Use of budget savings from patent expiration of cancer drugs to improve affordability and accessibility

Background The introduction of generics after the loss of patent exclusivity plays a major role in budget savings by significantly decreasing drug prices. The aims of this study were to estimate the budget savings from off-patent cancer drugs in 2020–2024 and to inform decision makers on how these savings could be used to improve the affordability of innovative cancer treatments in South Korea. Methods A model was developed to calculate budget savings from off-patent cancer drug use in Korea over 5 years (2020–2024). Cancer drugs with one or more valid patents that expire between 2020 and 2024 in Korea were selected. Key input parameters in the model included market share of generics, market growth, and prices of originators and generics. To reflect market dynamics after patent expiration, the trends of the off-patent market were estimated using historical sales volume data of IQVIA from 2012 to 2018. The study assumed that the prices of off-patent drugs decreased according to the price regulations set by the Korean government and that the off-patent market sales volume did not grow. Sensitivity analyses were performed to investigate the uncertainty in model input parameters. Results A total of 24 cancer drugs which met selection criteria were identified. In the base case analysis, patent expiration of cancer drugs between 2020 and 2024 could lead to a spending reduction of ₩234,429 million ($203 million), which was 20% of the cancer drug expenditure in the 5-year period. The savings ranged from ₩157,633 million ($136 million) to ₩434,523 million ($376 million) depending on the scenarios in sensitivity analyses. Conclusions The findings indicate that patent loss of cancer drugs could lead to a 20% reduction in spending on cancer drugs over the next 5 years in South Korea. The savings could be used to improve the affordability of innovative, advanced cancer drugs for 94,000 cancer patients by reallocating the budget savings from patent expiration.

Local policies on biosimilars: are they designed to optimize use of liberated resources?

Study Objectives: Different policies have been implemented to enhance uptake of biosimilars. Regarding policies focussing on the demand-side, the literature has mainly concentrated on interchangeability and substitutability recommendations, issued by national or regional policymakers. Information on actions taken by healthcare organisations (HCOs) regarding prescribing behaviour is limited. Furthermore, there is no evidence on whether local authorities implemented a policy framework aimed to appropriately reallocate resources gained through patent expiration. This paper aims to fill these gaps, investigating policies on biosimilars implemented at the local level in the Italian National Health Service. Materials and Methods: Data were retrieved through a structured, validated questionnaire, administered online to all 199 public HCOs. Results: Seventy-six organizations in 16 of 21 Italian regions completed the survey, 89% of HCOs implemented information/educational initiatives on biosimilars. Prescription targets on biosimilars versus originators and off-patent versus in-patent molecules were introduced in 62% and 75% of HCOs, respectively. Prescribers reaching targets are mostly rewarded through monetary incentives. 75% of HCOs performed systematic impact evaluation of biosimilars. However, only 21% of HCOs detect patient under-treatment due to budget constraints and how availability of cheaper drugs could help. Furthermore, according to 25% of respondents, their HCO is involved in studies on biosimilars, but respondents did not provide any evidence of these studies. Discussion and conclusions: The study shows a high level of proactivity by Italian HCOs regarding actions on prescribing behaviour for off-patent biologicals. However, it seems that structured actions aimed at appropriately reallocating resources gained through patent expiration are still lacking.

PP170 Quantifying the Life-Cycle Value of Second Generation Antipsychotics

IntroductionWe estimate the life-cycle value of risperidone – Second-Generation Antipsychotics (SGA) – to balance the view that cost per Quality-Adjusted Life Year (QALY) estimates at launch are enough to guide access decisions. Study results will also drive discussion on access and price to recognize the dynamic nature of pharmaceutical pricing over the long-run.MethodsWe estimated number of patients treated for schizophrenia with risperidone in Sweden and the United Kingdom (UK) between 1994-2017 based on usage data form national statistics and volume sales data from IQVIA. We collected data from literature on the effectiveness (QALYs) and costs (EUR 2017) of risperidone (SGA) and haloperidol – First-Generation antipsychotic (FGA). We estimate the life-cycle value added by risperidone versus haloperidol, and the life-cycle distribution of the social surplus between the payer (consumer surplus) and the innovator (producer surplus).ResultsWe estimated the consumer surplus, the producer surplus, the Net Monetary Benefit (NMB) and Incremental Cost-Effectiveness Ratio (ICER) at each year and in aggregate terms (1993-2017). For the UK the producer surplus was ~28 percent out of the total surplus before patent expiration and five percent after patent expiration. In Sweden, producer surplus was around 6 percent out of the total surplus before patent expiration and one percent thereafter. In both countries, during the life-cycle of risperidone, the NMB per patient increased and the ICER decreased as a response to: (i) the launch of Risperidone Long-Acting Injectable (RLAI); and (ii) the generic entry.ConclusionsThe value added by risperidone increased during the life-cycle due to the launch of RLAI and the generic competition. This suggests that, considering the entire life-cycle, the value added by SGAs to the system is higher than the expected value estimated using cost-effectiveness analysis at launch. Pricing and reimbursement decisions should take into account the dynamic nature of pharmaceutical markets and the value added by innovative medicines over the long-run.

Federal Circuit Addresses Damages in the Hatch-Waxman Context

Morrison Foerster Client Alert, April 14, 2015On April 7, 2015, the United States Court of Appeals for the Federal Circuit issued its decision in Astrazeneca AB v. Apotex Corp., No. 2014-1221, affirming an award of a reasonable royalty of 50% in a case arising from the Hatch-Waxman Act. While largely affirming a damages award of over $70 million, the Federal Circuit reversed the district court’s award of damages during the period of pediatric exclusivity that AstraZeneca’s product held after patent expiration.