Improvements in quality and bioequivalence policies in Latin America
Dr Timothy Riley
In this article, Dr Timothy Riley discusses the opportunities in the emerging market of Latin America. He also takes a look at the improvements in quality and bioequivalence policies that are currently being addressed and compares them with those policies already in place in developed countries such as the UK and the US.
Latin America countries are viewed by much of the pharmaceutical industry as an emerging market that offers considerable commercial opportunity in the next few years. In 2012, a Deutsche Bank market research report estimated the Latin American drugs market to have a an annual value of US $60 billion (7% of global pharma sales).
What is an opportunity to the industry is also a risk to healthcare payers. A greater choice from an expending range of drugs added to pressures from patient groups for improved access, inevitably leads to higher costs.
For many countries, it is a real and present challenge to manage costs and still provide comprehensive health coverage. This challenge is driven, to a significant degree, by the ever-broadening offer of new drugs and health technologies, but also by a more informed public who expect and demand more from their health services.
In Latin America, managing this challenge and maintaining sustainable health funding is very much on the minds of politicians and healthcare payers. Their healthcare services are developing rapidly and the citizens of those countries want more of what they see is available in developed healthcare systems elsewhere in the world, particularly the US.
“For many countries, it is a real and present challenge to manage costs and still provide comprehensive health coverage.”
It could be said that a part of what defines a developed healthcare system is the basket of policies and mechanisms that regulate the entry of new drugs into the market. Taken together, these are rarely an explicit tool to address the affordability of drugs or indeed any new heath technology, but they do control market access, which in turn, moderates the cost impact to the overall healthcare budget.
Since 1999, the UK’s National Institute for Clinical Excellence (NICE) has been viewed by many as the global paradigm for appraising the health economic value of new drugs. Comparable institutions are still to be fully developed in Latin American countries, but there are signs that policies are being developed to consider drug quality, costs and indeed their clinical effectiveness. Indeed, the application of health technology assessment (HTA) to appraise health economic value within LATAM healthcare systems is now becoming visible.
The policies that formalize the role of HTA in market regulation are vital as they provide the permissive environment for national based institutions and the important academic and medical networks to develop.
Development in this area is still in its early stages in Latin America, so it remains to be seen if HTA is used principally as a mechanism for improving quality or something to apply periodically to manage high cost drugs.
Of those countries that have made progress, Brazil has shown significant steps toward a systematic approach to new drug appraisal. In March 2012, CONITEC (National Commission for Incorporation of Technologies in the Unified Healthcare System (SUS)) was formed.
“…between 2002 and 2010 the percentage of biosimilars manufactured in Brazil increased from 27.3% to 87.6%.”
Interestingly, drugs now not only have to achieve marketing approval from the regulator ANVISA, but they also need to evidence their efficacy and safety against existing SUS funded drugs for the same indication, provide economic evaluation, compared with existing alternatives in SUS, and give estimates of the budget impact to SUS.
CONITEC has already shown its has teeth – in October 2012, it rejected seven drugs across different therapy areas. Significantly, the underlying reasons for the negative reimbursement decisions were the failures to provide adequate evidence. This resolve, illustrates a systematic commitment to address quality as much as cost / value considerations.
CONITEC adds to Brazil’s armoury for managing its healthcare costs. The Generics Act of 1999 was already in place to manage rising healthcare costs. The Act required higher standards for generic drug manufacture and bioequivalence data for existing generics. Its aim was to increase the proportional uptake of generic drugs versus expensive branded originals, and to enable the development of a domestic pharmaceutical industry.
A total of 13 years on and, on both counts, it is having an impact. According to government case studies data, between 2002 and 2010 the percentage of biosimilars manufactured in Brazil increased from 27.3% to 87.6%. The positive impact on the health budget is easily compared to what would have been the case with branded medicines. Add this to increasingly rigorous HTA measures and it signals a “game change” for Latin American market access with a shift to upstream mergers, acquisitions and partnerships between Brazilian pharma and global companies.
So, are other Latin American countries following this trend?
Chile and Argentina stand out with growing policy portfolios on managing the introduction of new drugs.
Only within the last month in Chile, the health minister, Jaime Mañalich announced the latest in a series of steps to manage the challenge to healthcare costs and provide a supporting regulatory infrastructure though their National Drug Policy.
“Chile and Argentina stand out with growing policy portfolios on managing the introduction of new drugs.”
Notably, the establishment of a new and autonomous National Agency for Medicines which will – as a public service – monitor, certify and strengthen the regulation of drugs in Chile. Pharmacies will be obliged to sell bioequivalent drugs that have been demonstrated to meet standards set by the Instituto de Salud Publica (ISP). This means that generic drugs can evidence the same safety, quality and efficacy as the innovator, brand or comparator.
The upshot is, that like Brazil, there will be a significant reduction in drug costs to citizens (particularly older people and those with chronic conditions) and to the overall health budget.
In creating the new agency separate from ISP, it shows a reinvigorated priority for drug regulation and a tightening up of quality thresholds for bioequivalent drugs. Anamed becomes a new institution comparable to CONITEC, although it should be noted that this is a very different model from the NICE approach. NICE is concerned with quality standards across all interventions in health, not just drugs. The vision for Anamed will be to cover the entire drug development process from research to marketing.
As far as a growing resource for Latin America, the vision nicely positions Anamed to work more closely with Argentina’s Anmat and Brazil’s Anvisa. With a critical mass now forming, it is conceivable that other Latin American countries will follow this trend to build a network approach that could benefit the pharmaceutical sector with clearer inclusion criteria for reimbursement as well as giving greater access to previously expensive drugs for patients. This is all good news if autonomy from political pressures can be sustained.
About the author:
Dr Tim Riley is CEO of the Wellstate group that includes Wellstate HTA which advises Pharma and Governments on market access and regulation. Dr Riley led the development and establishment of the National Institute of Clinincal Excellence (NICE) in 1999 as the Head of UK government policy for Health Outcomes and Clinical Effectiveness. A frequent commentator on global developments on HTA and market access, Tim Riley has considerable experience as a CEO of NHS payer and provider organisations and is member of the Global Health Leaders Forum (a network including Ministers, Government policy leaders and health CEOs). He is a member of a number of Government groups that include the NHS Futures Forum and the NHS Health Services Research Board as well as specialising in new policy developments in the emerging markets of Latin America.
How will policy improvements affect commercial opportunities in Latin America?