The chairman of the Federal Joint Committee (Gemeinsamer Bundesausschuss: G-BA) has strongly criticised the system of negotiating prices for new innovative drugs under the AMNOG law, focusing on the lack of correlation between the discounts negotiated and the level of additional benefit ascribed by the G-BA.
IHS Life Sciences perspective | |
Significance | The G-BA's impartial chairman, Josef Hecken, has criticised the price negotiation process of the AMNOG law, focusing on the lack of correlation between the level of additional benefit accorded to a new drug by the G-BA and the discount negotiated by the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) and the producer. |
Implications | Hecken was responding to a study by the G-BA into the discounts negotiated for drugs which have undergone the early benefit assessment process; the recent drug prescription report of the Scientific Institute of the AOK shows that among the 25 drugs which have undergone the process with the highest turnover in Germany, the extent of the discount appears not to be in any way connected to the extent of the drug's additional benefit, as set by the G-BA. |
Outlook | This is a new criticism of the AMNOG system, coming soon after some intense criticism, focusing on the year's free pricing before the reimbursement price is negotiated, in the context of increasingly high prices of innovative drugs. It matters because of Hecken's senior position in the highest decision making authority in the German public healthcare system. It remains to be seen if the policy makers are inclined to take notice, although the critical voices are reaching a kind of critical mass. |
Josef Hecken, the impartial chairman of the Federal Joint Committee (Gemeinsamer Bundesausschuss; G-BA,) has directed strong criticism at the lack of correlation between the extent of the additional benefit decided on by the G-BA at the conclusion of the early benefit assessment of drugs and the discount subsequently negotiated on these drugs, at a recent event in Berlin, reports Ärzte Zeitung. Hecken is reported to have argued in favour of transferring the negotiation mandate from the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) to individual funds and larger fund groups, which, he argued would result in very different decisions.
As the source reports, the trigger for Hecken's critical remarks was a study by the G-BA into the extent of discounts achieved in the price negotiations – a key element of the system of assessing new innovative drugs introduced with the Pharmaceutical Market Restructuring Act (Arzneimittelmarkt-Neuordnungsgesetz: AMNOG) in 2011. Hecken is reported to be shocked by the fact that the negotiation process is carried out in exactly the same way for products which are assessed by the G-BA to show no additional benefit as it is for products which are assessed to show considerable additional benefits. He is reported as stating that he had thought that drugs being judged by the G-BA to have a considerable additional benefit would end up with a smaller discount than those judged to have no additional benefit – although this does not appear to be the case. Negotiated discounts tend to be between 17% and 35% of the list price of the pharmaceutical company, although the extent of the additional benefit does not appear to affect this.
The source recalls that under the coalition agreement, changes were due to be introduced into the AMNOG law which would mean that at least one representative of the individual GKV funds would be present at the price negotiations between the GKV-Spitzenverband and producers. However, Hecken is reported to have only "scorn" for the way this plan has been realised, with the question reportedly being thrown back and forward between the GKV-Spitzenverband and the Bundestag health committee, with the only conclusion being that some kind of independent supervisory body should be present to observe the price negotiations.
According to Ärzte Zeitung, representatives of innovative pharmaceutical companies voiced their support for Hecken's comments, with Dr.Markus Frick, the executive director of the Association of Research-Based Pharmaceutical Companies (vfa) reportedly stating that companies would be very happy to move to a system based on risk-sharing agreements and performance-based reimbursement, adding that the absence of these in AMNOG was "collateral damage".
Outlook and implications
Looking at the 2014 drug prescription report issued by the Scientific Institute of the AOK (Allegemeine Ortskrankenkassen) group of GKV funds in September, it can be seen, from the example of the 25 drugs with the highest turnover in Germany which have undergone the AMNOG process, there is little variation in the discounts between the different levels of additional benefit ascribed by the G-BA. These examples can be found towards the end of this press release concerning the drug prescription report, at the end the document, here (in German).
Ärzte Zeitung reports that the level of dissatisfaction with the current AMNOG system is growing. Indeed, the question would naturally arise from the fact that the early benefit assessment procedure results in an "innovation score", with more innovative drugs – i.e. those which are considered to have a higher level of additional benefit – being given a higher score, of what benefits this higher innovation score will yield in the price negotiation process. The answer that would most logically follow would be that the drugs with the higher innovation score would be permitted to offer the smallest discounts on their list price. If this is not the case, and there is no particular transparent explanation of this, to wonder why not is a natural reaction.
This strong criticism of the AMNOG process comes quite soon after it came under quite intense scrutiny and criticism in the context of the price negotiations for the Gilead Sciences new (US) hepatitis C virus drug Sovaldi (sofosbuvir), with various groups calling for changes to make producers to pay back any additional income from the first year of marketing their products at the list price, before a discounted price is negotiated (see Germany: 29 October 2014: German government sees no reason to amend AMNOG).
Hecken's criticisms are significant because of their intensity and because of his senior position in the highest decision-making authority in the German public healthcare system. While the German coalition may not like the idea of changes to AMNOG at the moment, they have described it as a "learning system", and that it is open to changes. It cannot be ruled out that those changes could come sooner than anticipated.