A new incentive to encourage the prescription of biosimilars

The Directorate General of Health Care Supply (Direction Générale de l’Offre de Soins, the “DGOS”) and the Directorate General of Social Security (Direction Générale de la Sécurité Sociale, the “DSS”) published a ministerial direction (the “Text”) on 19 February 2018 introducing a new incentive mechanism to encourage healthcare establishments to prescribe certain biosimilars when the hospital prescription may be dispensed in the community (prescription hospitalière exécutée en ville). The Text adds to another set of rather similar measures implemented at the beginning of the year (see our newsletter of January), this time targeting high volumes of prescriptions.

This time, the mechanism only covers certain groups of medicines whose biosimilars have been recently eligible for reimbursement and whose prescription is, at least in part, a hospital prescription dispensed in the community, namely:

  • anti-TNF-alpha products from the etanercept group whose reference biological medicine is Enbrel (Pfizer), and
  • the insulin glargine from the insulin glargine group whose reference biological medicine is Lantus (Sanofi-Aventis).

The reason for this measure lies in the pricing characteristics of these products: while they have the same list price in hospitals, as the net price will be set through a public tender, the reimbursement price in dispensing pharmacies is different.

The Text therefore aims at making hospitals aware of the financial consequences of their choice even when it is not on their own budget. However, the Text should also have direct consequences on the purchasing processes of hospitals.

I.The creation of specific financial incentives

In order to increase the penetration rate of biosimilars, which remains insufficient according to French authorities, the Text establishes two specific financial incentives to encourage the prescription of biosimilars in the abovementioned group of medicines.

The incentive is calculated on the basis of the whole patient pathway in each hospital who has entered into a CAQES with the HAS and is proportional, on the one hand, to the prescription rate of a biosimilar and, on the other hand, to the marginal compensation related to the prescription of a biosimilar of a particular group in place of the reference medicine (remunération marginale, the “RM”), calculated on the basis of the difference of the reimbursement prices of both products.

The first incentive directly applies to all healthcare establishments that entered into a CAQES for 2018. The RM taken into account when calculating their incentive corresponds to 20% of the reimbursed price difference between a biosimilar and its reference biological medicine. The RM is currently of EUR 30 for the etanercept group and EUR 1.75 for the insulin glargine group and is subject to change. .

Second, the Text introduces the possibility to experiment a strengthened incentive scheme which would provide for a direct financial incentive for hospital units (instead of healthcare establishments) concerned by the prescription of the aforementioned medicines (especially rheumatology, gastroenterology or diabetes & endocrinology units). This second scheme, providing for a RM of about 30%, will be subject to the prior conclusion of an action plan between the involved units and the hospital, to be approved by the competent ARS. Thus, the involved units will directly receive a financial incentive whose aggregate amount should correspond to the major part of the compensation paid to hospitals. The payment of such incentive could be made on a semi-annual basis but the specific modalities are yet to be determined.

II. A new fostering of biosimilars’ use

This Text is in line with the policy of French health Authorities supporting the substitution of biosimilars at any time during the course of patients’ treatment, already initiated with the last ministerial order of 12 October 2017 assigning quantitative targets for the prescription of biosimilars by hospitals.

The Text presents the greater use of biosimilars as a way for improving prescribing practices and securing the supply of medicines by increasing the number of available therapeutic alternatives, and specifies that it should generate efficiency margins for the reimbursement of innovative medicines, thus underlying the financial interest of the measure.

Once again, French authorities strongly foster the prescription and use of biosimilars, by providing this time for a compensation to hospitals which is directly proportionate to the rate of biosimilars’ prescription. However, one may wonder how this Text will articulate with the existing public tender rules applicable in public hospitals: the latter might take this financial incentive into account when deciding on the number of products to purchase within a group; moreover, one may wonder if and how the hospitals will take this incentive into account in the financial assessment of the offers, especially in light of the general principle of equality of treatment that should prevail.

It is very likely that similar texts will be adopted for other class of medicines once their biosimilars will be marketed. We therefore recommend to closely monitor future developments in this sector.