IHS Global Insight Perspective | |
Significance | The sixth wave of rebate contracts comprises a total of 560 contracts for 80 active ingredients and will run from 1 June 2011 until the end of May 2013. |
Implications | The blockage of the bidding process by the Higher Regional Court (OLG) of Dusseldorf has seriously delayed the final designation of bidding winners for a majority of contracts, leading to a risk of short-term shortages in German pharmacies. The Allgemeine Ortskrankenkasse and the German Pharmacy Association have therefore come to an agreement to allow the dispensing of comparable generic products in case of shortage of the generics under contract. |
Outlook | The dispensing of generics is in any case becoming more flexible in Germany. Patients now have the possibility to ask for a non-discounted generic in exchange for a co-payment. |
AOK's Sixth Wave of Discounted Contracts
Germany's largest public health insurance fund, the Allgemeine Ortskrankenkasse (AOK), will launch its sixth wave of rebate contracts on 1 June 2011, after the Higher Regional Court (OLG) of Dusseldorf ruled in favour of AOK in a case opposing the sick fund against pharmaceutical companies. More than half of the tenders were blocked by the complaint filed by several pharmaceutical companies and linked to the new packaging rules implemented as part of the new reform in Germany (see Germany: 4 February 2011: Sixth Wave of AOK Generic Rebate Contracts Blocked in Germany). This delayed the signing of contracts for 55 active ingredients out of the 80 advertised drugs. The new rebate scheme will run until the end of May 2013. A total of 560 contracts for 80 active ingredients in seven regions have been signed. This sixth wave of contracts includes high-revenue drugs such as omeprazole and simvastatin as well as bisoprolol, enalapril, lisinopril, metformin, metoprolol and ramipril. For a total of 20 active ingredients, winning bidders remain unchanged compared with last contracts, meaning that it will incur no change for pharmacists and patients. The new rebate contract scheme is expected to unlock savings of around EUR720 million for the AOK in 2011.
Peace Obligation Agreed Until End of July
Aware of the potential short-term shortages that may occur for individual drugs following the late signing of contracts for more than half of the tenders, the Allgemeine Ortskrankenkasse (AOK) and the German Pharmacy Association (DAV) have signed a two-month peace obligation. Under the collective agreement, the AOK commits not to impose financial sanctions on pharmacists facing difficulties in terms of drug supply. The agreement allows pharmacists to dispense a non-discounted comparable medicine until 31 July 2011 if the AOK discounted product is not available.
Outlook and Implications
The late green light of the Higher Regional Court (OLG) of Dusseldorf on 9 May 2011 came as a relief for the AOK which is planning to save around EUR4.4 billion over the two-year contract period. The blockage was due to the new regulation for packaging size implemented on 1 January 2011 in Germany, and was basically linked to the fact that manufacturers had to provide pharmaceutical prices for new packaging sizes which did not exist yet. The ruling in favour of AOK will allow an on-time launch of this sixth scheme whereby only one manufacturer will be allowed to dispense the discounted generic.
It is worth reminding here that the discounted rebate concept has been slightly amended in Germany with the entry into force of the Act for the Restructuring of the Pharmaceutical Market (AMNOG) in January 2011. Patients are now allowed to choose a non-discounted generic as long as they agree to pay a co-payment equivalent to the difference between the discounted price and the retail price of the generic of their choice.