Biosimilars in Italy: a new regime

Since the approval of the first biosimilar in Europe, in 2006, biosimilars have gained momentum. Currently, 25 biosimilars have been centrally approved in the EU, and over a dozen biosimilar applications are under evaluation by the European Medicines Agency. Their number is likely to increase substantially in the next few years due to the upcoming patent expiry of several blockbuster biologics.

With the increasing constraints on healthcare budgets, many European countries look at biosimilars as an opportunity for substantial financial savings, and Italy is no exception. In fact, it is expected that the use of biosimilars will result in cost cuts for the Italian healthcare sector amounting to up to €460 million ($480 million) per year.

In 2016, Italy adopted measures that reorder and clarify the legal framework governing the use of biosimilars. These include the publication of a new concept paper on biosimilars by the Italian Medicines Agency (AIFA), and the adoption of specific rules on the substitutability and public procurement of biologics. Overall, these measures should favour a rise in the market uptake of biosimilars, although probably not at the pace that Italian payors would like to see.

The principal traits of the Italian biosimilar regulatory landscape, as modified by these recent changes, are outlined below.

Pricing and reimbursement

Medicinal products, including biosimilars, must have a pricing and reimbursement status in order to be placed on the Italian market. If the marketing authorisation holder (MAH) intends to seek reimbursement, it must submit a specific request to AIFA and negotiate the reimbursed price with the agency.

Italian law requires that the MAH of a generic product offer at least a 20% discount against the price of the originator in the context of the pricing negotiations with AIFA. AIFA’s concept paper clarifies that the agency applies this rule to biosimilars. Historically, price discounts for biosimilars have been higher than 25%.

Moreover, biologics (and biosimilars) may be included in the so-called ‘648 List’ of off-label uses reimbursed by the Italian National Health Service. For example, Remicade (infliximab) has been included in the 648 List for the treatment of severe refractory uveitis correlated with juvenile idiopathic arthritis. However, AIFA’s concept paper makes clear that the inclusion of the biologic originator in the list does not trigger the automatic inclusion of its biosimilar(s). In fact, until now, biosimilars of Remicade have not been included in the 648 List.

Substitutability of biosimilars

The extent to which biologics may be automatically substituted with their biosimilars has been the subject of lively public debate in Italy over the past few years. Most recently, the Italian regions have advocated an automatic substitution regime, but the 2017 Budgetary Law, adopted in December 2016, has introduced an express prohibition against automatic substitution.

AIFA’s concept paper on biosimilars confirms that automatic substitution is not permitted and indicates that physicians should decide on a case-by-case basis whether to treat a patient with a biosimilar or innovator biologic. However, it also provides that “biosimilars constitute a therapeutic option whose risk-benefit balance is identical to that of their originators.”

“The 2017 Budgetary Law, adopted in December 2016, has introduced an express prohibition against automatic substitution.”

This constitutes an important change compared to the previous version of the paper, which expressly recommended the use of biosimilars only in patients who have not been previously treated with a biologic (naïve patients). This suggests that AIFA is open to more biosimilar-switching in non-naïve patients.

The Italian Competition Authority has expressed concerns about such “rigid exclusion of any possible automatic substitutability between an originator and its biosimilar versions, and between different biosimilar versions of the same originator”, in particular because of possible future developments on biosimilar substitutability.

Public procurement and promoting uptake

The Italian healthcare system is highly decentralised, and each of the 20 Italian regions is financially accountable for the pharmaceutical expenditure in its territory. It is not surprising therefore that regional payors have historically used public procurement to encourage the use of biosimilars, primarily to achieve financial savings. However, in the absence of specific national rules on public procurement of biologics, the procurement policies and regulations on biosimilars adopted by the Italian regions have been highly fragmented and inconsistent.

Recurring requirements of these regional measures are that:

In the past, the Council of State (ie, the Italian supreme administrative court) has confirmed the legality of many of these regional measures. It has ruled that requiring physicians to justify the choice of a biologic different from the product that won a public tender does not breach the principle of freedom of prescription, and does not pose obstacles to the continuity of care in non-naïve patients.

The 2017 Budgetary Law partially remedies this fragmented situation and introduces specific national rules on public tenders for biosimilars. The Budgetary Law establishes that in public tenders for biosimilars, two products with different active substances may not be included in the same procurement lot even where they have the same therapeutic indications.

Moreover, it provides that, when there are more than three biologics with the same active substance available on the market, the products must be purchased through a “framework agreement” with all the interested economic operators. The framework agreement would rank the products on the basis of the “lowest price” or the “most advantageous economic offer” criterion. Patients must then be treated with one of the first three products in the framework agreement’s ranking. In any case, a physician would remain free to decide which product to prescribe among those included in the framework agreement.

In the past, Italian courts have found that, in the context of public tenders, biosimilars are presumed to be “therapeutically equivalent” to their originators. The concept of “therapeutic equivalence” refers to products that may be used for the same therapeutic purpose without any relevant difference in terms of efficacy and safety, and that consequently may be procured under the same conditions. It remains to be seen whether this line of jurisprudence will be confirmed after the entry into force on January 1, 2017 of the rules introduced by the new Budgetary Law.

The attempts made up to now by Italian payors to favour biosimilars have led to extensive litigation before Italian courts, in particular in the area of public procurement. This trend is unlikely to be substantially reversed in the short term, but the new rules may contribute to reducing the number of disputes between companies and regional payors. In any event, biosimilars are likely to remain one of the key items on the Italian healthcare agenda.

Luca Tosoni is an associate at  Covington & Burling. He can be contacted at: ltosoni@cov.com