Germany is the top pharmaceutical market in Europe and one of the largest in the world, but a reformed reimbursement system for drugs makes it one of the most challenging for reimbursed pricing and market access. It is more important than ever for a pharma company to prove a new product’s additional benefit over existing treatments, to obtain a maximum reimbursed price.
But what exactly does “additional benefit” mean? While the new system became effective in 2011, companies have received little guidance on what constitutes additional benefit, and most are learning as they go. Companies who want the best price for their drug must provide strong clinical and economic evidence and bring their best negotiators to the table. The best approach may be to hold off on a launch in Germany in favour of countries with better pricing conditions.
Germany’s Payer Stakeholders
The Act on the Reform of the Market for Medicinal Products (AMNOG) in early 2011 introduced a mandatory benefit assessment process, which has radically changed the market access environment for products with a new active ingredient in Germany.
Once a new drug is approved in Germany, the pharmaceutical company can set its list price and market it, but only for a limited period of time. The Federal Joint Committee or Gemeinsamer Bundesausschuss (G-BA) identifies an appropriate comparator to evaluate the additional benefit offered by the new product.
G-BA’s Comparator Considerations
- The existing clinically appropriate standard of care in the indication
- With more than one product, G-BA selects the lowest-price comparator
- If no drug alternative, comparator can be a non-drug treatment
G-BA’s decision is guided, in part, by the Institute for Quality and Efficiency in Healthcare (IQWiG), which assesses the additional benefit of the drug.
Levels of Additional Therapeutic Benefit
- Major added benefit over comparative therapy
- Significant additional benefit
- Marginal additional benefit
- Unquantifiable additional benefit
- No additional benefit proven (a negative category)
- Less than comparator (a negative category)
If the new drug shows additional benefit, the National Association of Statutory Health Insurance Funds, or GKV-Spitzenverband (GKV-SV), negotiates with the pharmaceutical company for a reimbursed price.
Important Points to Keep in Mind
As long as the IQWiG assessments acknowledge some level of additional benefit, the pharma company should be able to keep its initial launch price but offer health insurers some sort of discount. The agreed-upon price is then honoured by Germany’s statutory public insurance program.
Not surprisingly, pharma companies can find themselves at odds with the G-BA on the existing therapy to which their new drug must be compared. Manufacturers must demonstrate head-to-head evidence on endpoints strongly preferred by IQWiG and G-BA for a positive assessment. The G-BA’s choice of comparator cannot be challenged.
New drugs to treat rare diseases catch a little bit of a break in the German market with a simplified submission process. So long as the new orphan drug costs the statutory health insurance fund less than €50 million annually, it does not need to prove additional benefit to set a price. The additional benefit in general is considered demonstrated by the orphan designation.
This exception applies to orphan drugs as long as anticipated peak sales stay below the threshold of €50 million a year. If the threshold is exceeded after the G-BA decision, a complete dossier has to be submitted by the manufacturer.
Implications for Industry
The right comparator is the single most important factor in AMNOG benefit assessments. “Additional benefit” can go right out the window if the the G-BA disagrees with the compatator you’ve selected for your new drug.
In addition to early alignment with the G-BA on choice of comparator, pharmaceutical companies should consult with the committee on documents and studies to be submitted, methodology to demonstrate additional benefit, clinical trials endpoints and ideal patient sub-population(s), among other considerations.
The best case scenario for a new drug is to obtain an international reference price through price negotiations with the lead association of the German Sick Funds . To that end, most companies may hold off on a launch in Germany, moving first in countries with more favourable pricing conditions.
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