white paper on public procurement of biological medicines...value-based evaluation p. 15 p. 16...

WHITE PAPER ON

Public Procurement of Biological Medicines

JUNE 2015

3

Table of contents

Executive summary

Introduction

EU policy framework

Procurement of biological medicines: current practice

p. 6

p. 8

p. 9

p. 11

Single winner-takes-all v. multiple

winners, multiple choices

Price-based evaluation v.

value-based evaluation

p. 15

p. 16

Introduction

Assessment criteria used in the

EuropaBio review

Types of public procurement of

biological medicines

p. 11

p. 13

p. 14

Combination of types of

public procurement –

some illustrative examples p. 18

Cross-border joint procurement

Key EuropaBio recommendations

Annexes

p. 20

p. 23

p. 26

Case studies

Template Research

Questionnaire

p. 28

p. 37

References

1.

2.

3.

4.

5.

6.

7.

4.1.

4.2.

4.3.

4.3.1

4.3.2

4.4

7.1.

7.2.

8. p. 38

6

Executive summary

1.

In February 2014 the EU adopted a new

legislative package on public procurement.

Member States are expected to transpose the

EU Directives by 18 April 2016. The transposition

of these new rules in national law offers a

timely opportunity to address issues related

to the application of the public procurement

rules for the purchase of complex medicinal

products, namely biological medicines,

including vaccines.

This White Paper aims at presenting the

key findings of research conducted by

EuropaBio between September and November

2014 on national practices for procuring

biological medicines across the European

Union (EU). This research is based on the direct

feedback of EuropaBio member companies

participating in public tenders in 14 countries

in the European Economic Area (EEA) and on a

review of the existing literature on public

procurement rules. The input of EuropaBio

member companies on national procurement

was collected based on a detailed

questionnaire (see Annex I and II) and analysed

by a group of EuropaBio experts.

The internal EuropaBio research reveals

that in recent years national public

authorities are increasingly using public

procurement to purchase medicinal products.

Tendering practices differ considerably across

national jurisdictions in Europe. To assess such

a complex and fragmented landscape,

EuropaBio developed a specific analytical

framework based on a number of assessment

criteria. Although the overarching parameter

to assess procurement practices across Europe

is “access to treatments for patients”, a number

of additional specific criteria were identified

by EuropaBio experts, as follows: competition;

access to multiple therapeutic solutions;

change of therapy for treated patients;

interchangeability/assessment of therapeutic

equivalence; award criteria; transparency.

Our research has led us to the definition of

three recurring types of public procurement:

1. Single “winner-takes-all” v. multiple

winners, multiple choices;

2. Price-based evaluation v. value-based

evaluation;

3. Cross-border joint procurement.

Building on its own analysis, EuropaBio was

able to draw some key recommendations to

guide the future procurement of biological

medicines (see box on next page). EuropaBio is

ready to contribute to any stakeholder dialogue

that the European Commission and any other

institutions would put in place, including any

other rules falling under the competence of the

EU such as the cross-border joint procurement

rules under Decision 1082/2013/EU

7

on serious cross-border threats to health.

EuropaBio is committed to making sure that

public procurement rules are appropriately

implemented and used to provide European

patients with the best available therapies on

the market.

EuropaBio public procurement recommendations

1. Reflect patients’ needs and allow freedom

of choice for doctors/patients, by ensuring

that treatment options are not limited and

decisions can always be made by a physician

in consultation with patients;

2. Respect physicians’ prescribing authority as

regards decisions to keep treated patient

with their current treatments;

3. Take into account the complexity of

manufacturing practices for biological

medicines, and thus allow for sufficient

lead times;

4. Be awarded based on careful consideration

of additional criteria besides price;

5. Foster fair market competition and

innovation.

Public tenders for biological medicines, including vaccines, should:

8

Introduction

2.

The adoption of the new European legislative

package for public procurement in February

20141 sets a more efficient and flexible

framework for the public procurement of

goods, works and services across the Union.

While the competent authorities are

working towards the transposition of these

rules into national law by April 2016, there

is a need to consider how these will apply

to the procurement of complex products

such as biological medicines and to explore

whether the development of sector-specific

recommendations for transposition is needed.

These recommendations could guide the

relevant national competent authorities in the

effective application of the new rules.

The report starts with a summary of the new

legislative package for public procurement,

with a focus on its relevance for biological

medicines, and previous EuropaBio positions

on the matter. The following section introduces

an analytical framework to describe national

practices for the procurement of biological

medicines across Europe and then provides

concrete examples drawn from the experience

of EuropaBio members. The final section

describes in more detail the key EuropaBio

recommendations for the procurement of

biological medicines, including vaccines.

9

EU policy framework

3.

In February 2014, the EU adopted the legislative

package on public procurement which

aimed at an in-depth modernisation of public

procurement in the EU. The objectives behind

this package of legislations were two-fold:

1) an increase in the efficiency of public

spending; and 2) supporting common

societal goals through a better use of public

procurement. Member States are expected

to transpose the Directives by 18 April 2016.

The new package, which applies to the

procurement of goods, works and services,

modernises and adds flexibility to previous

rules dating back to 2004. It also allows for

the inclusion of common societal goals in the

procurement process, such as environmental

protection, social responsibility, innovation,

combating climate change, employment,

public health and other social and

environmental considerations.

EuropaBio assessment

EuropaBio members welcome the new

directives on public procurement as they

promise to simplify and modernise the existing

rules. In particular, EuropaBio welcomes the

following provisions of relevance for the public

procurement of biological medicines:

· Simplification of procedures:

The new Directive introduces a number of

simplified rules and procedures, including

an Innovation Partnership – to fill innovation

gaps in the market – and a negotiated

procedure without prior publication2.

The latter applies in case products are,

for example, only supplied by one economic

operator in order to ensure the protection

of exclusive rights such as intellectual

property rights.

· Updated award criteria:

By clearly recommending the “Most

Economically Advantageous Tender” (MEAT)

criterion3, public authorities are requested

to place more emphasis on quality,

environmental considerations and social

aspects or innovation, in particular taking

into account the price and life-cycle cost of

what is procured. While until now the focus

was placed on the “lowest price” criteria, with

the reinforcement of the MEAT criteria in the

new Directive the best value for money can

be achieved by taking into account common

societal goals.

10

· Benefits for Small and Medium

Size Enterprises:

The revised rules facilitate the access of

SMEs to public procurement, for instance by

dividing contracts into lots and by reducing

requirements for participation.

· Sound procedures and governance:

Member States are asked to ensure

that the procurement procedures are

transparent and properly monitored, with an

implementation report transmitted to the

European Commission every three years.

11

About biological medicines

About biosimilars

Procurement of biological medicines: current practice

4.

4.1. Introduction

A biological medicine is a product whose active

ingredient is a biological substance. The latter is

material that is produced by or extracted from a

biological source and that needs a combination

of physico-chemical- and biological testing for its

characterisation, quality determination, production

process and production control. As biotechnology-

derived medicines comprise proteins that would be

digested and would never reach the site of action

when taken orally, biological medicines are typically

administered by injection or infusion.

Biological medicines include products developed by

DNA recombinant technology or antibody methods,

vaccines and products derived from human blood and

human plasma4. Being produced by living systems,

biotechnology-derived medicines are highly sensitive

to minor changes in their physiological environment,

thus meaning that their physicochemical and

biological attributes are more variable than traditional

small-molecule pharmaceuticals. This makes them

more difficult to characterise and replicate. In turn,

this also has implications in the way these products

are procured, stored and dispensed to patients. One of

the most common examples of biological medicines

is vaccines. Vaccines are used to produce or improve

immunity against a particular disease by inoculating

killed or weakened disease-causing micro-organisms

in the human body: in this way the production of

antibodies is stimulated. Because of their nature,

vaccines, as other biological products, require specific

and careful handling at all stages.

Three decades on after the first biological medicines

were launched, exclusivity rights on the early biological

medicines have begun to expire, paving the way for

the introduction on the global market of off-patent

versions of biologic medicines, i.e. biosimilars. The

latter are developed to be similar to an existing

biological medicine (the “reference medicine”) and

are marketed once the exclusive rights have expired5.

Biosimilars assessed by the EMA are approved if they

have demonstrated similar quality, safety and efficacy

as the reference medicine6. However, their approval

does not include any recommendation regarding

their interchangeability or substitutability with

the originator product they reference. Decisions of

interchangeability and/or substitution rely on national

competent authorities.

Public procurement has been defined as

“buying pharmaceuticals by purchasers like

public hospital associations on the basis

of a – often strictly defined – tendering

procedure with granting of the contract to

the pharmaceutical company/importer who

offered the best bid.7” For the purpose of this

White Paper, we will follow this definition.

12

Within Europe, many countries use public

procurement for the provision of medicinal

products and particularly in hospital settings.

These procurement practices include both

small chemical molecules and biological

medicines8. Because the organisation of

national healthcare systems varies greatly

across Member States, the practice of public

procurement for medicines also differs

considerably across national jurisdictions.

Such practices range from largely public to

largely private funding, with the UK National

Health Service having the highest percentage

of government funding, to countries such as

Cyprus and Italy where many hospitals are

receiving more substantial funding from the

private sector.

13

To evaluate the public procurement situation

in Europe more easily, it is important to

highlight some underlying trends. Based on

its own research and analysis, EuropaBio has

elaborated the following six assessment criteria:

4.2. Assessment criteria used in the EuropaBio review

EuropaBio Assessment Criteria

Available Attributes & Attributes’ Weight

Best Practice Attributes

Competition: sets out the degree to which the tender

provided a single winner or multiple winners

Single winner = 0

Multiple winners = 1

Multiple winners

Access to multiple therapeutic solutions: determines whether, after the public procurement

process is completed, patients have (or continue to

have) access to multiple therapeutic choices or if

(as a consequence of the award decision) they are

restricted to the treatment offered by the winner of

the tender

Restricted = 0

Allowed = 1

Allowed

Change of therapy for treated patients: reflects

whether the affected patients already undergoing

the treatment have it substituted after the public

procurement process is completed or if they have the

option of keeping with the same therapeutic plan

Limited doctors’

discretion = 0

At doctors’ discretion = 1

At doctors’ discretion

Interchangeability / assessment of therapeutic equivalence: assesses whether the procurement rules

are based on interchangeability9 or not, i.e. assesses

if tenders acknowledge inherent differences among

biological medicines or if they are arbitrarily grouped

together regardless of whether an assessment of

therapeutic equivalence exists

Not mentioned = 0

Mentioned = 1

Mentioned

14

EuropaBio Assessment Criteria


Best Practice Attributes

Award criteria: takes into account the criteria used

by the purchasing agency in evaluating and awarding

the tender, including whether there was a narrow

focus on best price/lowest costs or whether the

procurement procedure takes into account multiple

factors, including quality, capacity, credibility, etc.

Price only = 0

Qualitative criteria

and price = 1

Qualitative criteria and price

Transparency: evaluates whether the process by

which the public procurement was conducted was

perceived as transparent

Low = 0

Up to Standard = 1

Up to Standard

The EuropaBio evaluation of the case studies

included in Annex was conducted by applying

the 6 criteria above. Case studies scoring 5/6 or

above in the grid above were deemed well-

designed/well-implemented tenders and

therefore labelled “best practices”.

Case studies scoring between 4/6 and 5/6 were

deemed “good, but improvable’, therefore

labelled “good practices”. Case studies below

4/6 were deemed not well-designed/well-

implemented tenders and therefore labelled

“bad practices”.

Based on examples collected among EuropaBio

and the assessment criteria identified above,

three types of public procurement of biological

medicines in Europe were identified:

1. Single “winner-takes-all” v. multiple winners,

multiple choices;

2. Price-based evaluation v. value-based

evaluation;

3. Cross-border joint procurement.

Examples of countries are included at the end

of each section. It should be noted that one

country can fall within different types of public

procurement. This complexity is illustrated in the

section 4.4 related to Combination of types of

public procurement.

4.3. Types of public procurement of biological medicines

15

The single winner-takes-all

· This represents the cases where

the tenders result in a single winner and

which consequently lead to a limited

(single) treatment choice as well as

treatment substitution of patients already

on other therapies.

· There are circumstances where “single

winner” leads to single choice of therapy

for new patients but not to treatment

substitution for existing patients.

This is the case in Italy, where the country’s

law requires (for public health reasons)

that treated patients are not switched to

another therapy, thus ensuring continuity

of treatment.

· An important consideration within this type

is that the interchangeability of biological

medicines is often not taken into account

in the procurement. In one case of winner-

takes-all such as in Hungary there is a clear

consideration of the interchangeability of

the biological medicines whereas in many

recorded cases, the interchangeability

(or lack thereof) was clearly neglected.

· The winner-takes-all type restricts choice

and can lead to automatic substitution of

therapies without consent from a physician.

This practice has potential negative

consequences for patient safety as it can

lead to switching of medicines without a

clear medical reason. It is inappropriate

for biological medicines and may lead to

potential negative health outcomes, or even

adverse reactions, for patients. Ultimately,

the public procurement of biological

medicines should always foster physicians’

freedom of prescription choice by ensuring

that a number of therapeutic options are

available to appropriately treat patients.

· In this type of procurement, procurers

become dependent on the single winner

(and supplier); hence, vulnerable to

potential shortages in medicines in

case the single supplier experiences

unexpected circumstances.

· The winner-takes-all type of tender can have

direct impact on the market. By limiting

the number of providers, it can impact

competition and distort market efficiency.

In addition, a single market provider increases

the risk of shortages given the difficulty to

manufacture biological medicines.

· The impact on market competition with this

procurement type is particularly acute when

it is coupled with so-called “decentralised”

forms of tender organisation. In this sub-type,

procurement practices may take the shape

of (individual) negotiations between suppliers

and local purchasing groups/hospitals, rather

than competitive tenders. Arguably, in these

(decentralised winner-takes-all) procurement

sub-types the level of market competition is

4.3.1. Single winner-takes-all v. multiple winners, multiple choices

16

significantly lower than in more centralised

(competitive) winner-takes-all tenders. In

cases of perceivably biased negotiations, this

may even lead to potential suppliers pulling

out of the competition. Ultimately, designing

and organising tenders that enable free

competition is crucial in order to maintain

full participation of market players and

therefore delivering the best available

products to the patients.

· The European countries that broadly fall under

this type are: Cyprus, Germany, Hungary,

Netherlands, Poland, Spain and the UK.

Multiple winners, multiple choices

· This type is defined by tenders that lead to

multiple winners and thus offer patients and

their physician’s therapeutic choices.

· In a few cases, where multiple winners each

dominate a certain portion of the market

(when a tender is divided in lots), some

patients are forced to switch treatment

without prior decision from a physician.

This is the case in some examples from

Poland and the UK where each winner gains

its own lot, leading to a re-shuffle in the

number of patients per treatment in order

to fulfil the quantity requirements.

· There is no clear pattern identifiable that

interchangeability of biological medicines

(or lack thereof) is taken into consideration

within these types of tenders.

· The European countries that broadly fall

under this type are: Croatia, Italy, Norway,

Portugal, Slovenia and Spain.

Price-based evaluation

· Price based evaluations are procurements

that are evaluated and awarded on the

sole criterion of the cheapest price.

This type of tender is primarily used as

a cost-containment tool and aimed at

reducing the costs of a product. It does not

take into account other potential evaluation

factors such as quality or the reliability

of supply.

· Price-based evaluation is more prevalent

in single-winner-takes-all situations than

in multiple-winners/multiple-choices

situations. This is an understandable

correlation considering that the procurer

in this type aims to select the single

cheapest provider.

· Only if two or more providers offer almost

identical low prices, in some instances, the

purchasing authority may consider other

award criteria such as quality.

4.3.2. Price-based evaluation v. value-based evaluation

17

· The price-based evaluation has a strong

drawback: medication or vaccination is not

selected based on patient’s needs of various

therapeutic options, quality of supplier

and predictability of supply or its clinical

attributes, but on its price tag. In addition,

lowest price does not automatically imply

best value for public money.


under this type are: Cyprus, Denmark

(to some extent), Germany, Hungary, Italy,

Norway, Poland, Portugal, Slovenia

and the UK.

Value-based evaluation

· This type reflects procurements that are

evaluated and awarded based on multiple

criteria – in addition to price. These criteria

include quality, capacity, assurance,

credibility of the supplier, and suitability

of the product for the treatments,

among others.

· This type of evaluation is preferred for

biologics in particular over the simple

price/cost-based evaluation for a number

of reasons. Firstly there is a higher regard

for the inherent complexities of biological

medicines, including suitability of the

medicine for the patient; secondly there is

a stronger adherence to product labels

and to clinical practice guidelines.

Thirdly, while considering (life-cycle)

costs instead of price it provides a more

comprehensive cost-effectiveness analysis

and allows for better estimation of the

budget impact and therefore is more

valuable for the procurer. The only caveat

is when a value-based evaluation eventually

leads to a single-winner-takes-all scenario,

as this could restrict the options for

the patient.

· In some cases, such as Denmark, while

value-based evaluations are undertaken,

price often remains the main final criteria for

awarding a tender.


under this type are: Denmark (to some

extent), Ireland, Italy (to some extent),

Spain and the UK.

18

4.4. Combinations of types of public procurement – some illustrative examples

To illustrate the types described above,

two relevant examples will be presented in

this section, integrating each of the main

types. Detailed characteristics about the

examples below are available in the annex of

this report:

A. Slovenia (centralised procurement,

winner-takes-all, price/cost-evaluation)

In 2014, the Slovenian Ministry of Health set

out a public procurement for the supply of

erythropoietin (a hormone that controls red

blood cell production). The reasoning behind

the tender was a reduction in costs of medicine

spending as well as a reorganisation of

procurements of medicines used in hospitals.

The tender was centrally organised, designed,

and evaluated by the scientific committee of the

Ministry of Health. The evaluation criterion for the

tender was price/cost. In this instance, both the

reference product and its biosimilars compete

for the same patients with the bidders bidding

for predefined lots. With the best price winning

the lot, the winner is granted the entire market

and patients as well as physicians are confined

to a single treatment choice. Existing patients’

treatments are changed in favour of the medicine

of the winner of the tender. As such, any issues

related to the possible lack of interchangeability

were ignored. As the tenders of these lots take

place every six months, it creates complex

situations on treatment continuance and product

traceability. The proceedings were deemed

non-transparent due to their complexities and

disregard for the different types of medicines.

19

This practice does not appear to take

innovation into account, which is a

fundamental issue for the biopharmaceutical

sector, where certainty about the reward of

innovation is a key element, particularly for

the survival of SMEs. This practice does not

appropriately account for patient’s needs either.

Potentially, this practice may lead to

situations where patients under successful

treatment are substituted at pharmacy level.

B. Ireland (decentralised, multiple winners &

multiple choices, value-based evaluation)

In 2013, Ireland conducted a local procurement

for the Supply of Filgrastim 30MU and 48MU

solution or concentrate for injection. The reason

for the tender was to reduce the spending on

medicines by a hospital pharmacy.

The evaluation of the proposals of the bidders

was value-based, with a weighted assessment

“palette” including a 40% weight on price,

30% on product quality, and 30% on product

suitability to meet the needs identifed by

the purchasing authority. The decentralised

procurement featured a tender designed and

awarded by the local hospital via its internal

pharmacist (looking after tender design only)

and the Haematologist and Pharmacy Business

Manager (making final decision). The tender led

to multiple winners, with the award distributed

70%, 20%, and 10% among the various winners.

As such, patients had multiple choices to

choose from for their treatment. Moreover,

this ensured that patients were not forced to

substitute their current treatment. Admittedly,

the procurement was technically facilitated

by the fact that the tender was for filgrastim

molecules only, therefore the available

suppliers licensed on the Irish market were

also limited. However, this does necessarily

imply that multiple-winners tenders cannot

be successfully organised for other or broader

therapeutic classes.

20

At a general level, cross-border joint procurement

is the purchase of a good by two or more public

purchasing authorities from different Member

States through a joint call for tender. While today

there is no experience with cross-border joint

procurement in the EU, it may be possible that

some Member States start using this instrument

in the future.

Medicines can be jointly purchased cross-border

via two different legal mechanisms:

· Article 5 of the decision on cross-border

health threats: originally, the mechanism was

designed to address urgent needs associated

with an emergency pandemic context (e.g.

H1N1) where fast access and global availability

to a specific medicinal product were critical

constraints. The current Joint Procurement

Agreement (JPA) allows for the tendering of

countermeasures for communicable diseases10.

With regard to medicines, it is arguably limited

to communicable diseases only; and

· EU (general or internal market) procurement

rules: this mechanism already existed under

the old public procurement rules, but has

been simplified under the new rules to ensure

that Member States can easily bundle tenders

of simple products which do not require very

technical specifications. As stated in recital 2 of

Directive 2014/24/EU on public procurement,

the new EU procurement rules were revised

also in order to support the achievement of

smart, sustainable and inclusive growth while

ensuring the most efficient use of

public funds.

In general, principles applying to national public

procurement of biological medicines should

also apply to cross-border joint procurement

but considering the multi-national aspect of this

instrument, the following additional principles

should be considered:

· The practice of “forum shopping” between

jurisdictions should be regulated so as to

respect national health policy objectives

and to avoid detrimental effects on patient

access and clinical outcomes. In cross-border

procurement agreements under the EU

general procurement rules, it is foreseeable

that contracting authorities select the national

jurisdiction that has the most favourable rules

and procedures to achieve their objectives.

Given that European healthcare systems are

different in terms of health policy objectives

and patient care delivery mechanisms,

it is important that joint cross-border

public procurement agreements take into

consideration such diversity and lay ground

rules on both the procurement objectives and

the best applicable jurisdiction.

Cross-border joint procurement

5.

21

· In circumstances where the EU plays a role

in joint cross-border procurement,

the principles regulating the competence

area of Member States should be respected:

subsidiarity and proportionality are

fundamental principles which guarantee

that action at EU level is justified in light of

the national situations11 and limited to what

is necessary to achieve the objectives of the

Treaties12. It is important, for instance, that,

when a JPA mechanism is used,

Member States carefully assess whether this

new purchasing practice distorts competition

compared to existing practices and

alternative purchasing mechanisms available

in the country. If Member States have not

experienced any difficulties in procuring

medical countermeasures, the use of the JPA

may in fact undermine otherwise functioning

competition in the domestic market.

· In the context of the Decision on serious

cross-border threats to health,

serious public health issues should be

addressed in a holistic way: joint

cross-border public procurement

alone cannot address public health issues

and should be accompanied by other public

health measures, such as prevention and

health promotion programmes. In the case of

vaccines, the lack of coordination of national

immunisation programmes between

countries and the lack of coverage within

countries should be addressed first, to reduce

inequalities of access to vaccination.

· Joint cross-border public procurement

should not create a situation of European

monopoly, and should create a level playing

field for all potential providers. The experience

with the joint purchase of vaccines13 shows

that market specificities (for example, small

number of suppliers with limited volume

and a high fixed cost of production) can

lead to suppliers being pushed out of the

market. Joint procurement should allow

for multiple/“split winners” to ensure fair

competition and avoid negative impact on

market structure.

· Access to joint cross-border public

procurement should also be encouraged

for innovative small and medium sized

enterprises (SMEs) by, for example, avoiding

the creation of unnecessary administrative

requirements.

22

· Regardless of the procedure, ultimately,

it is of paramount importance that no

cross-border joint procurement mechanism

creates additional delays in the process of

getting innovative treatments to patients.

In case JPAs are initiated, it is crucial that

the additional JPA procedures are integrated

into the overall timelines for pricing and

reimbursement of medicinal products,

as mandated by EU and national laws,

and do not unduly extend the amount of

time patients have to wait before accessing

medical treatment.

23

Based on both the examples collected by

EuropaBio member companies in several

countries from the European Economic Area

(EEA) and the types defined in the previous

chapter, some key recommendations for

the appropriate procurement of biological

medicines can be drawn for the benefit of

future procurers and regulators. They are

summarised below:

Recommendation 1:

Tenders should reflect patients’

needs and allow freedom of choice

for doctors/patients, by ensuring

that treatment options are not

limited and decisions can always be

made by a physician in consultation

with patients.

· Public procurement used for the purchase

of biological medicines should provide for

a sufficiently broad choice of medicinal

products: ideally a variety of medicines

should be available for physicians

and patients instead of a single medicine.

Public procurement should foster this diversity

of suppliers by ensuring the final allocation of

contract is not limiting doctors/patients to one

treatment choice.

· Two biological medicines are not identical:

public procurement should take into

consideration the diversity of therapeutic

needs of patients. In order to ensure that

procured medicines meet the needs of

patients, any grouping of medicines in a

potential tender lot, even more so when

these are biological medicines,

should only include products that are

therapeutically equivalent.

· Physicians’ freedom of choice and accurate

patient information should be promoted

by tenders: The relationship between

patient and healthcare professional is

crucial for ensuring the best treatment/care

decisions and health outcomes for each

patient. All available therapeutic options

should be discussed thoroughly and

healthcare professionals should ensure that

patients understand the options, relative

benefits and risks.

Key EuropaBio recommendations

6.

24

Recommendation 2:

Tenders should respect physicians’

prescribing authority as regards

decisions to keep treated patients

on current treatments

· The fact that biological medicines cannot be

simply interchanged needs to be reflected

in the design of public procurements.

Ultimately, the public procurement of

biological medicines should always foster

physicians’ freedom of prescription choice.

· Treated patients should not be switched:

it is important that public procurement does

not lead to the unintended switch of a treated

patient to another biological medicine during

the course of his/her treatment. As such,

winner-takes-all tenders should be avoided,

so that treatment options are not limited and

decisions can always be made by a physician

in consultation with patients.

Recommendation 3:

The complexity of manufacturing

biological medicines should

be considered in procurement

processes and sufficient lead times

should be granted

· Public procurement should take into

account the complexity of biological

manufacturing and allow for sufficient

stability and predictability:

Biological processes are highly specialised

and time-consuming. For example,

in the case of vaccines and other biological

medicines, time between reception of raw

materials to final packaging and shipment

can take from 3 months (e.g. protein-

replacement therapies) to 26 months

(e.g. complex vaccines) depending on the

complexity of the product. It is therefore

paramount that tender contracts are

sufficiently stable and accurately predict

demand over a sufficiently long period of time

in order to guarantee stable supply.

Recommendation 4:

Price should not be the only

decision-making criterion

· Public procurement decisions should be

based on a variety of criteria:

the allocation of final contracts should not

be based only on price or cost, but should

take into account the overall value, such as

the reliability of supply, characteristics of the

products (for example the ease of route

of administration or the value for patients and

healthcare systems). The introduction of the

concept of Most Economically Advantageous

Tender (MEAT) criteria with best price/

quality ratio in the revised EU general public

procurement rules is a first step toward the

full inclusion of quality criteria in public

procurement. Criteria such as environmental

impact, social aspects, quality or technical

merit among others should generally be

considered when procuring biologics.

25

Recommendation 5:

Public procurement should

foster fair market competition

and innovation

· Growth, competitiveness and innovation

should be key political drivers underpinning

public procurement practices: all national

public procurement practices should support

the long-term EU policy objective to foster

innovation, growth and competitiveness

(Europe 2020) by ensuring that innovation is

valued and appropriately rewarded.

· Public procurement applied to biological

medicines should be considered as a tool

for fair competition to foster incentives

for innovation and ensure sustainable

market conditions: There needs to be a

balance between short-term cost savings

and longer-term incentives for innovation.

In this context, the bundling of on- and off-

patent biological medicines in a single tender

should be avoided. Procurement of on-patent

(or innovator) biological medicines should

generally be made by way of the

negotiated procedures.

· Fair and transparent competition between

potential providers should be encouraged:

calls for tender should be designed in such

a way that they guarantee fair competition

between all potential suppliers. Transparency,

including of the definition of eligibility criteria

and the decision-making process leading to

the award decision, should be a critical feature

of every tendering process.

· Preliminary discussions with the

different bidders help ensure that the

needs of purchasing authorities are met:

purchasing authorities should engage with

bidders in preliminary market discussions

to better evaluate the potential offers.

An early dialogue would also ensure that

the purchasing authorities may access

at the right time and place any potential

commercially confidential information

which they may later need to assess while

reviewing the different offers. Finally, such a

dialogue may help to assess the constraints

on manufacturing and supply capacity for

a tender – this is especially true in the field

of vaccination where the manufacturing

process (and therefore lead times) can be

particularly complex.

· Volume commitments from purchasing

authority: purchasing authorities

should provide guidance on the volume

commitment as part of the tender

announcement so that the manufacturer

has a good understanding of what volumes

are being asked by the purchasing authority

over the tender duration.

26

Annexes

7.

Source: examples reported by EuropaBio

members companies based on their

experiences as bidders

(anonymised as per EuropaBio antitrust rules

and to respect commercial confidentiality).

Country where tender took place

Tender Date Tender Scope EuropaBio Evaluation

1. Croatia 2014 Regional Best

2. Cyprus 2014 National Good

3. Denmark 2013 National Good

4. Germany 2014 National Bad

5. Hungary 2014 National Bad

6. Ireland 2013 Local/Hospital Best

7. Italy 2014 Regional Best

8. Netherlands 2014 National Bad

9 Norway 2014 National Bad

10. Poland 2014 Local/Hospital level Bad

11. Portugal 2012 National Bad

12. Slovenia 2014 National Bad

13. Spain 2013 / 2014 National and regional Bad

14. & 15. UK 2008 / 2009 Regional Bad

Table of contents

27

Case Study Number

Country Year National / Regional procurement

Description Short description of some specific features of the tender at hand.

EuropaBio assessment EuropaBio Assessment Criteria Available Attributes & Attributes’ Weight

Competition: sets out the degree to which the tender provided a single winner or multiple winners

Single winner = 0Multiple winners = 1

Access to multiple therapeutic solutions: determines whether, after the public procurement process is completed, patients have (or continue to have) access to multiple therapeutic choices or if (as a consequence of the award decision) they are restricted to the treatment offered by the winner of the tender

Restricted = 0Allowed = 1

Change of therapy for treated patients: reflects whether the affected patients already undergoing the treatment have it substituted after the public procurement process is completed or if they have the option of keeping with the same therapeutic plan

Limited doctors’ discretion = 0At doctors’ discretion = 1

Interchangeability/assessment of therapeutic equivalence: assesses whether the procurement rules are based on interchangeability9 or not, i.e. assesses if tenders acknowledge inherent differences among medicines – small molecules or biological medicines – or if they are arbitrarily grouped together regardless of whether an assessment of therapeutic equivalence exists

Not mentioned = 0Mentioned = 1

Legend

Award criteria: takes into account the criteria used by the purchasing agency in evaluating and awarding the tender, including whether there was a narrow focus on best price/lowest costs or whether the procurement procedure takes into account multiple factors, including quality, capacity, credibility, etc.

Price only = 0 (or also “price mainly”)Qualitative criteria and price = 1

Transparency: evaluates whether the process by which the public procurement was conducted was perceived as transparent

Low = 0Up to Standard = 1

EuropaBio evaluation Best practice ≥ 5/6

Good practice 4/6

Bad practice < 4/6

28

7.1. Case studies

Case Study 1 Croatia 2014 Regional procurement

Description This tender aimed at selecting a supplier for a variety of products, divided into different lots. As required by law, the procurement of biological medicines in Croatia is carried through an annual routine hospital tender. Led by a hospital tender commission, this regional procurement is split into different lots comprising different medicines. Generally, lots are specified by Anatomical Therapeutic Chemical (ATC) Classification System14 and/or International Non-Proprietary Names (INN). In the case of originator biological medicines and their follow-on biosimilars, both products were separated into two lots specifying quantities for the originator medicines and for quantities for any new patients. For each lot, the winners are selected on the basis of a best price selection criterion.

EuropaBio assessment EuropaBio Assessment Criteria


Competition Multiple winners = 1

Access to multiple therapeutic solutions Allowed = 1

Change of therapy for treated patients At doctors’ discretion = 1

Interchangeability/assessment of therapeutic equivalence

Not mentioned = 0

Award criteria Qualitative criteria and price = 1

Transparency Up to Standard = 1

EuropaBio evaluation Best practice 5/6

29

Case Study 2 Cyprus 2014 National procurement

Description This tender aimed at selecting a supplier for biological medicines in the therapeutic areas of rheumatology, gastroenterology & dermatology for new patients. A second tender was issued for existing patients treated with biological medicines indicated for the same therapeutic areas. It was designed and run by the Pharmaceutical Services Unit and the Tender Committee of the Ministry of Health.



Competition Single winner = 0




Mentioned = 1

Award criteria Price only = 0


EuropaBio evaluation Good practice 4/6

Case Study 3 Denmark 2013 National procurement

Description This tender aimed at selecting a supplier of healthcare products addressing anaemia. The tender was organised by AMGROS, the pharmaceutical procurement service for the five regional authorities in Denmark. The tender was primarily based on price, although other criteria (inherent quality, shelf-life, etc.) were also marginally considered.







N/A



EuropaBio evaluation Good practice 4/6

30

Case Study 4 Germany 2014 National procurement

Description This tender aimed at selecting a supplier for some retail anti-inflammatory products. It was organised by Retail Sick Funds. Although sometimes framed as most economically advantageous tenders, the contracts were awarded just on price (even where factors such as supply reliability were used as entering criteria).

Prescriptions are made by INN and the pharmacists provide the product provided by the tender winner, leading to potential treatment substitutions.




Access to multiple therapeutic solutions Restricted = 0

Change of therapy for treated patients Limited doctors’ discretion = 0


N/A



EuropaBio evaluation Bad practice 1/6

Case Study 5 Hungary 2014 National procurement

Description This tender aimed at selecting a supplier for TNF inhibitor treatments. It was organised by the National Sick Fund in collaboration with the Ministry of Health and the Ministry of Finance. All products could compete but the single winner determined the medicine for new patients (or treatment substitution to those who did not receive the therapy in the past 12 months). Previously used treatments would therefore be scaled back. Switch was not allowed for this tender.







Mentioned = 1




31

Case Study 6 Ireland 2013 Regional procurement

Description This tender aimed at selecting a supplier for a biological molecule called a granulocyte colony-stimulating factor (G-CSF) and in various dosage. It was organised by the hospital pharmacy, in particular by the local Pharmacy Business Manager and the Haematologist.

It was limited to G-CSF molecules at the time authorised only on the Irish market. The tender criteria were based on price, product quality, and product suitability. Furthermore, the tender was awarded to different bidders, based on splitting the business on a respective 70, 20, and 10 percent basis. There was no forced treatment substitution.







N/A



EuropaBio evaluation Best practice ≥ 5/6

Case Study 7 Italy 2014 Regional procurement

Description This tender aimed at selecting a supplier for a biological molecule called Erythropoietin (EPO). It was organised by a combination of regional payers, hospital pharmacists, and an appointed administrative director. It was split in two lots based on the status of the target population for the supplied product, i.e. on treated and off-treatment patients prior to the tender.

In this tender, treated patients were allowed to stay with previous treatment.







Mentioned = 1



EuropaBio evaluation Best practice 6/6

32

Case Study 8 Netherlands 2014 National procurement

Description This tender aimed at selecting a supplier for some respiratory medicines with inhaler device. It was set up by the healthcare insurers (HCIs) and open to multiple potential suppliers. The focus of the tender was lowering prices and led to a situation of “winner takes all”, which led to treatment substitution.

As doctors and pharmacists were strongly guided by the HCIs to prescribe the preferred medicine, chronic COPD/Asthma patients were switched to another device by doctors’ prescription or by pharmacist dispensing behaviour while co-payment increased for patients seeking alternative treatments.







Not mentioned = 0




Case Study 9 Norway 2014 National procurement

Description This tender aimed at selecting a supplier for a range of medical products. It was organised by Norway’s national tender organisation (LIS) in cooperation with regional health authorities.

It sought to reduce prices on every tendered product – except anti-inflammatory, multiple sclerosis and some cancer therapies. Although it did not recommend automatic substitution, in practice doctors are encouraged to follow the recommendations from the national authorities.




Access to multiple therapeutic solutions N/A



Not mentioned = 0




33

Case Study 10 Poland 2014 National procurement

Description This tender aimed at selecting a single supplier of biological medicines treating rheumatoid arthritis and other inflammatory diseases. The tender originated from a specific request by the Ministry of Health to the Public Procurement Office.

In general, in Poland public procurement is not centralised and each hospital sets out its own public tenders. The tender is evaluated on a price-criterion, leading to situation where a single winner takes all the market based on price. Regarding these particular biological medicines, the tenders are organised according to the Ministry of Health guidelines – hospitals have to buy the less costly version of the medicine, leading to non-medical switching of treatment.







Not mentioned = 0




Case Study 11 Portugal 2012 National procurement

Description This tender aimed at selecting a supplier for erythropoiesis-stimulating agents (ESAs). It was organised by the National Authority of Medicines and Health Products – INFARMED – and the centralised purchasing agency (SPMS). The tender grouped together the different ESAs into lots of medicines at ATC level 4 or higher. The three offers with the lowest prices were considered by the SPMS.

The tender inappropriately grouped together different biologics into the same group, thereby ignoring product differences. There was potential for treatment substitution as hospital administrations mainly aim to buy what is included in national catalogue, which can change after tenders. It focused only on the price criterion rather than on the most economically advantageous criteria.







Not mentioned = 0




34

Case Study 12 Slovenia 2012 National procurement

Description This tender aimed at selecting a supplier for erythropoietin (EPO). It was organised by the Ministry of Health based on a 2 years framework agreement and organised into lots defined by ATC5 code and INN (in this case there were no separate lots for reference biological medicines and biosimilars). For each lot, the winners were selected on the basis of price. Tender is run every 6 months (winning product could change every 6 months, increased complexity for hospital pharmacies and physicians). There is treatment substitution as the winner takes the whole market each time, leading to forced changes in therapy for patients.

This tender did not take into consideration the product differences. Furthermore, it increased complexity as hospitals needed to procure additional quantities of the specific products for their existing patients. Ultimately, it focuses only on a price criterion rather than on the most economically advantageous criteria.







Not mentioned = 0




35

Case Study 13 Spain 2013 / 2014 National & regional procurement

Description This tender aimed at selecting a supplier for flu vaccines. It was organised by the central Ministry of Health and the regional Public Health Departments. The tender was split between the national level and the regional level. The focus for both was on price. There was a first phase with a pool of suppliers and a second phase that implies a reduction in the number of local suppliers. There was no legal limitation at regional level to have one single supplier, although this is most commonly the case in reality in Spanish autonomous communities.

The tender was conducted in two phases: the national tender shortlisted a pool of suppliers; subsequently the regional tender chose a single local supplier. The criteria differed per phase: the first phase evaluated bidders on lowest price, the second (regional) phase evaluated both on lowest price and other qualitative elements.

Segmentation of the national patient population by regions (with a potentially different winner in each) might lead to non-uniformity of flu vaccines used within the country. This could cause complex scenarios and inconveniences to patients moving across regions.







Not mentioned = 0




36

Case Study 14 UK 2008 / 2009 Regional procurement

Description This tender aimed at selecting a supplier for biological medicines (with the option of a Homecare Delivery Service) in Northern Ireland. It was organised by the Pharmaceutical Clinical Evaluation and by the Head of Pharmacy for the Northern Health and Social Care Trust.

In the first phase, the tender’s evaluation was based on the most economically advantageous offer, using numerous qualitative factors both for homecare delivery service indicators and the product itself. These factors included supplier credibility and quality assurance as well as clinical efficacy, safety and dosage. After this phase, the evaluation subsequently focused on lowest price and therapeutic rationalisation.

The winning bid was officially based on qualitative evaluation but ended up using the lowest price criterion, with a view to unbundle homecare services. The tender was abandoned in 2011.



Competition N/A


Change of therapy for treated patients N/A


Mentioned = 1




Case Study 15 UK 2008 / 2009 National procurement

Description This tender aimed at selecting a supplier for erythropoiesis-stimulating agents (ESAs). It was centrally organised by the NHS England. All available ESAs were included in a single group in order to reduce medicine spending on this product class.

This tender neglected the non-interchangeability of biologic medicines. The criteria for the contract were based on two elements: most economically advantageous tender and the lowest price – as set out in the UK Public Contracts Regulations 2006. The tender included value-based criteria.







Not mentioned = 0


Transparency Low = 0


37

Country

Year

Geographical scope of the example (remove non-applicable reference) Close ended question

Local procurement / National procurement / Regional procurement

Objective of tender (i.e. supply of which biological medicine)

Indicate any motivation behind the organisation of this tender (e.g. reduction of medicine spending, restructuring of healthcare system, etc.)

Who is involved in the tender design? Who is involved in the final decision-making about the winner?

Does the tender lead to substitution of patients on treatment?

Briefly describe the specific procurement / tender selection criteriaBriefly describe the process of this tender

Explain why these criteria were appropriate / inappropriate for the procurement of biological medicines

If the criteria were inappropriate, explain how they could have been improved

Indicate whether the tendering process is complete and the potential implications/results

In your opinion, overall this example is (remove non-applicable reference) Close ended question

A good practice of public procurement of biological medicines / A bad practice of public procurement of biological medicines

Briefly explain your answer to the above

Briefly explain what the ideal tender for biologics should look like

Any other comments

7.2. Template Research Questionnaire

38

References

1 Directive 2014/24/EU on public procurement and repealing

Directive 2004/18/EC; Directive 2014/25/EU on procurement by

entities operating in the water, energy, transport and postal services

sectors and repealing Directive 2004/17/EC; Directive 2014/23/EU on

the award of concession contracts

2 In a negotiated procedure, the contracting authority consults

the economic operators of its choice and negotiates the terms of

the contract with them. In this situation the contract notice is not

published for a number of specific reasons which are described in

Article 32 (Use of the negotiated procedure without prior publication)

of Directive 2014/24/EU on public procurement.

3 Article 67.1 of Directive 2014/24/EU

4 Refer to the annex to Directive 2001/88, as amended

5 See EMA (2014), Questions and answers on biosimilar medicines

(similar biological medicinal products)

6 EC Consensus Information Paper, What you need to know about

Biosimilar Medicinal Products, April 2013. Available at: http://

ec.europa.eu/enterprise/sectors/healthcare/files/docs/biosimilars_

report_en.pdf EMA, Q&A on biosimilar medicines, EMA/837805/2011

Available at: http://www.ema.europa.eu/docs/en_GB/document_

library/Medicine_QA/2009/12/WC500020062.pdf

7 C. Leopold, C. Habl, S. Vogler & L. Favry; Tendering of

Pharmaceuticals in EU Member States and EEA countries:

Results from the country survey; 2008; ÖBIG Forschungs- und

Planungsgesellschaft mbH

8 P. Kanavos, L. Seeley & S. Vandoros;

Tender systems for outpatient pharmaceuticals in the European Union:

Evidence from the Netherlands, Germany and Belgium; 2009; LSE

Health; London School of Economics

9 Interchangeability: The medical practice of changing one medicine

for another that is expected to achieve the same clinical effect in a

given clinical setting and in any patient on the initiative, or with the

agreement of the prescriber.

Substitution: Practice of dispensing one medicine instead of another

equivalent and interchangeable medicine at the pharmacy level

without consulting the prescriber.

Switching: Decision by the treating physician to exchange one

medicine for another medicine with the same therapeutic intent in

patients who are undergoing treatment.

See: EC Consensus Information Paper, What you need to know

about Biosimilar Medicinal Products, April 2013. Available at: http://

ec.europa.eu/enterprise/sectors/healthcare/files/docs/biosimilars_

report_en.pdf

10 European Commission; Joint Procurement Agreement to

Procure Medical Countermeasures; 2014. Available at: http://

ec.europa.eu/health/preparedness_response/docs/jpa_agreement_

medicalcountermeasures_en.pdf

11 European Commission, European Glossary, definition of

Subsidiarity. Available at: http://europa.eu/legislation_summaries/

glossary/subsidiarity_en.htm

12 European Commission, European Glossary, definition of

Proportionality. Available at: http://europa.eu/legislation_summaries/

glossary/proportionality_en.htm

13 The World Bank and GAVI alliance;

The vaccine market pooled procurement; 2010. Available at: http://

www.who.int/immunization/programmes_systems/financing/

analyses/Brief_12_Pooled_Procurement.pdf

14 The Anatomical Therapeutic Chemical (ATC) Classification System

is used for the classification of active ingredients of drugs according

to the organ or system on which they act and their therapeutic,

pharmacological and chemical properties. It is controlled by the

World Health Organization Collaborating Centre for Drug Statistics

Methodology (WHOCC), and was first published in 1976. One drug

can have more than one ATC code, but on the other hand several

different brands share the same code if they have the same active

substance and indications.

8.

EuropaBio is the European Association

of BioIndustries. EuropaBio’s mission is

to promote an innovative and dynamic

biotechnology base in Europe.

Members are involved in research,

development, testing, manufacturing

and commercialisation of biotechnology

products and processes.

Our membership is composed

of corporate, associate members

and bio-regions, as well as 16 national

biotechnology associations,

who in turn represent more than 1800

small and medium sized biotech

companies in Europe. EuropaBio’s

Healthcare Council represents both

large biopharmaceutical companies and

biotech SMEs developing medicines,

vaccines and diagnostic tools

using biotechnology in their development

or manufacturing processes.

About EuropaBio

www.europabio.org | @EuropaBio

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