- The German cabinet has passed the long-discussed “Financial Stabilisation of the Statutory Health Insurance System” (GKV-Finanzstabilisierungsgesetz) bill, first proposed by the country’s Health Minister Professor Karl Lauterbach in March this year.
- The final draft includes a number of “significant” measures, including a reform of the AMNOG process, amended AMNOG negotiating powers, and a change in the orphan medicine threshold for benefit assessment.
- In addition to financial measures, the bill delays the introduction of the biosimilar substitution initiative by a year, meaning it will eventually take place in August 2023, as there has been a lot of pushback. A number of pharmaceutical associations have already voiced their disappointment at the passing of the bill, including the VFA and GKV-S.
BERLIN, Germany – According to the Ministry of Health, the measures will help “prevent a sharp increase in the additional contribution rates in the coming year,” by tackling the country’s projected deficit of EUR 17 billion for 2023.
When announcing that the bill had cleared the cabinet, Lauterbach added: “Especially in times of crisis, the social systems give the population security. We found a very large deficit in health insurance. And we have a difficult crisis because of the catastrophic war in Ukraine.
“Therefore, with the reform, everyone involved must make a contribution to short-term stabilization. In addition, we will of course continue to work on long-term structural reforms with the goal of balanced finances. For the hospital sector, we have used a first-class commission that works extremely efficiently. Overall, our goal is for statutory health insurance to remain first class. Without compromising on supply. And benefit cuts for insured persons are excluded.”
The final draft includes the following measures:
- Under the terms of the new draft bill, the orphan medicine threshold would be lowered from the current EUR 50 million to EUR 20 million: This could have a “severe impact” on all future launches of orphan drug launches.
- The principle of free pricing shall be limited to the first six months instead of the current 12 months. This means that the AMNOG rebate will apply from month seven following the launch of a product.
- Introduction of an additional mandatory 20% rebate for combination products with new compounds.
- In the future, the price negotiations between the pharmaceutical company and the National Association of Statutory Health Insurance Funds will also include an agreement on annual budgets and volumes which will also apply for follow-on indications.
- Setup of a “solidarity fund” of EUR 1 billion yearly for 2023 & 2024: Companies obtaining reimbursement within the statutory health insurance system for orphan drugs and patented medicines will have to contribute to the fund based on their sales within the system.
- The price freeze is extended for another four years after 31 December 2022. The price freeze was introduced back in 2010 and allows only very limited, or “inflation-reflecting” reimbursement of price increases for medicines. Following the most recent extension in 2017 for another five years, the price moratorium was expected to expire in 2022
- Penalties will be introduced for uneconomical pack sizes
- Mandatory rebate on patent-protected drugs outside the reference pricing system will increase from 7% to 12% for one year, with hopes to save approximately EUR 1B
- The price moratorium on pharmaceuticals will be extended until the end of 2026.
Additionally, AMNOG rebate negotiations will be modified to give the GKV-S increased powers:
- Medicines judged by the body to offer “minor” or “nonquantifiable additional benefit” would be priced in line with patent-protected comparators.
- Drugs that offer “no additional benefit” would generally have a lower rebated price than patent-protected comparators.
- Medicines that have “considerable” or “major additional benefit” will be exempt from these guidelines and in addition, a discount formula will be applied to patent-protected comparator therapies that have not yet undergone a benefit assessment, for example, if they were launched before AMNOG.
The bill delays the introduction of biosimilar substitution by a year, meaning it will eventually take place in August 2023, as there has been a lot of pushback. The bill also stipulates that substitution will initially be restricted to biologics that are administered by medical personnel.
Biosimilar substitution was first announced in 2019 under Germany’s “better safety in drug supply” (GSAV) bill, but at the time was set to be implemented in 2022 – the Federal Joint Committee (G-BA) then published its first draft of the biosimilar substitution rule on April 14 this year.
However, BAH, the Federal Association of the Pharmaceutical Industry (BPI), the AG Pro Biosimilars, and the Association of Research-Based Drug Manufacturers (vfa) then called on the G-BA to “take action” as it is “unacceptable to undermine the safe care of patients with a view to savings prospects that are by no means assured and, at the same time, to endanger Germany as a pharmaceutical location.”
Pharma Industry Worries of System “Weakening”
When the news broke that the cabinet had passed the bill, Dr. Doris Pfeiffer, Chairwoman of the Board of Directors of the National Association of Statutory Health Insurance Funds, was one of the first parties to react, calling the bill “short-term relief” and suggesting “structural problems are not solved.”
She explained, “The contributors who are supposed to bear the brunt of the necessary additional income will suffer most of all. In addition to access to the reserves of around 4 billion euros saved by the contributors, they will have to pay higher additional contributions from 2023. In view of the high inflation rate and the expected economic development, this is the wrong signal from our point of view. Rather, the economic crisis requires sustained measures and thorough, real structural reforms in order to raise the existing potential for efficiency, for example, in the hospital sector or in medicines.
The German Association of Research-Based Pharmaceutical Companies (VFA) also suggested that with the passing of the bill, “the federal government continues to steer undeterred towards a weakening of the pharmaceutical location and health care in Germany.”
“Our industry is already making a major contribution to stabilizing the GKV finances,” Steutel continues. Thanks to fixed amounts, AMNOG discounts, mandatory deductions and individual discounts, the savings contribution today amounts to around 21 billion euros. In addition, companies are currently cushioning the enormous price increases for supplies and energy. Because unlike other industries, they can hardly pass these costs on to consumers, because the existing price moratorium and the AMNOG regulations almost freeze the prices.
The VFA believes deep interventions in the “proven and practiced pricing system of the AMNOG are to be made without necessity,” without weighing the consequences for the availability of innovative medicines.
Not only are the measures “significant” in themselves, but when applied together they also have a “cumulative effect,” Steutel noted.
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