IHS Global Insight Perspective | |
Significance | ZESAR took its function on 1 January 2011 as German private health insurers gained the right to impose a 16% mandatory rebate on non-reference priced drugs under the AMNOG law. |
Implications | Rebates will be directly claimed to the relevant pharmaceutical companies by the central office, which is responsible for returning the money to private insurance companies. |
Outlook | It remains to be seen how private health insurers will pass the savings achieved on to patients, as the private health insurance association did not issue any recommendations to its members. |
Expensive drugs funded by private health insurers are since 1 January 2011 subject to a mandatory rebate of 16%, as is the case for all non-reference-priced medicines reimbursed by the statutory health insurance (GKV) scheme. The payment of a mandatory drug rebate to the 43 members of the private health insurance (PKV) association will be organised by a central office called ZESAR (Zentrale Stelle zur Abrechnung von Arzneimittelrabatte, central office for settlement of drug rebates) which will directly claim rebates to the relevant pharmaceutical companies to then return the money to individual private insurance companies (source: Apotheke Adhoc).
Members of the PKV are however not allowed to make profits out of those mandatory rebates, implemented as part of the new Act for the Restructuring of the Pharmaceutical Market in Statutory Health Insurance (Entwurf des Gesetzes zur Neuordnung des Arzneimittelmarktes, AMNOG). The introduction of a mandatory rebate within the private sector is on the contrary designed to reduce the burden for policyholders on whom savings achieved must be passed on. The use of those extra funds remains unclear however as "the PKV has issued no recommendation to its members so that each individual company can think of a sensible way to implement the rebates" according to a PKV spokesman quoted by Apotheke Adhoc.
Policyholders will as usual only need to send the prescription to their own insurance fund. Data will be electronically transmitted to ZESAR which will claim the rebate to the relevant pharma companies.
Outlook and Implications
The package of healthcare services offered by the statutory insurance system along with the risk-equalisation fund and contract system have clearly disadvantaged private insurers so far. But differences tend to diminish as pharmaceutical companies are now obliged to pay a 16% discount on medicines that are not part of the reference pricing system to private insurers as well. The PKV adds here another string to its bow since its members are already used to imposing GKV-style forced rebates on generics. Extra incentives implemented in 2009 and measures designed to reduce the gap in terms of healthcare packages will further encourage people to switch from public to private health insurance. This will however only occur if members of the PKV pass savings achieved on policyholders, as required by the coalition government. If private insurance funds find a way to improve their profits by this means, it could well discourage people to opt for a private insurance package, especially as those switching from public to private lose their right to subscribe to the GKV in future. According to the German Association of Private Medical Insurers, over 8.8 million people have opted for a comprehensive private coverage, which represents less than 10% of the entire population.
The implementation of ZESAR and the 16% mandatory rebate on expensive medicines funded by private funds is very bad news for the pharmaceutical industry which is definitively surrounded on all sides when it comes to reducing the cost burden of the most expensive and innovative drugs.