Germany's GKV pharma market (the market for reimbursed medicines in the ambulatory sector) increased in value by 4.1% year on year in the first half to EUR18.3 billion.
Implications | The main contributors to the growth in value were innovative medicines, while patent-protected medicines grew more dynamically than generics in terms of volume. At the same time, there was a substantial increase in savings for GKV funds due to discounts provided by producers of innovative drugs completing AMNOG assessment procedures. |
Outlook | Older patent-protected medicines launched before AMNOG continue to contribute to dynamic GKV drug-spending growth, but the number of these drugs will decline steadily in the coming years, as the number of drugs assessed under the AMNOG system, and consequently subject to discounts on their reimbursement price, will continue to increase. |
GKV market expands 4.1% y/y in H1, innovative drugs make largest contribution to increase
In the first half of 2016, expenditure on medicines within Germany's statutory health insurance (GKV) market – including spending by GKV funds and co-payments by patients – rose by 4.1% year on year (y/y) to EUR18.3 billion (USD20.4 billion), based on end-user prices in pharmacies, according to data published by IMS Health. Savings from discounted reimbursement prices (Erstattungsbetrag) and additional discounts associated with the freeze on the prices of reimbursed drugs are deducted from the overall figure, while savings from patient co-payments and discount contracts with GKV funds are retained.
According to IMS Health, the increase was due mainly to greater levels of spending on a number of groups of innovative drugs, including the anticoagulant group of direct factor Xa inhibitors, TNF-alpha inhibitors used in the treatment of rheumatic diseases and certain gastrointestinal conditions, as well as new oncology drugs. It is emphasised that new innovative medicines used in the treatment of hepatitis C no longer played any role in the increase in expenditure in the GKV market, with spending in this therapeutic area experiencing a double-digit reduction.
Savings for GKV funds rise, as more medicines undergo AMNOG assessments
IMS Health estimates that savings made by GKV funds on drug reimbursement expenditure from producer discounts on medicines that have been subject to price negotiations, in addition to the price freeze and other discounts, amounted in the first half of 2016 to EUR1.368 billion, an increase of 19.0% y/y. According to IMS Health, the majority of this increase is accounted for by the increase in the number of medicines that have gone through the early benefit assessment process as part of the Pharmaceutical Market Restructuring Act (AMNOG).
Volume of patent-protected medicines grows faster than generics
In volume terms, there was an increase of 2% y/y in the number of packages in the GKV market in the first half, according to IMS Health, with a rise of 8% y/y in the volume of patent-protected medicines and 3% y/y in the volume of generics. The largest increase was seen in the volume of larger packages (N3 package size) of medicines, which grew in volume terms overall by 4% y/y (compared with a 2% y/y reduction for medium size and 1% y/y for small size).
Continued increase in patent-protected medicines subject to discount contracts
The proportion of medicines subject to discount contracts with individual GKV funds increased during the first half in the case of generics and patent-protected drugs. Overall, the proportion rose from 53% in the first half of 2015 to 56% in the first half of 2016. For generics, the proportion increased from 72% in the first half of 2015 to 74% in the first half of 2016. The proportion increased more dynamically among patent-protected medicines, from 24% in the first half of 2015 to 28% in the first half of 2016.
Outlook and implications
Direct factor Xa and TNF-alpha inhibitors were mostly marketed before the implementation of AMNOG in 2011, and consequently are not subject to discounts resulting from price negotiations between the GKV funds and producers. In the GKV market in recent years, there has been highly dynamic spending growth on direct factor Xa inhibitors, which include two major drugs produced by German pharma majors –Boehringer Ingelheim's Pradaxa (dabigatran etexilate) Bayer's Xarelto (rivaroxaban) –and they have been the focus of much attention in Germany from those keen to see pre-AMNOG drugs undergo AMNOG assessments. The decline in spending on new hepatitis C drugs, such as Sovaldi (sofosbuvir; Gilead, US), reflects the fact that they are subject to discounts on their reimbursement prices, having been launched after AMNOG, and also indicates the very high comparison values in previous years.
The number of medicines that have undergone early benefit assessment procedures since the implementation of the AMNOG law in 2011 has grown, while the number of patent-protected medicines in the market launched before AMNOG continues to decline, as patents expire. However, as indicated above, certain groups of medicines launched before AMNOG, such as direct factor Xa inhibitors (which continue to be subject to patent protection), continue to contribute to substantial increases in reimbursement spending.