by Jennifer Collins
BERLIN, Feb 13 (APM) - Companies facing Germany’s “tough” stance on pricing new medicines will continue to withdraw even innovative drugs as they fail cost effectiveness testing in Europe’s biggest market, independent experts have said.
They said the determination of Germany to have what it saw as a “sustainable” supply of medicines should not be underestimated but pharma’s would increasingly carefully weight their options including withdrawing drugs they regarded as under-priced.
Despite evidence that the threat to pull treatments was real, Kausal Shah, head of pharmaceuticals & healthcare at Business Monitor International in London said there would be no change in attitude at Germany’s health department and "companies are really going to have to prove cost effectiveness".
On the other hand: "They (companies) won't launch drugs here if they won't get prices they want. The German market is a hard place right now," she said.
Six companies already withdrawn drugs
The reimbursement price negotiation results in 2014 illustrate this, say experts interviewed by APM.
As of the end of 2014, 68 reimbursement prices were agreed between umbrella payer group, GKV-Spitzenverband and pharmas, nine through mediation.
So far, six drugs - or 9% of those that have gone through HTA and gained a price - have been removed from pharmacist's shelves, including Janssen's diabetes drug Invokana (canagliflozin) (APMHE 39868
) and Boehringer Ingelheim's Trajenta (linagliptin) (APMHE 38784
), using the “opt-out” clause following negative added benefit assessments or due to dissatisfaction with the price set by the mediation committee.
Sovaldi was the latest drug to go to mediation after the GKV and Gilead missed a January deadline to agree a reimbursement price, although the payer and pharma managed to reach a price agreement last week without the arbitrator’s input. (APMHE 41438
Focus on financial sustainability difficult for pharmas
Elmar Mand, a professor specialising in pharma law at Philipp University of Marburg, told APM an “appreciable” number of pharmas are unlikely to pull drugs “given the magnitude of the German market”, but the level of opt-outs is “something to think about for the pharma sector”.
“For some drugs, the lack of agreement doesn't appear bad, but for other it is. If you look at it this way, Germany places such high value on the financial sustainability of drugs supply that it could threaten the supply of innovative drugs,” said Mand.
According to experts, the German market has become difficult for the pharma sector because of its effort to contain healthcare costs.
"Invariable penalises" even innovative drugs if priced at premium
Germany is “highly conscious of decisions that could raise the burden of healthcare spend further” and its “rigorous” cost benefit analysis “invariably penalises drugs priced at a significant premium to generics or other cheaper (alternatives),” Joshua Owide, director of healthcare industry dynamics at market analysis firm GlobalData, told APM.
While the upper house of parliament, the Bundesrat, is calling for reforms to pharmaceuticals law AMNOG, Owide said it is “unlikely German health regulators will raise the ceiling price for innovative therapies”.
“Expensive medicines, regardless of the advantages that they provide, are a decisive factor in preventing healthcare spend from spiralling out of control, and the system is therefore vigilant when it comes to agreed price points and reimbursement status,” said Owide.
Still, Shah says that the impact will likely stay minimal in short term.
"While it's difficult to get approval, the (German) market is still very attractive," she said, noting that the country has among the highest drug spend per capita in Europe.
She added: "German spend on drugs is huge - the country has huge market. They want unlimited drugs, and can pay for them."