New drug 'added benefit' insufficient to justify pharma company prices - key German insurer

BERLIN, Feb 2 (APM) - One of Germany’s biggest statutory health insurers has criticised the country’s health technology assessment (HTA) system, saying added benefit is not enough to justify the prices companies achieve after they have got a positive assessment.
Kaufmännische Krankenkasse (KKH) said Germany's system was flawed in that it allowed companies free (and therefore inflated) drug pricing for the first 13 months until HTA assessment was complete and then the finding of an added benefit was too influential in terms of the price from then on.
In a Friday statement, it recorded a 10% increase in drug spend in 2014 compared to the previous year - paying 773 million euros for pharmacy dispensed drugs.
It blamed the "explosion in costs" on the reduction in the mandatory discount given by pharmas to statutory health insurers from 16% 7% in April 2014, as well as high drugs prices, citing Gilead’s hepatitis C blockbuster Sovaldi (sofosbuvir) as an example.
KKH chairman Ingo Kailuweit said in the statement that while "innovative medicines" such as Sovaldi certainly have added benefit for certain policyholders, it was "improper to demand 700 euros for a single tablet resulting in individual treatment costs amounting to 60,000 euros and more".

KKH joins GKV criticism of free drug pricing in first year

Kailuweit also said that on average patent-protected drugs cost eight times more than generics and joined the umbrella payer group GKV-Spitzenverband in criticising pharmas for seeking "high" prices in the first year of market roll-out before a reimbursement price is set with the payer. (APMHE 41231)
"Drugs manufacturers can charge what they want for a new medicine on the market in the first year and have carte blanche - that has to be urgently changed," said Kailuweit.
The GKV called for a drug price claw-back, saying reimbursement prices should be set retroactively to the market-launch date, meaning pharmas could be forced to pay back the difference between the entry price and the price agreed with the payer, usually after 13 months.

Drug spend under stain, call for political intervention in pricing

According to the KKH, the "situation on drug market was more strained than ever and will deepen" if politicians don’t step in.
Last week, statutory health insurers announced their drug spend increased 9% to 32.4 billion euro in 2014 and German drugs sales jumped 4.5%, partly thanks to new hepatitis C drugs. (APMHE 41264)
However, a Friday statement from German pharmacists association, ABDA, highlighted that recorded savings expected as a result of discount contracts have not yet been included in calculations and "will significantly improve earnings".



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