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Published on 13 July 2009

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The value of biopharmaceutical innovation to the hospital pharmacist


As experts in medicines, there is a role for hospital pharmacists to contribute to economic evaluations demonstrating the value of biopharmaceutical innovation

Steven Simoens

Research Centre for
Pharmaceutical Care and
Faculty of
Pharmaceutical Sciences
Katholieke Universiteit

Biopharmaceutical medicines are medicinal products derived from living organisms using biotechnology (see Table 1). Biopharmaceuticals represent a fast-growing segment of the pharmaceutical market, making up one-third of products in the development pipeline and accounting for 9% of pharmaceutical expenditure.[1] Whereas the first generation of biopharmaceuticals tended to consist of first-inclass products addressing unmet clinical needs in small populations (eg, bevacizumab for metastatic colorectal cancer), the current wave of products target larger populations in the presence of competitor medicines (eg, insulins for type 2 diabetes mellitus). On the one hand, biopharmaceuticals may help to sustain the financial bottom-line of pharmaceutical companies as they tend to be efficacious at often high prices. On the other hand, biopharmaceuticals may be viewed by regulatory authorities, third-party payers and patients as being expensive and having limited outcome data at launch.

There is a role for hospital pharmacists to be involved in demonstrating the value for money of biopharmaceuticals with a view to informing registration, pricing and reimbursement decisions, and with a view to sustaining the appropriate use of biopharmaceuticals in real-world practice.


Research and development
Several economic studies have documented that research and development of biopharmaceuticals is risky, lengthy, complex and expensive. An analysis of the success rate of medicines found that biopharmaceuticals had a higher overall success rate than chemically derived medicines (30% versus 21.5%),[2] but had an inferior success rate in phase III trials.[3] This implies that biopharmaceuticals have a higher probability of failure at a stage where high development costs have already been incurred. The average development time from initiation of phase I trials to marketing authorisation by the US Food and Drug Administration amounted to 97.7 months for biopharmaceuticals, as compared with 90.3 months for chemically derived medicines.[2] Furthermore, development times have increased over time given that the development process moves to more complicated target biopharmaceuticals. Two analyses found similar costs of research and development for biopharmaceuticals and chemically derived medicines, although the cost drivers differed.[2;4] Biopharmaceuticals incurred higher costs of manufacturing processes, had a lower success rate in the more expensive phase III trials and experienced a longer development time.

In Europe, the European Medicines Agency (EMEA) assesses the quality, safety and efficacy of biopharmaceuticals through a centralised procedure. In this respect, a number of issues specific to biopharmaceuticals need to be considered.

Biopharmaceuticals typically bind to their biological target (eg, a protein linked to a disease). Therefore, a biopharmaceutical is likely to be particularly efficacious in a specific subgroup of the patient population. For instance, trastuzumab is a monoclonal antibody that binds to the human epidermal growth factor receptor 2 (HER2) protein and has been shown to be efficacious in the treatment of patients with metastatic breast cancer whose tumours overexpress HER2.[5] This has implications for the clinical development of biopharmaceuticals in that it highlights the need to select the most responsive target population, to collect information on relevant patient characteristics and to identify suitable biomarkers.[6] It could be argued that, in this respect, biopharmaceuticals involve a paradigm shift towards personalised medicine.

Limited data about safety risks tend to be available at the time of the marketing authorisation by EMEA. Therefore, possible concerns about adverse events after long treatment periods can be addressed through pharmacovigilance studies after authorisation and, if appropriate, through post-authorisation safety studies. For instance, infliximab was approved for the treatment of ankylosing spondylitis in 2003 subject to the condition that a follow-up clinical study was undertaken to
investigate its safety and efficacy over a period of two years.[7] Also, a risk management plan must be submitted to EMEA detailing the actions and the surveillance that is undertaken to identify and manage potential safety risks. For instance, to minimise the risk of infections following administration of natalizumab for relapsing multiple sclerosis, the risk management plan imposed a clear-cut definition of the target population, the requirement for established multiple sclerosis, an escape rule for nonresponders, the administration in specialised centres by experienced physicians only, clear contraindications, a patient alert card and an educational programme for physicians.[8]

Pricing and reimbursement
A comparative analysis measured ex-manufacturer prices of biopharmaceuticals in five European countries (France, Germany, Italy, Spain and the UK), Australia, Canada, Japan, Mexico and the USA.[9] The results indicated that all countries tended to have higher biopharmaceutical prices than the USA. The authors argued that biopharmaceutical prices may be less regulated than those of chemically derived medicines given that: (a) some countries exclude biopharmaceuticals used in hospital from price regulation; (b) price comparisons with other products in a therapeutic class are less likely to occur for biopharmaceuticals with a novel mechanism of action or indication; (c) informal costeffectiveness thresholds may be higher for biopharmaceuticals that address unmet clinical needs or that treat orphan diseases; and (d) some countries have in place industrial policies to support the development of biopharmaceuticals.

With a view to assessing the cost-effectiveness of biopharmaceuticals, regulatory authorities tend to demand data on the effectiveness of biopharmaceuticals in a real-world setting rather than on their efficacy in a structured setting. Also, as the cost-effectiveness of a biopharmaceutical is calculated relative to a relevant comparator, there is a need for comparative data. Both factors have implications for the design of clinical trials. For biopharmaceuticals that provide a first-inclass therapy for unmet clinical needs, the incremental cost-effectiveness can be calculated on the basis of clinical trials comparing the biopharmaceutical with placebo. For biopharmaceuticals that are marketed in the presence of competitor medicines, there is a need to compute the incremental cost-effectiveness based on head-to-head trials of the biopharmaceutical relative to a relevant comparator.[10]

The cost-effectiveness and budget impact of biopharmaceuticals are inhibited by their high prices. The selection of a specific target population is likely to improve the cost-effectiveness and reduce the budget impact of biopharmaceuticals. For instance, despite the high price of trastuzumab of around US$19,000 per year, the UK National Institute for Health and Clinical Excellence (NICE) found trastuzumab to be costeffective in the subgroup of patients with metastatic breast cancer whose tumours overexpress HER2 as indicated by a diagnostic test.[11]

Innovative mechanisms have been proposed for the reimbursement of biopharmaceuticals. Risk-sharing arrangements are schemes in which the pharmaceutical company shares the risk with the third-party payer that the product may not be effective for a particular patient. If the product does not have the expected effect, the company may lose some or all product revenue, or needs to provide a replacement product.[12] For instance, NICE denied reimbursement for a number of drug classes treating multiple sclerosis (including beta interferons) in the UK in 2002 given that they were considered to be expensive and not cost-effective. Under a risk-sharing arrangement, pharmaceutical companies reduced prices if their medicines did not attain a target level of effectiveness in the patient population.[13]

There is a need for hospital pharmacists to contribute to an evidence-based approach that assesses whether biopharmaceuticals create value for money. Such an approach should be targeted at demonstrating the relative effectiveness and cost-effectiveness of biopharmaceuticals in real-world practice.

1. IMS Health. IMS lifecycle R&D focus. London: IMS Health; 2007.
2. DiMasi J, et al. Economics 2007;28: 469-79.
3. Mathieu M. PAREXEL’s pharmaceutical R&D statistical sourcebook 2004/2005. Waltham (MA): PAREXEL; 2004.
4. DiMasi JA, et al. J Health Econ 2003 Mar;22(2):151-85.
5. European Medicines Agency. European Public Assessment Report of trastuzumab — scientific discussion. London: European Medicines Agency; 2005.
6. Schneider CK, et al. Nat Rev Drug Discov 2008 Nov;7(11):893-9.
7. European Medicines Agency. European Public Assessment Report of remicade — scientific discussion. London: European Medicines Agency; 2007.
8. European Medicines Agency. European Public Assessment Report of natalizumab — scientific discussion. London: European Medicines Agency; 2006.
9. Danzon PM, et al. Health Aff (Millwood) 2006 Sep;25(5):1353-62.
10. Simon F. Health Aff (Millwood) 2006 Sep;25(5):1363-70.
11. Vernon JA, et al. Pharmacoeconomics 2006;24(4):335-43.
12. Cook JP, et al. Pharmacoeconomics 2008;26(7):551-6.
13. Barham L. Pharma Pricing Reimbursement 2006;11(4):100-1.

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