No longer a niche market, generics are claiming new market space. An exclusive interview with Adrian van den Hoven, director general of the European generic medicines association.
The generic industry has developed to the point that it now accounts for much more than half the prescription medicines volume in Europe – but it is facing new strains, and embracing new opportunities. Adrian van den Hoven, who became director general of the European generic medicines association just over a year ago, discussed with EV Healthcare the industry’s changing relationships with governments and regulators, with doctors and patients, and with originator companies – particularly as a new wave of biosimilars is starting to alter the landscape.
The generic market in Europe is continuing to grow, and now accounts for around 70% of volume in the Netherlands, Germany and the UK – and the growth is coming in value too, van den Hoven points out. The trend has been strong, but varies from country to country, and year to year, since the market depends on patent expiries, which is a moving target.
But while volumes are up in most markets, generic prices are being cut heavily in some countries, outpacing any benefits of increased volume uptake. “This is a major concern for our members in France, where volumes are stagnating and prices are being pulled down”, says the EGA boss. In addition, generic firms in France face a further barrier, because generic substitution is allowed on only a limited list of products. “This is very challenging”, he observes – but he is optimistic about the chances of some easing, as budgetary constraints increasingly oblige the health insurance system to find new ways of controlling drug costs. “We hope for changes in the coming months, since the authorities are now looking at wider scope for substitution”, he explains.
But austerity has not been good for generics. van den Hoven says it has led to unpredictable price cuts – in a sector where prices are already low, and where many manufacturers are frequently operating on – and even below -the threshold of minimum profitability. “Governments have had the reflex of trying to save money by cutting the price of off-patent drugs,” he says. In some countries this has allowed almost immediate savings – but “member states have gone as far as they can on that route”, he says. “The scope for getting overnight economies that way has been exhausted”.
EGA has countered the tendency with arguments that allowing generic medicines to compete with branded products can bring even more significant savings. “Now we are having discussions with government authorities on other approaches”, he says. But there is a major educational campaign necessary in some countries where the value of generics is still not fully recognised. “It is only now that governments are recognising that generics can bring more than savings. Taking advantage of the lower prices of generics makes it possible to treat more patients and to treat them earlier, for the same cost as treating fewer patients with high-priced originator products”, he points out. That in turn means dismantling some of the barriers that continue to impede generic access. van den Hoven does not take the view that setting targets for a generic share of the market is helpful. “What is more useful is measures to stimulate competition, including the removal of barriers to pricing and reimbursement of generics. Then the differential with the price of the originator can provide incentives for substitution”, he says.
It is also still necessary to overcome negative perceptions of generics. “Our main effort is to get information out there on the regulatory approval process, so that prescribers and patients – and the governments they influence – are reassured about the quality of generics, so that resistance is overcome and acceptance increases. We aim to achieve this through dialogue and education rather than urging governments to impose use of generics, and there is a growing momentum of recognition for the merits of generics.”
Other barriers to generic entry in European markets include the lack of pricing mechanisms for some of the newer off-patent products now being offered – generic medicines that are more complex than a solid oral form, and notably biosimilars. “Pricing mechanisms for generics have not evolved in line with market developments, and sometimes delay market entry”, says van den Hoven. “Spain is a particularly tough market for biosimilars for this reason –and in addition, Spain, like Italy, has regional authorities, so the battle must be fought many times over across the country. Other barriers arise where a product is not automatically substitutable, and it then requires time and information and education and marketing to break in. So while it is good to see some biosimilars getting 50% of the volume in their relevant market, the entry of monoclonal antibody biosimilar medicines will be both a major challenge and an opportunity.”
On the current discussions on comparability in relation to biosimilars, van den Hoven politely says it is important to allay “unnecessary or artificial concerns”. For that to happen, he says, decision-makers have to be made aware of the full information on the approval process. He says the focus of discussions “has conveniently ignored the important concept of the totality of evidence – the extensive nonclinical studies done to characterise a product”. He acknowledges that the biosimilar industry is coming from behind in this debate, and needs to be more effective in communicating.
“It isn’t reasonable to expect patients and doctors to be automatically familiar with concepts such characterisation of a molecule. So we want to provide reassurance to them, by sharing more information about the regulatory approval procedure that provides a guarantee of comparability. In addition, there are some 400 million patient days of treatment worldwide with biosimilars, and no unexpected adverse effects have been associated with biosimilar use in the EU.”
“We perhaps should have been quicker to collect and report this positive experience of real world use, because to build trust you need to explain views. Now it is all the more appropriate, because with new generations of biosimilars entering the market such as monoclonal antibodies, and in very specialised treatment areas such as oncology or gastroenterology, there are new challenges. We have to reach out to a new set of doctors and patient organisations and work with authorities. We have been meeting patient organisations, who have approached us with their concerns about biosimilars but who are also aware of the real financial constraints that make biosimilars attractive. We have had little engagement with such groups until now, but the world has changed, and we need to work with them and with doctors, through dialogue, because they have real influence. And there is evidence of some similar shift among member state authorities too.”
Van den Hoven is quietly determined as he assesses the challenges. Surveying the arguments raised against his sector, he merely says: “There are some things that really don’t add up”. But he is marshalling his forces meticulously so that the mathematics starts to come right for the generic industry in Europe.