News Alert: Germany’s largest statutory health insurance fund negotiates rebates of more than 99% for some generics

PRICENTRIC BRIEF:

• Germany’s largest statutory health insurance fund, AOK, has negotiated rebates of more than 99% for some generics, according to confidential documents seen by Apotheke Adhoc
• The insurer inadvertently sent confidential documents containing details of discounts offered by Glenmark, an Indian drug manufacturer involved in the tender, to competitors
• The slip-up means that other competitors in the tender can see the discounts that Glenmark has offered for its drugs, including buprenorphine — the secrecy of the tender process is the way that AOK is able to negotiate the maximum discount for drugs — usually, even after the securing of a contract, only the discount partners are named, and the conditions of the deal remain secret

THE DETAILS

BERLIN, Germany— Germany’s largest statutory health insurance fund, AOK, has negotiated rebates of more than 99% for some generics, according to confidential documents seen by Apotheke Adhoc.

The insurer inadvertently sent confidential documents containing details of discounts offered by Glenmark, an Indian drug manufacturer involved in the tender, to competitors.

The case, which has now been referred to as AOK Baden-Württemberg, shows that “health insurers — especially the AOK association — save several hundred million euros annually with their discount agreements,” according to the CEO of the North Rhine Association of Statutory Health Insurance Physicians (KVNO), Dr. Frank Bergmann.

The slip-up means that other competitors in the tender can see the discounts that Glenmark has offered for its drugs, including buprenorphine. The secrecy of the tender process is the way that AOK is able to negotiate the maximum discount for drugs. Usually, even after the securing of a contract, only the discount partners are named, and the conditions of the deal remain secret.

The document shows that buprenorphine was negotiated to a level of 99% discount, amounting to less than a cent per tablet. A number of the company’s other bids were seen to also be discounted above 80%.

Bergmann added, “This rebate madness is not just about some special drugs, but about those on which many patients are urgently dependent — such as drugs for high blood pressure, Parkinson’s and antidepressants,” further noting that the practice “harms patients and practices alike.”

In 2020, savings by health insurers in Germany totaled EUR 5 billion, compared with EUR 3.9 billion from AMNOG rebates on newer medicines. The AOK group alone achieved savings of EUR 1.9 billion from voluntary rebate contracts.

Bork Bretthauer, Managing Director of Pro Generika, called the high rebates “brutal,” explaining, “Because the tenders are all about being the cheapest, ruinous competition has been the result. How stable and how sustainable can a drug supply be [when] manufacturers have to give away their products?”

Earlier this year, Medicines for Europe published a study unveiling the need for reforms in pricing, reimbursement, and procurement procedures to enable the uptake of generics. According to the report, most countries do not have a tendering system in place for generic medicines in the retail market except Slovakia, Spain, the Netherlands, and Germany.

When determining the winner of the tender, Belgium’s tender considers the most numerous factors in addition to lowest price, including customer service, ongoing patient support, local manufacture, most complete range of indications, quality, proven track record of ability to supply, condition of payment, aggregation, corporate responsibility, and local distance from the supplying warehouse.

Following the release of the leaked documents, some parties are urging for reform of the German pricing model for generic products, which currently awards contracts to manufacturers based solely on the lowest price offered.

 

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