Savings measure based on price competition of biological medicines and biosimilars

One of the main savings measures related to the medicines reimbursement expenditure in 2017 is the promotion of the price competition of biological medicines and biosimilars. The patents of many innovative original biological medicines currently in use in the Finnish outpatient care and included in the respective medicines reimbursement system will expire in the next few years. This will potentially lead to the entry of their biosimilars in the Finnish market, with the ensuing price competition. 

The price competition of biologicals induced by biosimilars is associated with a significant calculatory savings potential based on the average savings expected to be made in 2017–2020. The annual savings potential of Kela’s medicines reimbursement expenditure has been estimated at 40 million euro.  

In the biological medicines category, the price competition measures will be targeted at physicians and price regulation. The changes will enter into force as of the beginning of 2017. Substitution by pharmacies will not be introduced in Finland.

Guidance of physicians

The attending physician will continue to decide on the switch of the biologicals and will be monitoring the implementation of the switch. Physicians are encouraged to prescribe the most inexpensive product if there is a biosimilar available for the original biological medicine.  Among the instruction given to the physicians, there is the obligation to write the medical grounds in the patient records if the physician prescribes an alternative other than the cheapest among the same pharmaceutical substance options.

As of the beginning of 2017, Finland will take over a system of prescriptions in force for two years for all products, whereas the prescriptions of biological medicines with an existing biosimilar will continue to remain in force for 12 months only.

Moreover, the measures targeted at rational use of medicines include the invitation by the authorities for the physicians to follow the expenses of the medicines they prescribe.  The authorities are launching an extensive information campaign to support the price competition between biologicals.

The guidance mechanisms targeted at physicians will be further developed in the overall context of the other similar mechanisms in the Finnish social welfare and healthcare reform. The changes will also impact biologicals later on.

Price regulation

The price and reimbursement regulation of biological medicines will also undergo changes. A new mechanistic price rule will be implemented regarding the first reimbursable biosimilar whereby its adopted reimbursable list price cannot exceed 70% of that of the original product. Since the decision-making powers have here been delegated to the Director of PPB, the price and reimbursability process for biosimilars can be very rapid. The biosimilars launched after the first one in the market cannot have a price that is higher than that of the first biosimilar product.

Once the first biosimilar has obtained the reimbursability status and has been introduced to the market, the list price of the original product will be reassessed by the authorities.  However, there is no mechanistic price rule covering the price of the original product but the authorities will consider the situation on a case-by-case basis.

Price competition impacts on PIF members

The promotion of the price competition of biological medicines will impact the PIF member companies in different ways, depending on their selection of biological medicines and biosimilars. PIF supports the measures taken to promote the price competition of biologicals. The competition starting after the expiry of the patent can boost the use of the active substance in question, and the savings potentially achieved through the competition will increase the opportunities to introduce novel medicines at a more rapid rate.