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.
|Medicine Name||Active Substance||Common Name||Marketing Authorisation Holder||Authorisation Date|
|Source: EMA, BMI|
|Insulin lispro Sanofi||insulin lispro||insulin lispro||Sanofi||19/07/2017|
|Rituzena (previously Tuxella)||rituximab||rituximab||Celltrion||13/07/2017|
|Lusduna||insulin glargine||insulin glargine||Merck Sharp & Dohme||04/01/2017|
|Thorinane||enoxaparin sodium||enoxaparin sodium||Pharmathen||15/09/2016|
|Inhixa||enoxaparin sodium||enoxaparin sodium||Techdow Europe||15/09/2016|
|Abasaglar (previously Abasria)||insulin glargine||insulin glargine||Eli Lilly||09/09/2014|
|Bemfola||follitropin alfa||follitropin alfa||Gedeon Richter||27/03/2014|
|Ovaleap||follitropin alfa||follitropin alfa||Teva Pharma||27/09/2013|
|Nivestim||filgrastim||filgrastim|| Hospira ||08/06/2010|
|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|