AMNOG Meets Obstacles in First Discounted Prices

20 Aug 2012 Anne-Charlotte Ackermann

The implementation of Germany's AMNOG pricing reform is facing its first significant hurdle due to the inadequacy of pharmacy software to implement the new system. According to the Association of German pharmacy software houses (ADAS), pharmacy software are not yet prepared to handle the discount data, which is causing delays in the application of the first discounted prices.

This is linked to the fact that many questions remain unanswered including whether pharmacy receipts should be printed with the full or reduced drug price and whether the value added tax should be based on the later or on the list price. While German authorities, pharmacists, wholesalers and manufacturers are in talk to solve these technical issues, AstraZeneca's blood thinner Brilique continues to be available at its list price (free) in German pharmacies.

The slight delay in the application of the new discounted price will have no impact-either positive or negative-on sales or savings since Brilique's discounted price applies retroactively from January 2012. But these technical hurdles show that German authorities have been perhaps too intensively focused on the evaluation/negotiation process, passing over the final phases of the new pricing mechanism and leaving practical questions unanswered.

One striking point here is the VAT issue, which according to various media reports, is expected to be applied on the list price, and not on the discounted price. This particular point is not surprisingly causing a great discontent among the industry and could fuel discussions for several weeks.

As such, it remains uncertain whether the new discounted price of InterMune's idiopathic pulmonary fibrosis drug Esbriet-scheduled for mid-September-will be delayed in the same way. But in the meantime, let me give you a fresh update on recent AMNOG developments in Germany.

Brilique Passes AMNOG Test By launching its blood thinner Brilique on the day the reform came into force, AstraZeneca became the centre of attention. First to file a value dossier, first to go through the new early benefit assessment, and first to initiate and complete price negotiations with pricing authorities, AstraZeneca had a challenging time but nevertheless achieved a very positive outcome.

3% - That's the price cut German sick funds obtained from the UK firm during price negotiations for Brilique. On the whole, it took them five meetings to come to an agreement based on the relatively high innovation score granted by the Federal Joint Committee (G-BA). With a list price at EUR2.48 per day and a discounted price at EUR2, the overall discount reaches 19%. But if we take into account the 16% mandatory rebate which is applied on the list price of all non-reference priced medicines, the price cut attains in reality only 3%.

Brilique's price structure, AMNOG Test, source IHS Healthcare

a low innovation score granted by German regulators, Esbriet - the first orphan drug to go through price negotiations - had less success than Brilique with a negotiated rebate of 11% on top of the statutory 16% manufacturer's discount.

14 Innovative Molecules in Price Negotiation
Thus far, about two thirds of molecules that went through early benefit assessment have entered into price negotiations with sick funds. The rest have been reference priced, most of the time against generics and most of the time because of disagreements related to the appropriate comparator

IHS Healthcare based on G-BA data, as of 14 August 2012, Pricing Outcome January 2011-July 2012 - AMNOG

Only two medicines-Brilique and Esbriet-have completed price negotiations. However, a total of 14 molecules are deemed to bring an added benefit-even low or unquantifiable-are currently under negotiation with the central German sick fund. Hepatitis C drugs Incivo and Victrelis, multiple-sclerosis drug Gilenya; and prostate cancer treatments Zytiga and Jevtana should be next to get a discounted price. It will be interesting to see how things turn out for these innovative medicines and how sick funds negotiate the price of compounds that are compared to the same appropriate comparators i.e.: Zytiga and Jevtana, Incivo and Victrelis.

What is certain is that savings linked to the implementation of AMNOG will not be felt before some time, as only a handful of discounted prices will be applied from 2012.

Posted 20 August 2012


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