Germany

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 complex for reimbursed pricing and market access. In 2011, the Act on the Reform of the Market for Medicinal Products (AMNOG) was instituted requiring all companies with a new active drug or application to provide strong clinical and economic evidence if they want the best price for their drug. It is now 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.

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. 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

    1. Major added benefit over comparative therapy
    2. Significant additional benefit
    3. Marginal additional benefit
    4. Unquantifiable additional benefit
    5. No additional benefit proven (a negative category)
    6. 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. This negotiation process is highly structured with pharmaceutical companies only having the right to four confidential sessions with the limited potential of a fifth session. If the negotiation process is unsuccessful during the offered sessions, the price is decided by an independent arbitration board and no further negotiation is allowed. Since the first establishment of the price negotiation and benefit assessment structure in 2011, 230 drugs have gone through the negotiation process and only 35 have had their final price decided by arbitration rather than negotiation as of 2019.

Important Points to Keep in Mind

If 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 honored 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.

Orphan Drugs

New drugs to treat rare diseases catch a break in the German market with a simplified submission process. If 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 if 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 must 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 G-BA disagrees with the comparator 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 favorable pricing conditions.

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