The chairman of Germany's Federal Joint Committee, the G-BA, has defended its record on backing innovative drugs in the context of the AMNOG law completing its second year, while the Vertex Pharmaceuticals cystic fibrosis drug Kalydeco (ivacaftor) has been given a mixed verdict.
IHS Global Insight perspective | |
Significance | G-BA chairman Josef Hecken has defended the committee's record for backing pharmaceutical innovation, stating that Germany is still an important market for innovative pharmaceutical companies as the AMNOG law completes its second year. Meanwhile, the Vertex Pharmaceuticals cystic fibrosis drug Kalydeco (ivacaftor) has been given a high additional benefit rating in one group, and a low one in another. |
Implications | Much attention has been focused on Germany in the past couple of years by the international pharmaceutical industry, as the effects of AMNOG's application are assessed. It may indeed be true that Germany remains a very attractive market for innovative pharmaceutical companies, but many outstanding issues still remain. |
Outlook | The pharmaceutical industry will continue to hope for some of its outstanding issues with AMNOG to be addressed, while on the basis of the statements of the G-BA's chairman, Germany continues to be in a leading position in Europe in terms of backing innovation. For Vertex Pharmaceuticals, the G-BA's positive assessment of Kalydeco in children over 12 may indicate that it could retain its additional benefit status, even if it exceeds the annual cost of treatment within which orphan drugs are automatically assigned additional benefit. |
G-BA chairman defends Germany's openness to innovation
Josef Hecken, the chairman of the Federal Joint Committee (G-BA), has defended the early benefit assessment process – part of the process of assessing medicines for added benefit in comparison with existing treatments introduced under the Pharmaceutical Market Restructuring Law (AMNOG) in 2011 – and thereby also Germany's position as a market friendly to pharmaceutical innovation. According to Hecken, after two years of AMNOG's application, it is still more likely that the Association of Statutory Health Insurance Funds (GKV) will consider new innovative medicines to have additional benefits than payors in other countries in which such an assessment processes had been established for some years. As Hecker states, this can be demonstrated by means of a comparative study of the first 28 decision on added benefits: although accepting that the difference in procedures means that a straight comparison between Germany and other countries in this regard is not possible, Hecken concluded that in Germany, around 64% of new innovative medicines are given positive assessments, i.e. are judged to have additional benefits, whereas in other European Union countries, the proportion is about 50%.
Hecken stated that the G-BA decision-making process is comparable with that of France and the Netherlands, where the focus is on the assessment of added benefit, and not so much comparable with England, Scotland, or Sweden, where a reimbursement cap is in place, meaning medicines can be entirely excluded from reimbursement as a result. In Germany, in such cases, drugs will probably be judged to have a low additional benefit, which still enables them to be entered into price negotiations.
Vertex Pharmaceuticals' Kalydeco gains mixed G-BA verdict
Hecken also gave details of the GB-A's verdict on the Vertex Pharmaceuticals (United States) orphan drug Kalydeco (ivacaftor), indicated for the treatment of cystic fibrosis (CF) in patients with the G551D mutation. The G-BA completed its early benefit assessment of the drug on 7 February, concluding that in the case of patients between the ages of six and 11 years, the additional benefit is low, whereas in the case of children aged 12 years and above, and adults, the additional benefit is considerable.
Under German law, orphan drugs for which the annual cost of treatment is not expected to exceed EUR50 million (USD66.8 million) are automatically assigned an additional benefit, thus entitling them to enter price negotiations with the GKV. Although Vertex has calculated that the annual cost of treatment in Germany with Kalydeco will be EUR45 million, in its assessment of the drug's potential annual costs, the German Institute for Quality and Effectiveness in Healthcare (IQWiG) estimated that the actual figure will be about EUR53 million. If annual treatment costs exceed the EUR50 million barrier, then it will be necessary for Kalydeco to undergo a standard benefit assessment by IQWiG, involving the establishment of appropriate comparator therapies. The full documentation on the early benefit assessment of Kalydeco can be accessed, in German, here.
Outlook and implications
The attention of the international pharmaceutical industry in Europe has been on Germany and the effects of the AMNOG law in the past couple of years, and the regulators appear to be keen to emphasise the ongoing centrality of Germany in terms of openness to pharmaceutical innovation, in spite of concerns that the new law may be eroding this impression. Although the statistic quoted by Hecken, stating that 64% of new innovative medicines are assigned an additional benefit in Germany compared with 50% in the EU, certainly suggests that there continues to be strong support for innovation in Germany, it remains the case that many aspects of the new law are controversial with the pharmaceutical industry in Germany – the strength of the GKV's position in the process of assessing drugs for additional benefits being a particularly controversial point (see Germany: 5 December 2012: German pharma industry groups issue strong criticism of GKV's powerful role in assessment of drugs for reimbursement).
Meanwhile, the case of Kalydeco may even be used as an example of Germany's relatively superior innovation friendliness: although the Scottish Medicines Consortium rejected the drug for reimbursement, in Germany, it is automatically assigned an additional benefit as an orphan drug while its revenue remains within EUR50 million, and given the assessment of the G-BA, the likelihood is that if it were to exceed this revenue, it would continue to be judged to have additional benefits after a full benefit assessment by IQWiG (see United Kingdom: 15 January 2013: SMC publishes decisions on 13 drugs in January).