A new law has been introduced that makes minor modifications to the early benefit AMNOG process. For the past two years a number of discussions, known as Pharmadialog, have taken place between the government and industry stakeholders. The outcome of these discussions has been the introduction of a new German Act – Strengthening Pharmaceutical Supply in the Statutory Health Insurance (AMVSG), which has also been nicknamed AMNOG 2.0. The AMVSG was adopted by the German Bundestag in May 2017.
Within the act there are some ‘wins’ for the pharmaceutical industry but, as always, there were also some ‘losses’.
The wins
Maintenance of additional benefit for Orphan drugs:
The rules on the process for early benefit assessment of orphan medicines (with outpatient sales of less than €50 million) remain untouched. These products will continue to be considered as having an additional benefit in the AMNOG process. There was a concern that the AMVSG would have required a full AMNOG submission. However, it appears the government recognised that as a result of this rule almost all orphan medicines have been launched in Germany which facilitated patient access to innovative medicines.
Free pricing during first year of launch:
The principle of free pricing in the first year after launch is kept. Originally, it was proposed that if a revenue threshold of €250 million was exceeded in the first twelve months, the price negotiated between the manufacturer and the GKV-Spitzenverband would apply retrospectively after the month the threshold was exceeded. Analysis of the number of drugs exceeding €250 million sales in the first 12 months revealed that this amendment would have resulted in limited savings (only three drugs exceeded the limit in 2015) and was therefore abandoned.
Pricing in multiple indications / subpopulations:
The new law also deals with the fact that GBA often grants different levels of additional benefit for different patient populations. It intends to allow more flexibility in this respect: The manufacturer will be able to apply for an exclusion of reimbursement for certain subpopulations and can also differentiate between patient populations in the price negotiations by proposing price / volume agreement per indication / subpopulation. It will be interesting to monitor this amendment to see how such managed entry agreements can be implemented in practice. The first example of such an agreement has been for the PCSK9 inhibitors (Repatha and Praluent) which was negotiated prior to this change. The PCSK9 inhibitors had their reimbursement restricted to patients with heterozygous familial hypercholesterolaemia and patients who cannot tolerate statins, rather than the full label population.
The losses
No confidentiality of the reimbursed price negotiated between companies and GKV-SV:
It was initially proposed to make the negotiated reimbursed price confidential, however, this was removed in the final version of the act. The main reason was that “public bodies require this information to fulfil their legal obligations”. Therefore, the negotiated price is available to many stakeholders and hence cannot be considered “confidential”. The deletion of the “confidentiality” is a setback for industry and it is clear that the German authorities do not consider the negative effects international reference pricing can have on patient access to new products.
Evaluation of new indications for APIs launched prior to 2011:
Previously, new indications of APIs launched prior to 2011 did not require an AMNOG assessment. The new act now states that if new regulatory data protection exists for the new indication, an early benefit assessment dossier needs to be submitted to GBA. However, it is not clear what implications this will have on the price of the old indications or whether it is only the new indication that will be subject to the GBA assessment (this is likely but currently unclear). This amendment will have significant implications for companies who have follow-on indications in the pipeline.
Price moratorium extended until the end of 2022:
The new law will also extend the price moratorium until the end of 2022. This means that the prices for pharmaceuticals will be kept at 2009 levels. The act does, however, provide for a compensation for inflation, but this does not address the losses incurred since the introduction of the price freeze in 2010.
New information system for physicians:
An electronic system will be introduced to inform physicians about the outcome of the AMNOG process. It is not clear yet how this system will be implemented. It is envisaged that such an information system could educate the physician about the level of GBA perceived product innovation (today, few physicians are aware of AMNOG decisions), highlighting the cheapest products available (e.g. if there is a generic or biosimilar available) and highlighting which indications are reimbursed (e.g. as for the PCSK9 inhibitors).
It appears that AMNOG 2.0 is an evolution, rather than a revolution, of the AMNOG process. It is disappointing that the negotiated discounts will not be considered confidential and that existing APIs will have to undergo an AMNOG assessment for new indications. It is encouraging to see that the GBA may be open for different pricing/price volume agreements for different indications, which opens the door to managed entry agreements and alternative ways for securing patient access of innovative medicines in Germany.