11. November 2010
AMNOG: Key Issues and Consequences
Since 1 August 2010, drug manufacturers been burdened by mandatory rebates, already totaling 1.2 billion euros. As a result of the drug market reform law, this burden to manufacturers is projected to increase to 2 billion € per year. Whether this amount will come as a relief for the insured depends on how insurers use the new tools that have been placed in their hands by health policy.
The decisive factor will be how the newly created early assessment is structured. If it is fair and open to innovation and adequately takes the early assessment point into account, then it won’t compromise the quality of care. The Federal Ministry of Health will have to put regulations on the right tracks.
What remains problematic is that pharmaceutical companies will have to negotiate contracts with the Central Federal Association of Health Insurance Funds, as opposed to with individual health insurers. The fear is that unlike individual insurers, the Central Federal Association will prioritize cost reductions over all else. It will be essential that cost efficiency and quality of care be regarded as equally important.
Background:
For all new drugs, the manufacturer is required to provide appropriate evidence of any additional benefits. It is already the case that, for market introduction or for approval of new application areas, a dossier must be submitted that demonstrates any specific, additional benefits of a drug:
Thereafter, the Federal Joint Committee (G-BA), a group composed of representatives from the medical profession, insurance companies, and hospitals examine the evidence to decide whether any added value will be recognized.
In its decision, the G-BA prepares an initial benefit assessment within three months of initial marketing approval for any new drug. This, in turn, can be used to inform the Institute for Quality and Efficiency in Health Care (IQWiG). For drugs that are not recognized as having additional value, reimbursement amounts are set at prices for a comparably effective drug. For medicines with added value, prices are negotiated on the basis of benefit assessment.
If negotiators are unable to reach an agreement within this timeframe, a central board of arbitration establishes a rebate within three months, which is valid retroactively up to the 13th month after a drug’s initial market introduction. International prices should be used as a basis of comparison in this decision – with recognition, however, of the associated problem that other countries themselves set prices by referencing Germany. The result would be a downward spiral.
Both sides can appeal against this decision, and request additional cost-benefit assessments. This process would not, however, have any suspensive effects.
For so-called "Orphan Drugs" that treat rare diseases, quick review is not an option.
New will be, however, that the G-BA may request that an Orphan Drug manufacturer prove any additional benefits of its drug, if the particular drug has achieved gross revenues of more than 50 million € within one year.
German Federal Health Minister Philipp Rösler
(© picture alliance)
The German health system is faced with a challenge to the legitimate right of patients to secure participation in medical progress, to increase efficiency reserves in all areas of healthcare, all while ensuring quality. Whether the drug market reform law can make a legitimate contribution, or once again ends up as a mere cost-cutting instrument, is still an open question.
The decisive factor will be how the newly created early assessment is structured. If it is fair and open to innovation and adequately takes the early assessment point into account, then it won’t compromise the quality of care. The Federal Ministry of Health will have to put regulations on the right tracks.
What remains problematic is that pharmaceutical companies will have to negotiate contracts with the Central Federal Association of Health Insurance Funds, as opposed to with individual health insurers. The fear is that unlike individual insurers, the Central Federal Association will prioritize cost reductions over all else. It will be essential that cost efficiency and quality of care be regarded as equally important.
Background:
For all new drugs, the manufacturer is required to provide appropriate evidence of any additional benefits. It is already the case that, for market introduction or for approval of new application areas, a dossier must be submitted that demonstrates any specific, additional benefits of a drug:
- Does it treat a disease comparatively better than current medications?
- Can an accelerated healing process be expected?
- Can adverse effects be prevented?
- Can the new drug significantly improve a patient’s quality of life?
Thereafter, the Federal Joint Committee (G-BA), a group composed of representatives from the medical profession, insurance companies, and hospitals examine the evidence to decide whether any added value will be recognized.
In its decision, the G-BA prepares an initial benefit assessment within three months of initial marketing approval for any new drug. This, in turn, can be used to inform the Institute for Quality and Efficiency in Health Care (IQWiG). For drugs that are not recognized as having additional value, reimbursement amounts are set at prices for a comparably effective drug. For medicines with added value, prices are negotiated on the basis of benefit assessment.
If negotiators are unable to reach an agreement within this timeframe, a central board of arbitration establishes a rebate within three months, which is valid retroactively up to the 13th month after a drug’s initial market introduction. International prices should be used as a basis of comparison in this decision – with recognition, however, of the associated problem that other countries themselves set prices by referencing Germany. The result would be a downward spiral.
Both sides can appeal against this decision, and request additional cost-benefit assessments. This process would not, however, have any suspensive effects.
For so-called "Orphan Drugs" that treat rare diseases, quick review is not an option.
New will be, however, that the G-BA may request that an Orphan Drug manufacturer prove any additional benefits of its drug, if the particular drug has achieved gross revenues of more than 50 million € within one year.
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