Pharmaceutical price regulation in Saudi Arabia: a countdown to affordable biosimilars

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Pharmaceutical price regulation in Saudi Arabia: a countdown to affordable biosimilars

Biosimilares/Investigación | Posted 26/08/2016 0 Post your comment

The pricing of pharmaceuticals and biosimilars is generally subject to national regulatory control. Regulation is in place to ensure pharmaceutical affordability, yet enable profitability for pharmaceutical companies and facilitate innovation. A recent paper on pharmaceutical price regulation in Saudi Arabia by Alhomaidan et al. [1], charts the regulatory procedures in place, and outlines how their evolution has led to today’s regulated pricing of biosimilars.

The price of a pharmaceutical product is not solely related to its manufacturing and marketing costs. The authors state that pharmaceutical companies also factor in the cost of ‘research and development, production and quality control, administration, marketing, distribution and retailing’ [1]. Other factors are also at work when it comes to product pricing in different countries, including governmental price regulation.

In Saudi Arabia, the first regulations related to the pricing of pharmaceuticals were set in place in 1953. In 1977, registration and pricing was entrusted to the Registration Committee at the Ministry of Health, who priced pharmaceuticals based on their price in the country of origin and their price in other countries. They also ensured that prices did not exceed the combined cost of the pharmaceutical wholesale price in the country of origin and export to Saudi Arabia [2].

Saudi Arabia saw the ‘law of pharmaceutical products and establishments’ being issued in 2004. This encouraged the marketing of cheaper pharmaceuticals by offering higher profit margins for cheap products [3]. In 2011, the Saudi Food and Drug Authority, applied a new system that allowed for price lowering of innovative pharmaceuticals by 20%, and encouraged the marketing of generics and transfer of their manufacture to Saudi Arabia [4].

When it comes to biosimilar price regulation in Saudi Arabia, the Full Control system is applied. Here, the manufacturer must supply certification from the country of origin, which is then authenticated by the Saudi Arabian Embassy. The product information required includes: ex-factory price; country of origin wholesale price; retail price (wholesale price plus expenses and retail profit); proposed export cost to Saudi Arabia; and Form 30, showing the product price in 30 pre-specified countries.

The infliximab biosimilar, Remsima, was the first registered in Saudi Arabia. This reached the market with a 36% reduction in price as compared to the innovator, Remicade. With respect to the pricing system applied, the authors conclude, ‘It should reduce the price of biosimilars in Saudi Arabia when compared to innovator reference products, allowing for more patient accessibility and affordability. However, it may put pressure on biosimilars manufacturers due to the high costs associated with their development. Hopefully in the long term, this can be negated with more manufacturers entering this niche market’.

References
1. Alhomaidan AM, et al. Pricing of biosimilars in Saudi Arabia. Generics and Biosimilars Initiative Journal (GaBI Journal). 2016;5(1):27-9. doi:10.5639/gabij.2016.0501.007
2. Ministerial Decree No. 7: The regulations for the registration and pricing of pharmaceuticals. 1971.
3. Royal Decree number 31/M: The law for pharmaceutical establishments and products. 2004.
4. The Saudi Food and Drug Authority: Executive regulation for the law for pharmaceutical establishments and products 2011.

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