Industry Trend Analysis - Pharmaceuticals & Healthcare Outlook For 2018: Western Europe - FEB 2018

BMI View : Drugmakers in Western Europe will need to continue to assess their business strategies, R&D focus and product portfolios. Despite the growing demand for and consumption of high-value medicines in the region, government focus on the cost-effective prescribing of medicines and the promotion of generic drugs and biosimilars will require companies to seek efficiencies in order to boost revenue streams. It is our view that in addition to employing internal strategies - including the restructuring of business - multinational drugmakers will increasingly participate in discussions regarding industry regulations, drug pricing and sustainable spending.

Despite the increasingly tough regulatory challenges facing drugmakers in Western Europe, the region will remain integral to the commercial prospects of multinational pharmaceutical firms. In 2017, the region will grow by 2.7% year-on-year, from USD262.5bn to USD269.7bn. Over our five-year forecast period (2017-2021), the Western Europe pharmaceutical market will post a 2.8% compound annual growth rate (CAGR) in US dollar terms to USD300.9bn.

The predominant driver of increasing pharmaceutical and healthcare expenditure is the region's growing pensionable population. In particular, the rising incidence of chronic conditions amongst a population with a strong bias towards branded drugs will continue to boost healthcare spending. Nevertheless, cost containment remains high on the agenda of all governments and efficiency measures will weigh on market growth - particularly within Western Europe. Here we highlight two key themes for 2018 that will define the evolving pharmaceutical market landscape of the region, providing a combination of challenges and opportunities for drugmakers.

Concerns Over EMA Business Continuity To Escalate

In 2017, one of the biggest issues facing the European pharmaceutical industry following the UK's decision to leave the EU was the future location of the European Medicines Agency (EMA). In early November 2017, after months of consultations, it was announced that the EMA will relocate to Amsterdam in the Netherlands. The Agency now has just over 16 months to prepare for the move and take up its operations in Amsterdam on 30 March 2019 at the latest. It is our view that in 2018, there will be increased dialogue between the EMA and different stakeholders, including drugmakers, patient groups and national regulatory bodies, to ensure that the Agency can continue to deliver on its mission and protect public and animal health after the UK leaves the EU.

The EMA is responsible for approving medicines for all EU countries, including drug safety monitoring and marketing authorisations. This results in a single marketing authorisation that is valid in all EU countries, as well as in the European Economic Area (EEA) countries of Iceland, Liechtenstein and Norway - a market of around half a billion patients. The relocation of the EMA will impact the entire European pharmaceutical market, potentially slowing down the drug approvals process, leading to approval delays and subsequently hurting company revenue streams.

2018: Increased Scrutiny On EMA Operations
The EMA's Mission
Source: EMA, BMI

In order to prepare for its relocation, the EMA has been working on a business continuity plan aimed at ensuring that the assessment of medicines is not disrupted and that patients in Europe continue to have access to high quality, safe and effective medicines.

  • Since November 2016, the EMA has carried out several staff surveys to help the Agency prepare for staff losses and to improve planning for succession and knowledge transfer. The EMA has stated that some staff losses can be absorbed with its business continuity plan, but beyond a critical threshold the Agency will no longer be able to fulfil its mandate to protect the health of European citizens. In 2018, there will be questions about how the EMA plans to maintain current staffing levels and on the recruitment of additional skilled resources to compensate for staff loss as a result of the relocation.

  • The EMA has an important coordinating role across the European Medicines Regulatory Network, and provides the administrative and scientific secretariat to all of the main scientific committees and working parties, giving the agency access to a pool of over 4,500 experts across the network. In April 2017, the EMA initiated discussions with the national competent authorities on how work related to the evaluation and monitoring of medicines will be shared between Member States in view of the UK's withdrawal from the EU. In June 2017, the EMA's Management Board endorsed principles and a working methodology to successfully undertake a distribution of the workload on the evaluation and monitoring of medicines to ensure high-quality scientific assessments and compliance with legal timelines. The Management Board endorsed the mandates of two working groups, one focusing on human medicines and one on veterinary medicines - that will explore options for a robust allocation of the workload across the European medicines regulatory network and ways to streamline work and further increase capacity in the network. In 2018, the EMA will need to continue to provide drugmakers with information regarding its evolving business continuity plan, in order to ensure that companies are ready to take the necessary steps to enable an undisrupted supply of their medicines.

Biosimilar Competition To Increase

Europe's biosimilar market will continue to develop in 2018. The first biosimilar medicine, Sandoz's Omnitrope (recombinant human growth hormone), was approved in Europe by the EMA in 2006. Between the years of 2007 and 2016, a further 21 biosimilars were approved. Highlighting an increasingly competitive marketplace, between January and November 2017, the EMA approved a 15 biosimilars. Five biosimilar applications are pending as of December 1, 2017 - therefore, the year 2018 may see a further expansion of the biosimilars available in Europe. It is our view that this significant increase in the approval of biosimilars in 2017 and the potential entry of further biosimilars in 2018, will create a more competitive business environment for pharmaceutical companies in the region in 2018.

An Increase In Approvals In 2017
The Number Of Biosimilar Approvals By The EMA
Source: EMA, BMI

Furthermore, highlighting the European Commission's focus on increasing the consumption of biosimilar medicines (and subsequently competition) in the region in 2018 and onwards, in November 2017, the European Commission published translations of the Q&A paper 'What I Need to Know about Biosimilar Medicines - Information for patients', making it available in 23 official European languages. The Q&A was written in order to provide patients with easy-to-understand information about biosimilar medicines and to empower patients by providing answers to the most frequently-asked questions on biosimilar medicines. Additionally, in 2018, the EC is looking to publish its biosimilar information guide for healthcare professionals in six additional EU languages in the first six months of the year. The guide aims to provide reference information on the scientific and regulatory support for the use of biosimilars in the EU. The EC is also organising a stakeholder workshop on biosimilars that will take place in September 2018. The focus of the workshop will be oncology, public procurement, and the role of nurses and pharmacists in spurring biosimilar uptake.

Biosimilars Approved By The EMA
Medicine Name Active Substance Common Name Marketing Authorisation Holder Authorisation Date
Source: EMA, BMI
Cyltezo adalimumab adalimumab Boehringer Ingelheim 10/11/2017
Imraldi adalimumab adalimumab Samsung Bioepis 24/08/2017
Insulin lispro Sanofi insulin lispro insulin lispro Sanofi 19/07/2017
Ritemvia rituximab rituximab Celltrion 13/07/2017
Blitzima rituximab rituximab Celltrion 13/07/2017
Rituzena (previously Tuxella) rituximab rituximab Celltrion 13/07/2017
Erelzi etanercept etanercept Sandoz 23/06/2017
Riximyo rituximab rituximab Sandoz 15/06/2017
Rixathon rituximab rituximab Sandoz 15/06/2017
Amgevita adalimumab adalimumab Amgen 22/03/2017
Solymbic adalimumab adalimumab Amgen 22/03/2017
Truxima rituximab rituximab Celltrion 17/02/2017
Movymia teriparatide teriparatide Stada Arzneimittel 11/01/2017
Lusduna insulin glargine insulin glargine Merck Sharp & Dohme 04/01/2017
Terrosa teriparatide teriparatide Gedeon Richter 04/01/2017
Thorinane enoxaparin sodium enoxaparin sodium Pharmathen 15/09/2016
Inhixa enoxaparin sodium enoxaparin sodium Techdow Europe 15/09/2016
Flixabi infliximab infliximab Samsung Bioepis 26/05/2016
Benepali etanercept etanercept Samsung Bioepis 14/01/2016
Accofil filgrastim filgrastim Accord Healthcare 18/09/2014
Abasaglar (previously Abasria) insulin glargine insulin glargine Eli Lilly 09/09/2014
Bemfola follitropin alfa follitropin alfa Gedeon Richter 27/03/2014
Grastofil filgrastim filgrastim Apotex 18/10/2013
Ovaleap follitropin alfa follitropin alfa Teva Pharma 27/09/2013
Inflectra infliximab infliximab Hospira 10/09/2013
Remsima infliximab infliximab Celltrion 10/09/2013
Nivestim filgrastim filgrastim Hospira
Filgrastim Hexal filgrastim filgrastim Hexal 06/02/2009
Zarzio filgrastim filgrastim Sandoz 06/02/2009
Ratiograstim filgrastim filgrastim Ratiopharm 15/09/2008
Tevagrastim filgrastim filgrastim Teva 15/09/2008
Silapo epoetin zeta epoetin zeta Stada Arzneimittel 18/12/2007
Retacrit epoetin zeta epoetin zeta Hospira 18/12/2007
Epoetin Alfa Hexal epoetin alfa epoetin alfa Hexal 28/08/2007
Abseamed epoetin alfa epoetin alfa Medice Arzneimittel Putter 28/08/2007
Binocrit epoetin alfa epoetin alfa Sandoz 28/08/2007
Omnitrope somatropin somatropin Sandoz 12/04/2006