Interchangeability of off-patent medicines: a pharmacoeconomic perspective

When the 20-year patent on an originator medicine expires, less expensive versions of the medicine can enter the market. In the case of a conventional (i.e., a small, chemically derived molecule) originator medicine, patent expiry may be accompanied by the introduction of generic medicines. In addition to conventional medicines, pharmaceutical companies are marketing biopharmaceuticals (i.e., large and complex molecules derived from living organisms using biotechnology). When the patent on a biopharmaceutical expires, biosimilar medicines can enter the market. Generic and biosimilar medicines are cheaper than originator medicines owing to lower costs of research and development. However, the ‘interchangeability’ of off-patent medicines is not clear: are generic/biosimilar medicines comparable to originator medicines? The aim of this editorial is to discuss the pharmacoeconomic implications of the interchangeability of off-patent medicines.

Generic medicines

Generic medicines accounted for 42% of sold packs in the 27 countries of the EU and 18% of pharmaceutical sales in 2006 [1]. Generic medicines are now available to treat common conditions including diabetes, infections, depression, cancer, rheumatism and asthma.

To enter the European market, national medicine agencies and the EMEA assess the safety (e.g., the adverse effects that may occur), quality (the manufacturing process) and efficacy (the impact on health) of generic medicines. In accordance with Directive 2004/27/EC, a generic medicine needs to be essentially similar to the originator medicine, meaning that the generic medicine has the same qualitative and quantitative composition of active substances, the same pharmaceutical form and the same bioavailability as the originator medicine as demonstrated by appropriate studies [2]. Bioavailability refers to the amount of the medicine that is absorbed by the organism and the speed at which this occurs. If two medicines have the same bioavailability, therapeutic equivalence can be assumed. In other words, a generic medicine is an equivalent of an originator medicine and, therefore, interchangeable with the originator medicine. This implies that generic medicines have the same efficacy, but lower costs than originator medicines.

Despite the fact that medicine agencies verify and validate that generic medicines have the same safety, quality and efficacy as originator medicines, concerns have emerged regarding the bioequivalence and interchangeability of generic and originator medicines, and also regarding the appropriateness of generic substitution. For instance, a literature review comparing generic with originator clozapine (an atypical antipsychotic prescribed for the management of schizophrenia) found conflicting evidence regarding the bioequivalence of generic and originator clozapine [3]. There have also been reports of a higher patient relapse rate with generic clozapine, although other studies have found similar relapse rates and inpatient stay between generic and originator clozapine [3,4]. If generic and originator medicines are not interchangeable, the costs in addition to the effectiveness of therapy may be affected; a lower effectiveness of a generic medicine may result in the need for additional therapy or hospitalization, and may entail the patient needing to take more time off work.

Pharmaceutical policies, such as reference-pricing, reimbursement, physician incentives, pharmacist incentives and patient incentives, may reduce patient compliance with medicine therapy and undermine continuity of care. This may be the case if a generic medicine with a different shape or a different color is dispensed each time to the patient. The literature shows that, for instance, patients with schizophrenia may be suspicious of the therapy and unwilling to take unfamiliar medication, thereby decreasing compliance and increasing the risk of relapse [5]. These examples suggest that, although this effect is not caused by the operation of the generic medicine in itself, the activity of switching between originator and generic medicines and between generic medicines in response to pharmaceutical policies may affect effectiveness and costs of therapy.

Biosimilar medicines

Biopharmaceuticals represent an important new direction in pharmaceutical research and development, with a third of products in the development pipeline being biotechnology products. They make up approximately 6% of medicines currently marketed and account for 9% of pharmaceutical expenditure [6]. Biopharmaceuticals are used for the treatment of some rare metabolic diseases and for long-term conditions, such as diabetes, cancer and multiple sclerosis. The first biosimilar medicines were approved by the EMEA in April 2006. To date, biosimilar medicines of somatropin, epoetin α, epoetin ζ and filgrastim have entered the market.

There is inherent variation between biopharmaceuticals because they are derived from living organisms. Indeed, biopharmaceuticals may vary in terms of shape of the molecule and the type and length of any sugar or carbohydrate groups that may be attached to the molecule. Biopharmaceuticals require multifaceted manufacturing processes and changes to these processes can result in differences in safety and efficacy [7]. As a result, biopharmaceuticals differ within a batch, from batch to batch and between companies producing the same biopharmaceutical [8]. Furthermore, this variation extends to biosimilar medicines. Biosimilar medicines are agents that are similar, but not identical to the originator biopharmaceutical. This contrasts with generic medicines, which have the same active substance as the originator medicines.

The EMEA has issued regulatory guidelines with a view to registering biosimilar medicines [9]. In light of the variation between biopharmaceuticals, the approval process is specific to each product. In general, a biosimilar medicine is registered if it is similar to the originator biopharmaceutical in terms of safety, quality and efficacy. Dossiers of biosimilar medicines tend to include data on clinical trials with a view to demonstrating similar safety and efficacy with the originator biopharmaceutical. Unlike conventional generic medicines that need to establish therapeutic equivalence with the originator medicine, a biosimilar medicine needs to demonstrate therapeutic similarity with the originator biopharmaceutical. EMEA guidelines also impose pharmacovigilance programs to follow up safety and efficacy of biopharmaceuticals and biosimilar medicines once approval has been gained.

EMEA guidelines recognize that biosimilar medicines, by definition, are not like generic medicines owing to possible differences between biosimilar medicines from different manufacturers or when compared with the originator biopharmaceutical [9]. From a pharmacoeconomic perspective, the question arises whether inherent differences between biopharmaceuticals and biosimilar medicines produce differences in safety, effectiveness and costs. To date, this question is unresolved. If there are differences, the savings arising from the lower price of biosimilar medicines need to be weighed against the impact on effectiveness and costs of therapy.

Economic evaluation

An economic evaluation calculates the incremental cost–effectiveness ratio of an intervention relative to an appropriate comparator. If the comparator encompasses an originator medicine and a generic/biosimilar medicine, the price of which medicine should be used to value costs? This choice is likely to have an impact on the cost–effectiveness of the intervention.

Many countries have developed pharmacoeconomic guidelines that serve as a standard for designing and conducting economic evaluations to be included in drug reimbursement applications [101]. Few guidelines specify whether the valuation of comparator costs should be based on the price of an originator medicine or a generic/biosimilar medicine. Belgian guidelines state that, if the comparator covers two kinds of medicines with a different price but equal outcomes, the least expensive medicine should be used in the economic evaluation because such a medicine is more cost effective than the more expensive medicine [102]. If generic medicines exist, the reference price of these medicines needs to be used in the economic evaluation, even if these generic medicines are not frequently used in Belgium. In other words, the guidelines implicitly assume that there are no differences in efficacy between generic and originator medicines. No advice is given with respect to the choice to use the price of a biopharmaceutical or a biosimilar medicine.

Guideline recommendations regarding the choice of comparator may also inform this debate. Countries such as the Baltic countries, Finland, France, Italy, Spain and Sweden recommend that the most common treatment should be used as comparators [101]. If the most common treatment is a medicine, this implies that the choice of comparator and the price to value costs of the comparator depend on the market share of the originator medicine and the generic/biosimilar medicine.

Conclusion

European regulatory guidelines require generic medicines to have the same safety, quality and efficacy, and biosimilar medicines to have similar safety, quality and efficacy as the originator medicine. The pharmacoeconomic implications center around the issue of whether potential differences in originator and generic/biosimilar medicines, or in the use of such medicines translate into different effectiveness and cost profiles. If not, only the difference in medicine acquisition costs between originator and generic/biosimilar medicines needs to be taken into account. If such medicines do exhibit different profiles, the impact on effectiveness and other costs needs to be considered in addition to differences in medicine acquisition costs.

Financial & competing interests disclosure

The author has no relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties.

No writing assistance was utilized in the production of this manuscript.