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AMNOG and Sovaldi – no change, for now at least
AMNOG - and the system of early benefit assessment of new innovative drugs which it introduced - remains the most widely-discussed aspect of Germany's pharmaceutical regulatory landscape. Recently, the debate about potential changes and modifications to the AMNOG law has intensified, prompted by discussions about the price negotiations taking place between the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) and Gilead Sciences concerning the latter's chronic hepatitis C virus (HCV) drug, Sovaldi (sofosbuvir).
Sovaldi raises spending concerns
The G-BA published its final resolution on the early benefit assessment of Sovaldi in July, deciding that the drug showed an additional benefit in most patient groups. Since then, representatives of GKV funds have expressed concern over the price of the drug, and more recently they have been joined in this concern by some opposition politicians. New protease inhibitors Sovaldi and Olysio (simeprevir) have already become the leading treatments for HCV in Germany, overtaking the former market leaders, Victrelis (boceprevir) and Incivo (telaprevir), in terms of numbers of prescriptions; Sovaldi is reported to have taken just three months to claim precedence over these drugs, with prescription numbers for Sovaldi and Olysio reported at around 4,000 per month, while those for the previous two main products used in HCV down to fewer than 60. This has led to concerns about the impact of such a high number of packages of a medicine as expensive as Sovaldi being prescribed and reimbursed by GKV funds, before its reimbursement price has been negotiated. According to estimates by the AOK Niedersachsen GKV fund, reported by German pharmaceutical news provider Deutsche Apotheker Zeitung in August, the spending by all GKV funds on Sovaldi could reach around EUR1 billion (USD1.25 billion) in 2014.
Largest association of GKV funds calls for retrospective application of reimbursement price
In August, the Federation of Alternative Health Insurance Funds (vdek) - the largest group of GKV funds in Germany - published a press release in which called for changes to the AMNOG law, which would mean that the reimbursement price negotiated by the GKV-Spitzenverband and producers would be applied retrospectively from the drug's launch, rather than from the end of the first 12 months of marketing, which would mean that producers would have to pay back the difference between spending by GKV funds on the drug while the list price applied and what that spending would have been if the reimbursed price had applied. The chief executive officer of vdek, Ulrike Elsner, gave the example of Sovaldi, but emphasised that it was not an isolated case, mentioning also Bristol-Myers Squibb (BMS, US) advanced melanoma drug Yervoy (ipilimumab) and the Vertex Pharmaceuticals (US) cystic fibrosis drug Kalydeco (ivacaftor).
Subsequently, the main opposition party in Germany, Die Linke, requested explanations from the government about current pharmaceutical pricing and reimbursement policy at the end of September, and it was not satisfied with the answers given. German pharmaceutical news source Deutsce Apotheker Zeitung reports that representatives of Die Linke asked whether the government would consent to the requests of GKV funds to apply the reimbursement price retrospectively to a drug's launch date in Germany, to which state secretary of the Ministry of Health Annette Widmann-Mauz said that the AMNOG system was a "learning system", and that it can be changed as deemed necessary. Although no promise of changes were given, the possibility of change was emphasized, and the question remains as to the point at which the coalition government would decide that a particular price was too high.
GKV drug reimbursement spending growth increases markedly
Looking at the drug reimbursement spending of the GKV funds so far in 2014, it might be argued that concern about the pace of spending growth would be justified. The German Ministry of Health has reported that the GKV funds spent 8.58% more on drug reimbursement in the first half of 2014 than in the first half of 2013; some of this is certainly associated with the reduction of the mandatory discount on medicines not included in the reference-pricing system from 16% to 6% from 1 January to 31 March, with a readjustment to 7% from 1 April. However, there is also evidence that spending on patented pharmaceuticals is growing dynamically, and is driving the rise in spending; to compare, drug reimbursement spending by the GKV funds rose by just 1.5% y/y in 2012 and 2.4% y/y in 2013.
Government resists calls for AMNOG changes
The German government, however, has not shown itself to be keen to make any changes to the AMNOG law in the foreseeable future. At a recent meeting between the Federal Association of Pharmaceutical Manufacturers (BAH), politicians from various parties and representatives of GKV funds in Berlin, Michael Hennrich, member of the Bundestag Committee on Health for the Christian Democratic Union (CDU, the leading party in the so-called "Union parties", which is the dominant grouping in Germany's coalition government), is reported by pharmaceutical news source Apotheke Adhoc as saying that there will be no new pharmaceutical law changes in the near future. Furthermore, Annette Widmann-Mauz has been quoted by Pharmazeutische Zeitung as saying that no changes will be made to the AMNOG law in connection with a complaint made by Die Linke concerning a potential loophole, allowing pharmaceutical companies to bring their products on to the market without submitting a value dossier, or submitting an incomplete dossier. In these cases, the drugs concerned are added to the reference pricing system, or are assigned a price not exceeding the appropriate comparator therapy, but Die Linke are reportedly concerned about drugs with lower benefits than those already on the market being brought into the system in this way.
Conclusion - is this just the calm before the storm?
The Germany Ministry of Health recently announced that the GKV funds had a financing deficit of EUR3.9 billion in the first half of this year; during the last few years, the funds have accumulated a significant overall financial surplus, and so this deficit presents no threat; however, rising drug expenditure was mentioned as a reason for the deficit. The German government appears to be particularly cautious not to provoke any new dispute with the pharmaceutical industry, and with a growing level of economic uncertainty in the wider German economy and the Eurozone, it will want to be seen to back what is a very important sector of the German economy. At the same time, it will hear the growing complaints of the opposition and the GKV funds, which will grow louder if pharmaceutical spending growth continues to increase at such a dynamic rate next year. And then it might be time to act.
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