Bausch + Lomb's Yellox is the second medicine to have gone through early benefit assessment under Germany's new pricing process.
IHS Global Insight Perspective | |
Significance | Results of the early benefit assessment of Yellox show that the eye drug brings no additional proven benefit in the treatment of postoperative ocular inflammation following cataract extraction. In parallel, statutory health insurance fund the AOK has reportedly inked rebate contracts for 90 active ingredients. |
Implications | The Federal Joint Committee (G-BA) is expected to issue an opinion related to Yellox by mid-January 2012. Based on the early benefit assessment, the G-BA must determine whether Yellox will qualify for price negotiations with the statutory health insurance or not. |
Outlook | The seventh round of rebate contracts launched by the AOK will cover the period between April 2012 and March 2014. During 2012, the AOK expects to unlock savings worth over EUR600 million via rebate contracts on generics. |
Yellox Fails to Meet G-BA's Criteria
Germany's Federal Joint Committee (G-BA) on 4 November published the results of the early benefit assessment of US firm Bausch + Lomb's eye drug Yellox (bromfenac). Compared with the appropriate comparator dexamethasone eye drop, Yellox was found to bring no additional proven benefit in the treatment of postoperative ocular inflammation following cataract extraction. Results of the early benefit assessment of Yellox are available here and will inform the price setting going forward. Based on those results, the G-BA must decide by mid-January 2012 whether the drug qualifies for price negotiations with the statutory health insurance funds or not. In light of the innovation rating of 5 granted to the medicine, Yellox is set to be included in the country's reference-pricing system and priced against dexamethasone.
The probable inclusion of Yellox into the reference-pricing system may render the drug subject to tenders organised by certain GKV funds to select suppliers of the cheapest reference-priced medicines. Rebate contracts on reference-priced medicines are extremely common in Germany. GKV fund the AOK is preparing to launch its seventh round of contracts in April 2012.
AOK to Launch Seventh Round of Contracts
On 22 November, the AOK announced that it had inked rebate contracts for 90 active ingredients out of the 93 advertised as part of its seventh wave of tenders. Bidders selected by the major GKV fund include a total of 34 suppliers. Players selected by the AOK include Teva (Israel), Stada (Germany), Actavis (Iceland), Sanofi (France), Pfizer (US), 1 A Pharma (Germany), Abbott (US), Gedeon Richter (Hungary), Grünenthal (Germany), Hexal (Germany), Mylan (US) and Novartis (Switzerland). The full list is available here.
Active ingredients subject to discounted agreements under the seventh round of contracts are worth approximately EUR2 billion (USD 2.67 billion) in sales. Among the top-selling drugs included in the seventh wave of contracts are the gastric-acid inhibitor pantoprazole and the osteoporosis drug alendronate. Pantoprazole will be supplied by Icelandic generics maker Actavis in the eight allotted geographic areas, while Teva will be the sole supplier for alendronate. The contracts will run for two years, starting on 1 April 2012.
Outlook and Implications
Together with the fifth and sixth round of contracts, these new discounted price agreements will allow savings of about EUR650 million during 2012. Among the active ingredients selected are drugs for which a rebate contract comes to an end in early 2012 with the expiration of the fourth round of contracts, as well as new off-patent drugs. This is the largest ever tender launched by the AOK. The GKV fund expects to unlock savings of about EUR700 million via generic rebates during 2011. In 2010, the AOK saved over EUR600 million on rebate contracts. Approximately 86% of that amount was savings triggered by contracts on off-patent medicines. The third round of contracts launched by the AOK expired in May. Three rounds of contracts (the fourth, fifth and sixth) are currently running with a total of 172 medicines subject to discounted agreements. Overall, approximately two-thirds of the AOK generics market is subject to discounts.
Although rebates on off-patent generics will continue to hurt the German generics market, patented medicines that are comparable to alternatives are set to be increasingly targeted by those discounted agreements. This will be an additional challenge for manufacturers of new medicines that are placed in the reference-pricing system upon early benefit assessment.