Melody Watson, Dr. Marc Esser

Market Access in Germany

For pharma companies abroad it can be quite challenging to understand which rules market access follows in different countries. In this article we cover what the situation in Germany is, including the AMNOG process and what your company needs to do in order to ensure an optimal chance of success.

Three tablets in the colors of the German flag

Up until 2011, Germany was one of the only Western countries in which pharmaceutical companies were free to charge as much for their drugs as they wanted. Consequently, drug prices were up to 26 percent higher than the average prices across the EU. Confronted with costs that were spiraling out of control and the prospect of an 11 billion euro deficit, the government took matters into their own hands in the form of a new law called AMNOG (Arzneimittelmarkt-Neuordnungsgesetz) which was passed on the 11th November 2010.1 AMNOG required companies to demonstrate that their drug provided additional benefits over existing drugs. So far it seems to be an effective strategy – AMNOG has succeeded in reducing the government’s pharmaceutical bill, while the reimbursement price of a range of new drugs has now fallen below the EU average.

How AMNOG works

AMNOG was one of three reforms brought in by the German government to rein in the looming deficit of the statutory health insurance (SHI), with two of these reforms directly aimed at pharmaceutical costs. For immediate impact, the government imposed a price freeze on all drugs in the market and also increased the mandatory rebate companies had to grant SHI funds for the purchase of their drugs from 6 percent up to 16 percent of the list price. For a more long-term impact on drug prices, AMNOG was implemented.

Under AMNOG, pharmaceutical companies can still set the initial list price when they launch a new drug; however, at the same time, they also have to submit a cost-benefit dossier to G-BA (Gemeinsamer Bundesausschuss), the self-governing body that makes reimbursement decisions. The G-BA then assesses the drug’s benefits over established standard-of-care treatments, with input from additional stakeholders such as the Institute for Quality and Efficiency in Healthcare (IQWiG) that considers patient-related benefits. The standard-of-care therapies must also have marketing authorization in Germany and be reimbursed by statutory health insurance funds.

The G-BA has up to six months to perform the evaluation and at the end of the assessment, the drug is designated a rating level, with Level 1 denoting »extensive benefit« over the chosen comparator and Level 6 denoting less benefit than the chosen comparator. Based on the rating given, the company then enters into negotiations with the National Association of Statutory Health Insurances, which represents all SHI funds, in order to set the reimbursement price. At one year post-market launch, this reimbursement price will replace the initial list price of the drug.2

Key lessons learnt since implementation of AMNOG in 2011

Use patient-relevant endpoints

AMNOG requires that patient-relevant endpoints, such as morbidity, mortality, and quality of life, be taken into account when comparing the company’s drug with the chosen comparator, as opposed to surrogate endpoints. However, determining what is relevant for patients can differ depending on the indication, and there can be differences as to what the IQWiG, G-BA and pharmaceutical companies think are patient-relevant endpoints. For example, progression-free survival is considered to be a patient-relevant endpoint in oncology whereas the G-BA often does not take progression-free survival into account.

Make sure your data analysis is of a high quality

This might seem obvious but between 2011 and 2015 more than half of the products that received a Level 5 rating did so due to invalid data. This can be due to such errors as failing to administer the drug or its comparator in accordance with German marketing authorization specifications or not using a validated questionnaire for the specific indication.

Be aware that some IQWiG or G-BA requirements are not necessarily aligned with international clinical trial guidelines. For example, the IQWiG tends to evaluate a drug’s efficacy within many patient subpopulations and this may leave the company with insufficient data to draw statistically significant conclusions.

Choice of comparator by the G-BA is extremely important

The G-BA recommends which comparator to use and products which are assessed against a different comparator of the company’s choosing are almost always given a Level 5 rating (no proof of benefit). As the price of new drug cannot exceed that of the cheapest comparator, this will have a great effect on the reimbursement price and potential profit margins, especially if the comparator is generic.2

The IQWiG’s recommendations are not always followed by the G-BA

In 2013, the G-BA’s final rating differed from that recommended by the IQWiG in 57 percent of cases, due to the different organizations interpreting the data in different ways. In general, the IQWiG is more focused on the methodology and science and the G-BA is more concerned with the broader picture. For example, Pfizer’s drug Xalkori (crizotinib) did not show improved overall survival in phase III trials and this led the IQWiG to give it a level 5 rating. Upon resubmission of more data, improvements in symptoms and quality of life were shown and this led the G-BA to give Xalkori a level 2 rating.3

The company can debate decisions during the process and if new data is presented, the G-BA can ask the IQWiG to review its recommendation.

Reimbursement price depends on several factors

Although the drug might receive different benefit ratings for different patient subpopulations and these will be taken into account, in the end only a single price will be allocated to the drug. The reimbursement price also depends on other drugs on the European market, including the price of the comparator treatment. Interestingly, a review of decisions between 2011 and 2015 found that there was no direct correlation between the benefit rating given to the drug and the extent to which the original price is reduced.2

Looking to the future

Although AMNOG has been controversial, it is not about to go away any time soon. Even though the benefit assessment and rating system is working smoothly these days, the price negotiation process is more unpredictable, especially since prices do not appear to be linked to the allocated ratings. This is now a major factor in the increased uncertainty surrounding product launches in Germany. However, this is something that pharmaceutical companies will simply need to get used to, and with enough planning, success within the German market is most definitely possible.2