcomes, such as mortality or quality of life.
To address this issue, health-economic modelling approaches can be employed if there is evidence of the relationship between the surrogate endpoint and the health outcome.
The relative cost depends on the cost of the medicines and other costs associated with biotechnology therapy.
From a theoretical perspective, the relative costs should reflect the difference in opportunity costs, i.e. the cost related to the next-best choice available with limited resources, between a biosimilar and the comparator (originator). However, in practice, relative costs refer to the difference in medicine acquisition prices. On the one hand, comparisons based on acquisition prices rather than costs could be misleading because, for example, a manufacturer who is currently charging a high price might be willing to reduce it substantially in the face of competition. On the other hand, differences in acquisition prices between a biosimilar and the comparator are relevant to many reimbursement authorities.
The price differential between biosimilars and originator biologicals is likely to be smaller than that observed between originator and generic chemical medicines, given that biosimilars incur higher research and development costs. The developmental time for a generic medicine is around three years, whereas this period increases from six to nine years for a biosimilar .
Generic medicines need to demonstrate bioequivalence only, whereas biosimilars need to conduct phase I and III clinical trials. Although there is no need to repeat all trials of the reference biopharmaceutical, the need to conduct some biosimilar trials enrolling several hundreds of patients involves considerable expense and time: a US study has estimated that the costs of biosimilar trials would range from Euros 7.5 to 30 million .
The required investment in biosimilar manufacturing processes is reported to amount to Euros 185 to 333 million. Furthermore, pharmacovigilance programmes are usually instituted to follow up on safety and efficacy of a biosimilar once the product has entered the market, thereby increasing the prices further. Differences in the acquisition price between a biosimilar and the reference biological in the region of 15–30% have been suggested in the literature [11, 13, 14].
This price differential can be substantial when applied to expensive biologicals, and it can be expected to increase as the acquisition price of biosimilars falls as they gain market share .
Hospitals, the setting in which biosimilars tend to be prescribed, are likely to negotiate discounts on official medicine prices. In other words, price competition between manufacturers takes the form of discounting to the distribution chain. No data on discounts for biosimilars are publicly available, but some studies have investigated discounting in the sector of generic chemical medicines. This research indicated that generic medicine discounts ranged from 20 to 70% off the wholesaler selling price in France and maximum discounts exceeded 50% of the drug tariff price in the UK [16, 17].
As economic evaluations draw on official prices of the biosimilar and the originator biological, the calculated relative costs do not correspond with actual differences in the acquisition costs, and the cost-effectiveness of biosimilars is not calculated correctly.
Any potential differences in the (long-term) safety and effectiveness of a biosimilar and the reference (originator) biological may impose the need for additional health care and generate healthcare costs and costs of productivity loss. This, in turn, is likely to influence the cost-effectiveness of a biosimilar.
An economic evaluation relates the relative costs of a medicine and the current standard treatment to its relative effectiveness .
In some cases, this means that the cost-effectiveness of a biosimilar needs to be established vis-à-vis the reference biological. In other cases, biosimilars have been developed for older biologicals, for which second-generation originator biologicals are now marketed and have become the standard treatment—e.g. second-generation erythropoietins and second-generation G-CSFs .
This implies that the cost-effectiveness of the first-generation biosimilar needs to be determined relative to the second-generation originator biological.
Example: filgrastim for preventing febrile neutropenia has been marketed in the EU since 1991, and five filgrastim biosimilars have entered the market since 2008 for the same indication.
A long-acting pegylated form of filgrastim, pegfilgrastim, was registered by EMA in 2002. As pegfilgrastim has become the standard treatment, any economic evaluation of a filgrastim biosimilar should calculate its cost-effectiveness relative to pegfilgrastim. A filgrastim biosimilar may look less cost-effective if compared to pegfilgrastim .
If clinical studies demonstrate an equal effectiveness profile of a biosimilar and the comparator, then a cost-minimisation analysis needs to be carried out and the least expensive medicine is chosen.
Cost-minimisation is a tool used when comparing multiple drugs of equal efficacy and equal tolerability. If efficacy and tolerability have been demonstrated, however, then a simple comparison of ‘cost/course of treatment’ can suffice for the purpose of comparing two or more therapeutically equivalent treatment alternatives. When conducting a cost-minimisation study, the author needs to measure all costs (resource expenditures) inherent to the delivery of the therapeutic intervention and that are relevant to the pharmacoeconomic perspective.
Cost-minimisation analyses have been submitted to reimbursement authorities for biosimilars of epoetin alfa, filgrastim, and somatropin in the EU. For instance, in 2008 the Scottish Medicines Consortium approved the use of epoetin zeta (a biosimilar to epoetin alfa) for the treatment of anaemia associated with chronic renal failure .
As two phase III trials showed clinical equivalence for epoetin zeta when compared with epoetin alfa for the surrogate endpoints of correction and maintenance of haemoglobin concentration, the economic evaluation took the form of a cost-minimisation analysis. The evaluation compared epoetin zeta with three other erythropoiesis-stimulating agents and concluded that epoetin zeta would yield equivalent efficacy at similar or lower costs. The Scottish Medicines Consortium also accepted a filgrastim biosimilar (ratiograstim) for use within the National Health Service Scotland for the prevention of febrile neutropenia .
As a biosimilar is likely to be less expensive than the comparator, e.g. the reference biopharmaceutical, the assessment of the cost-effectiveness of a biosimilar depends on the relative effectiveness. If appropriately designed and powered clinical studies demonstrate equivalent effectiveness between a biosimilar and the comparator, then a cost-minimisation analysis needs to be carried out and the least expensive medicine is chosen.
If there are differences in the effectiveness of a biosimilar and the comparator, other techniques of economic evaluation need to be employed, such as cost-effectiveness analysis or cost-utility analysis. Given that there may be uncertainty surrounding the long-term safety and efficacy of a biosimilar, the cost-effectiveness needs to be calculated several times throughout the product’s life cycle.
Economic evaluation of biosimilars
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