Biosimilars in Canada: Current Environment and Future

Opportunity

April 2019

2

Biologics* share of the pharmaceutical sales, OECD, 2018

26.2%

0%

5%

10%

15%

20%

25%

30%

35%

ESP

NZL

USA IR

EC

AN BEL

POR

SWE

AUS

FIN

SLK

GER SL

VSW

IFR

AAU

TU

KN

OR

LUX

HU

NIT

ATU

RC

ZE JAP

NLD

POL

EST

GR

EKO

RM

EX CH

I

OECD Median: 19.1%

Data source: MIDAS™ Database, prescription retail and hospital markets, 2018, IQVIA. All rights reserved.*Includes biologics patented in Canada as of 2017.

Biologics – an important segment of the Canadian pharmaceutical market

3

Canada has the second highest per capita spending on biologics

$381

$141$137$128$124$111$110$106$101 $92 $88 $83 $81 $77 $73 $69 $61 $59 $56 $56 $52 $44

$26 $22 $19 $18 $15 $11 $11 $2 $1

USA

CAN SW

IBE

LIR

LD

EU FIN

AUT

SWE

FRA

NO

RAU

SES

PIT

ASV

N UK

JPN

SVK

NZL

LUX

PRT

HU

NC

ZEN

LDG

RC

KOR

POL

TUR

EST

CH

IM

EX

Data source: MIDAS™ Database, prescription retail and hospital markets, 2018, IQVIA. All rights reserved.*Includes biologics patented in Canada as of 2017.

Spending per capita, patented biologics*, OECD, 2018

OECD Median: $69

4

Canada has the second highest prices for biologics

2.14

1.00 0.98 0.95 0.91 0.88 0.87 0.86 0.86 0.85 0.85 0.84 0.83 0.83 0.83 0.80 0.77 0.77 0.76 0.75 0.72 0.69 0.68 0.67 0.66 0.66 0.65 0.64 0.620.54

0.34

USA

CAN

SWI

DEU

FIN

NZL

AUS

LUX

MEX

IRL

SWE

JPN

ESP

ITA

NLD

HUN

CHI

NOR

BEL UK PRT

FRA

EST

AUS

CZE

GRC

POL

SVK

SVN

KOR

TUR

Data source: MIDAS™ Database, prescription retail and hospital markets, 2018, IQVIA. All rights reserved.*Includes biologics patented in Canada as of 2017.

OECD Median: 0.78

Average foreign-to-Canadian price ratios, patented biologics*, OECD, 2018

5

Biologics sales are on the rise, despite biosimilar availability in high-sales areas

Data source: MIDAS™ Database, prescription retail and hospital markets, 2018, IQVIA. All rights reserved.*Includes biologics patented in Canada as of 2017.

Trends in patented biologics* sales, Canada, 2009-2018

$2.0B $2.3B $2.7B$3.2B

$3.8B$4.4B

$4.9B$5.4B

$6.0B$6.7B

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Growth2017‐2018 11.3%5‐year CAGR 11.3%10‐year CAGR 14.6%

Biologics share of pharmaceutical sales

24.6%23.4%22.2%21.2%19.6%16.8%

26.2%

6

Biosimilar availability: Canada lags behind Europe

6

Data source: MIDAS™ Database, prescription retail and hospital markets, 2017-2018, IQVIA. All rights reserved.*Includes biologics patented in Canada as of 2017.

7

Biosimilar uptake: Canada lags behind Europe

Biologic medicineSales in Canada,

2017(million)

Infliximab $1,092

Etanercept $316

Insulin glargine $274

Rituximab $256

Filgrastim* $128

Epoetin alfa* $102

Enoxaparin sodium $61

Somatropin $39

Follitropin alfa* $20

*Acute biologicsData source: MIDAS™ Database, prescription retail and hospital markets, 2017, IQVIA. All rights reserved

Biosimilar uptake, Q4-2017 (share of units)

4.0%

3.1%

2.6%

43.5%

22.6%

0% 20% 40% 60% 80% 100%

MedianOECD

MedianPMPRB7

Canada

8

21% 21% 23% 22%

25% 25% 27% 25%

26% 22% 18%15%

5% 9% 10%12%

23% 23% 22%

6%5.5%

16%

0%

100%

FY2011 FY2013 FY2015 FY2017

645 702 847 995

780 8321,026 1,128

797 725666

674156 294364

541728 757

837 262252710

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

FY2011 FY2013 FY2015 FY2017

Xeljanz

Inflectra(infliximab)Remicade(infliximab)Rituxan

Etanercept

Humira

Other biologicDMARDs

Less than half of new infliximab patients were initiated on the biosimilar in 2017

Number of new patients on select DMARDs Distribution of new patients by select DMARDs

Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

Fewer patients initiated on infliximab after biosimilar entry

…instead, new patients start on other originator products

9

The infliximab experience: the biosimilar uptakeWithout switching existing patients and only initiating few new patients on the biosimilars, Canada lags behind all OECD countries in terms of the infliximab biosimilar uptake

98%96%92%

89%

79%78%

64%63%60%59%56%

53%

40%37%36%30%

23%22%17%17%16%

9% 8% 7%0% 0% 0%

NO

R

POL

UK

AUT

ITA

SWE

SVN

PRT

FRA

CZE

ESP

DEU IR

L

KOR

SVK

BEL

TUR

SWI

MEX FI

N

AUS

JPN

CAN USA CH

I

HU

N

NZL

Data source: MIDAS™ Database, prescription retail and hospital markets, Q4-2018, IQVIA. All rights reserved.

OECD Median: 37%

Biosimilar uptake (share of units), infliximab, Q4-2018

10

Biosimilars are often priced higher in Canada

Data source: MIDAS™ Database, prescription retail and hospital markets, 2017, IQVIA. All rights reserved.

Biosimilar uptake, Q4 2017 (share of units) Biosimilar prices are generally higher, despite greater discounts, likely due to higher originator prices prevailing in Canada

36.7%

Why biosimilar savings matter?

Cost drivers in select Canadian public drug plans

2.7% 2.1% 2.7% 3.0% 1.8% 2.9%

1.7% 2.2% 0.3% 1.3%1.0%

1.0%

4.1% 5.4%4.9%

4.1%4.4%

4.7%

-2.0%-6.0%

-3.0% -1.8% -1.0% -1.1%

-7.2%-1.5%

-3.2%-2.3%

-1.8% -1.3%

8.0%

-2.3%

2.4%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Note: Drug costs include markups.Data source: National Prescription Drug Utilization Information System Database, Canadian Institute for Health Information.

ON data isnot represented

8.5%9.7%

7.9%

16.2%

7.2%

9.5%

-0.8% 2.0%Net Change 2.5% 12.0% 2.0% 6.8%

-9.2%-7.5%

-6.2%-4.1%

-5.1%

-2.1%

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21

Growth rate 24.8%, CAGR 7.7%

12 Data source: MIDAS™ Database, prescription retail and hospital markets, IQVIA. All rights reserved.

Infliximab ($1,092M) Etanercept ($316M) Insulin glargine ($274M) Filgrastim ($128M)2019 2020 2019 2019

Canadian savings only a fraction of their potential

$31M $7M $6M $17M

Actual vs. potential

at average OECD

uptake $91M

$60M $26M$19M

$23M

$17M$18M

34% 26% 27% 92%

Actual vs. potential

at top OECD

uptake

$514M

$482M

$140M

$147M

$124M

$130M

$45M

$62M

6% 5% 5% 27%

Forecasted savings

Savings Unrealized Savings

13

Recent developments in Canada

Biosimilar industry association: announces the introduction of Patient Support Programs to be launched in 2019

HTA: CADTH streamlined the biosimilar review process (Feb 2018), with fewer submission requirements, shortened review period, etc.

Price negotiation: pCPA Policy on Biologics and Biosimilars (Sept 2018) aims for parallel processes with the HTA, requires price transparency and considers the implementation of tiered listing and switching

Public payers: Preferential reimbursement: generally applies to biosimilars for treatment-naïve patients (e.g., Remicade) –

those on reference biologic do not have to switch; Quebec only reimburses the lowest priced version of infliximab

Tired reimbursement: implemented by Manitoba – new patients required to try two Tier 1 products before being reimbursed for a Tier 2 product; Tier 1 biologic products have been determined to be the most cost-effective

Private payers: Preferential reimbursement: e.g., Green Shield Canada opened its biosimilar transition program to any

sponsor who wishes to take part (Dec 2018); patients that do not switch to the biosimilar pay the difference out of pocket

14

Conclusions

Canada has the second highest spending on biologics in the OECD, and pays the second highest prices

Canadian biosimilar availability and uptake lags behind Europe

Biosimilar savings have been minimal in Canada, well below international norms

Given the cost pressures, payers depend on biosimilar savings to fund new and innovative therapies

Canadian biosimilar industry, HTA, price negotiators, and payers are taking steps towards greater market penetration of biosimilars: Patient Support Programs, streamlined and transparent processes, preferential reimbursement, transitioning, and tiered reimbursement

T H A N K Y O UPatented Medicine Prices Review Board

Elena LunguManager, Policy Development Patented Medicine Prices Review Board / Government of CanadaElena.Lungu@pmprb-cepmb.gc.ca / Tel: 613-288-9602