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AMNOG ten years on: Impact on the Europe top 5 price level hierarchy

18 March 2021 Floriane Reinaud

Ten years after implementation of the AMNOG reform in Germany, the price level hierarchy among the Europe Top 5 markets has clearly been disrupted, which could have far-reaching consequences for the launch sequence and access of innovative drugs in Europe's major markets. This is what is revealed in IHS Markit's latest comparison of innovative medicine prices from our proprietary POLI service.

Germany is no longer the highest priced market

Based on our latest data from a sample of 149 innovative medicines, we have created an Average Price Index which concludes that Germany is the country with the lowest level of prices. Spain and Italy are at the highest priced markets - with prices commonly being in the same range, followed by France and the United Kingdom.

Average drug price index europe AMNOG

To better analyze the data, it is worth keeping in mind that no formal pricing and reimbursement procedures are in place at launch in Germany or the United Kingdom. Medicines are commonly launched in these countries first. Several months or years can be necessary for drugs to be available in each of the five countries, which leaves room for price cuts to occur in early-launched markets.

For instance, in our sample, none of the medicines approved by EMA in 2020 or 2021 are available in all five markets; and two products only approved in 2019 are available in all markets. For medicines approved in 2018 though, 16 are available in all five markets.

Innovative medicine price erosion in Germany while they remain constant in other countries

IHS Markit also considered the same medicines and compared the prices at launch for 115 out of the 149 medicines analyzed - since some of the presentations for the current price index were not the first presentation commercialized. In this case, the trend is opposite. Germany ranks first, suggesting medicine price fluctuation over time.

drug price at launch AMNOG

In order to illustrate the price trends, a few innovative medicines were used as case studies and their prices tracked from time at launch to today.

The two examples of medicines approved by EMA relatively recently (2019) highlighted below - Dovato and Skyrizi- demonstrate the fact that Germany remains a high-priced market at launch.

Dovato drug price amnog

Skyrizi drug price amnog

The following examples - Lenvima and Mekinist - illustrate how medicine prices change over time. At launch, prices were higher in Germany, then dropped while prices in other countries remained constant. Moreover, the data shows that medicines in Germany are commonly impacted with several price cuts in a relatively short period of time. Indeed, the AMNOG reform does not only have an impact on the first price review - which is one year after first commercialization - but also when new indications are approved later on. For instance, Mekinist - approved in four different indications - was assessed by the G-BA for all of them and has already suffered three price cuts in just five years. Germany has therefore gone from the highest price country in 2015, to the lowest priced country now. Prices in other countries have mostly remained constant - a critical distinction.

Lenvina drug price amnog

Mekinist drug price AMNOG

Our data also shows that the first price cut linked to the AMNOG reform commonly occurs before pricing in countries where formal pricing and reimbursement procedures are in place, namely France, Italy or Spain.

Given the results of our data, IHS Markit believes it is a top priority to target the German market at the beginning of the launch sequencing in order to secure a high price level at launch. However, certain major pharmaceutical markets, including France, Japan or Canada, use prices in Germany in their international reference pricing (IRP) rules. Therefore, the precise timing of launches becomes highly sensitive to the German market - will the initial price, or the lower post-AMNOG price, be referenced. This will have a critical impact on the overall outcome of prices in these markets.

A thorough methodology with robust data

Our sample is based on 149 innovative medicines available in each of the 5 analyzed markets: France, Germany, Italy, Spain and the United Kingdom. For each medicine considered in this analysis only one common presentation - brand name/active ingredient/form/dosage/number of units - was used to allow for an optimal comparison.

For each brand, current manufacturer prices - March 2021 - were compared. In the United Kingdom, prices were converted into Euro using the following exchange (1GBP = 1.17 EURO). Given the fact that Germany was well-known to be a high-priced country, an index was created for each brand, using this country as the reference (100). An average price index based on the individual 149 case studies was calculated. Data is available in current medicine price index chart above.

Posted 18 March 2021 by Floriane Reinaud, Director, Healthcare Research and Analysis, IHS Markit

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