The Federal Association of the AOK has concluded discount contracts with three producers of TNF-alpha inhibitors after the first discount contract to be conducted across a whole drug class.
IHS Life Sciences perspective | |
Significance | Following the first discount-contract tender procedure to be extended across an entire class of drugs, discount contracts have been signed with three producers of TNF-alpha inhibitors for seven AOK funds. |
Implications | This is the first example of such a cross-class tender. Although doctors and pharmacists cannot be penalised for not prescribing or dispensing the discount-contracted product, since they are biologic medicines, the fact that TNF-alpha inhibitors without discount contracts will require additional co-payments will mean that patients are likely to favour those with discount contracts (which will require no co-payments). |
Outlook | There is every chance that, as in the case of the growing number of innovative medicines being subject to discount contracts, more discount contracts across whole drug classes will be introduced in future. This will, inevitably, be unfavourable for most innovative drug makers. |
The Federal Association of the AOK, the central organisation bringing together one of Germany's largest groups of statutory health insurance (GKV) funds, has announced the completion of the first ever tender for discount contracts for the supply of medicines that applies across an entire class of drugs: tumour necrosis factor-alpha (TNF-alpha) inhibitors, used in the treatment of rheumatoid arthritis as well as a number of other immune-mediated diseases.
The tender was announced in October 2014, with the Federal Association of the AOK calling the tender on behalf of seven regional AOK funds – Bayern, Nordost, Nordwest, Rheinland-Pfalz/Saarland, Sachsen-Anhalt, Hessen, and Rheinland/Hamburg – reports Deutsche Apotheker Zeitung. The tender broke new ground in the history of discount contracts because rather than being based on the active ingredient, it went across the whole TNF-alpha inhibitor drug class. The tender was divided into seven area lots, and suppliers could offer one of the following TNF-alpha inhibitors (by international non-proprietary name):
- Adalimumab (Humira; AbbVie, US)
- Certolizumab pegol (Cimzia; UCB Pharma, Belgium)
- Etanercept (Enbrel; Pfizer, US)
- Infliximab (Remicade; Merck & Co, US – also available from various producers in biosimilar form)
- Golimumab (Simponi; Merck & Co)
According to Deutsche Apotheker Zeitung, the new type of tender resulted in predictable delays, with a review procedure taking place and amendments being made, and the tender being recalled. For this reason, it is only now that the results of the tender are being announced. The drugs with the winning bids are the Hospira (US) biosimilar Inflectra (infliximab), UCB Pharma's Cimzia, and Simponi, which is to be supplied by Merck Sharp & Dohme (as Merck & Co is known outside the US and Canada). As the source reports, the contracts will run from 1 November this year until 31 October 2016, with the option of extension.
The Federal Association of the AOK stated in a press release that these medicines will be available to patients covered by the participating funds without additional co-payments. Furthermore, it said that individual doctors will decide on which drug is prescribed to each patient. Deutsche Apotheker Zeitung points out that pharmacists will not have any significant role in these discount contracts, because biologic medicines such as monoclonal antibodies cannot be substituted at the pharmacy level, despite the presence of a biosimilar among the three for which contracts have been awarded. The source emphasises that the funds involved in the contracts do not have the right to impose sanctions on doctors or pharmacists if they are not prescribing the discount-contracted medicines, but patients will have an interest in this, because they will have to pay a co-payment if they are prescribed TNF-alpha inhibitors other than those with discount contracts.
The Federal Association of the AOK informed in its press release that the cost of the three winning TNF-alpha inhibitors for the seven AOK funds concerned amounted to EUR320 million (USD360.5 million) in 2014.
Outlook and implications
As well as rheumatoid and other types of arthritis and ankylosing spondylitis, TNF-alpha inhibitors are commonly used in the treatment of Crohn's disease and ulcerative colitis. Therefore, these are a very important drug class, both therapeutically and economically.
Innovative medicines, including those that are still patent protected, are increasingly becoming part of Germany's discount-contract system. This tender combines this trend away from generics-only discount contracts with a brand new one: whole-class tenders.
The fact that the AOK funds cannot sanction doctors for not prescribing a discount-contracted TNF-alpha inhibitor is at least one piece of positive news for the companies whose drugs did not win in the recent tender. However, the fact that these will be subject to co-payments will mean that there is likely to be pressure to prescribe the discount-contracted products.
The winning producers are likely to have reduced their prices in Germany in order to win in the tender. This is likely to drive a general lowering of prices across the entire TNF-alpha inhibitor drug class, as other producers seek to win future tenders.
Finally, the first example of a whole-class tender is likely to be followed by others, if it proves to run smoothly. This would be a blow to innovative pharmaceutical producers, which would be likely to see the prices of their patent-protected medicines decline more quickly as they reach the final years of their patent life than is the case at present.