Spending on reimbursement by Germany's statutory health insurance funds increased by 2% year on year in the first quarter to EUR9 billion, according to data from IMS Health.
Implications | The more moderate growth dynamic in drug reimbursement spending by Germany's statutory funds is partly explained by the discounts negotiated on the reimbursement prices of new HCV drugs, particularly Sovaldi; savings from such discounts under the AMNOG system are reported to have gone up 79% year on year in the quarter. |
Outlook | As well as reflecting the high initial price of Sovaldi and other HCV drugs and the large savings achieved through negotiated discounts, the reported significant rise in savings from AMNOG discount negotiations may also point to a new, more strict approach to ensuring savings by the funds. |
Drug reimbursement spending by GKV funds up 2% y/y in Q1
Spending on drug reimbursement by Germany's statutory health insurance (GKV) funds increased by 2% year on year (y/y) to EUR9 billion (USD10.2 billion) in the first quarter of 2016, according to data from IMS Health, quoted by Deutsche Apotheker Zeitung. The source reports that the figures include diagnostic products available from pharmacies, such as diabetes test strips, but do not include vaccines. Additionally, the calculations are made on the basis of the pharmacy retail price, minus mandatory discounts payable by manufacturers and pharmacists, and minus reported discounts from negotiated reimbursement prices (Erstattungsbeträge); savings from discount contracts were not considered.
Volume slightly down, reimbursement of on-patents up 6.2% y/y
Reportedly, based on IMS Health data, the number of packages dispensed that were covered by the GKV funds in the first quarter dropped slightly, by 1% y/y to 180 million packages. The value of the reimbursement paid out by GKV funds for on-patent medicines in the first quarter increased by 6.2% y/y, although this was substantially lower than the 16.1% y/y seen last year.
Spending on HCV drugs falls 37% y/y, savings from reimbursement-price discounts up 79% y/y
One of the reasons that the source gives for the moderate increase in reimbursement spending is the 37% y/y reduction on spending on hepatitis C virus (HVC) medicines during the first quarter, to EUR259 million. Additionally, it is reported that on the basis of the IMS Health data, savings due to negotiated discounts on reimbursement prices under the system introduced by the Pharmaceutical Market Restructuring Act (AMNOG) in 2011 went up in the first quarter by 79% y/y to EUR257 million.
Strong regional divergences identified
Deutsche Apotheker Zeitung gives as its source for the IMS Health figures Germany's National Association of Statutory Health Insurance Physicians (KBV), and it provides details on the growth dynamic for pharmaceutical reimbursement spending in various regions that are covered by different branches of the KBV. Interestingly, it is shown that there is quite a strong divergence between the growth dynamic seen in different regions; reportedly, in Berlin and Sachsen-Anhalt, growth was under 2% y/y, while in Hessen, Nordrhein Westphalen, and Schleswig-Holstein, it was up by around 5% y/y. The KBV region with the largest spending growth was, reportedly, Bremen, where it went up by 8% y/y. Although the source states that to identify the exact reasons for such strong divergences is difficult, it is suggested that among the reasons are the various initiatives implemented by the regional associations of doctors and other professional groups – the example is given of the "Armin" initiative in Sachsen-Thüringen, introduced in 2014 and intended to improve the quality and the economic efficiency of prescribing in the public healthcare system, particularly in the case of patients taking a multitude of different medicines.
Outlook and implications
According to the German Federal Ministry of Health (MoH), spending on drug reimbursement by the GKV funds in 2015 increased by 4.7% y/y to EUR37.024 billion, following an increase of 10.1% y/y in 2014 – although this was mainly due to a one-off regulatory change; without this, spending in 2014 and 2015 rose at a similar rate (see Germany: 11 March 2016: German MoH confirms 4.7% y/y drug reimbursement increase in 2015, report shows rising new innovative drug prices). One of the main factors in the fairly high growth rate of pharmaceutical reimbursement spending in the past couple of years has been increased spending on HCV medicines, and the agreement of a discount on the reimbursement price of one of the largest-selling new HCV drugs, Sovaldi (sofosbuvir; Gilead Sciences, US) in February last year is certain to have had an impact on the reduction in drug reimbursement spending (see Germany: 13 February 2015: Gilead, GKV funds agree on 30% cut to Sovaldi price for three years in Germany).
As can be seen by the higher growth dynamic for the reimbursement spending in the case of on-patent medicines than the overall figure, it is still on-patent medicines that are driving the growth of the German pharmaceutical market, albeit at a much lower rate. The reported considerable increase in the savings made from discounts on negotiated reimbursement prices for innovative drugs under the AMNOG system in the first quarter is likely to be related to a significant extent by discounts negotiated on new HCV drugs. However, it may also indicate a new, more strict application of economic principles in the negotiations that could be resulting in lower prices for the GKV funds.