Legal questions around the “Mischpreis” pricing approach are still hanging over sickness funds and manufacturers in Germany. The current price setting methodology as part of AMNOG negotiations take average weighted prices and considers the value and price potential across all indications and patient subgroups (‘mixed-price’). This methodology has been noted to be potentially at odds with the law in a 2017 regional court ruling. Another ruling from the federal social courts is expected this summer, possibly as soon as June. Together with the anticipated “prescriber information system” which will provide clinicians with more information on AMNOG benefit assessments, value and comparative pricing, the issue of access to innovative medicines is suddenly becoming a big topic in a country that is traditionally known for fast and unrestricted reimbursement.
Germany is one of the few countries that apply a “negative list” reimbursement approach, i.e. medicines are automatically reimbursed as per label unless proven non-economical or unsafe. The mindset of having unrestricted access to medicines prevails in Germany and reimbursement exclusions are generally rare for innovative prescription medications.
With a potential change to drug pricing looming, experts are concerned that where in the past mixed/average prices were applied, reimbursement exclusions could come in. At the same time, if a new prescriber info system provides prescribing recommendations with a strong economic and reimbursement focus, this may mislead or scare clinicians, limiting the uptake of new medicines. On the back of the preliminary court ruling, some regional sickness funds have already challenged prescribing of diabetes products in certain patient groups where no additional benefit was shown in the AMNOG evaluation. Physician associations are already concerned about threats of paybacks and budget audits in these instances.
At this point, no real alternative approach to averaging prices across indications has been proposed. Methodologies to improve legal alignment in price calculations and appropriate patient group estimations are emerging but bring their own challenges of implementation. Different stakeholders from industry and medicine have highlighted how the current pricing is the most feasible consensus and there seems to be a general desire to keep things as they are.
The main aspects to come out of the summer court ruling will relate to the price setting approach for the AMNOG pricing arbitration board and as to whether any changes or updates are required to clarify and outline the AMNOG pricing approach in more detail.
It is clear that the indications/ subpopulations with “no additional benefit” as an AMNOG outcome continue to come under fire, one way or another, both in terms of prescribing and pricing. The German system is looking at challenges to the value-based pricing (VBP) concept and this is not surprising when we look at the AMNOG HTA approach: the assessment system has a strong relative (comparative) focus, and at times leaves little room to recognise a product’s value in a broader context other than current SOC. Other measures of value such as e.g. the SMR in France or an innovation rating or therapeutic context assessment are some examples. Further, at the heart of the issue, we see the typical challenges for pricing and reimbursement for complex multi-indication products: As for many healthcare systems, pricing and access methodologies were designed based on the old broad-use single indication products.
In Germany, lawmakers and industry will have a chance to mark a clear way forward refining policies and anchoring VBP in Germany. The main vision, however, should be to keep patient access as it has been known or face a complete redefinition of patient access in one of Europe’s largest economies.
Background and key issues:
- The 2017 court case brought forward by the sickness funds concerned the products Eperzan and Zydelig: after failed AMNOG price negotiations pricing was handed over to the designated arbitration board. The issue here was that the arbitration board pricing decision making was not transparent and the price seemingly picked at will – this was found to be illegitimate by the court.
- The court ruling also highlighted that the practice of the ‘mixed-price’ may be at odds with the law – this was a side comment, not a legally binding ruling
- The ‘mixed-price’ approach uses different AMNOG ratings across patient populations, the number of patients in each subgroup and relevant comparators to arrive at a “mixed” or average price for the whole product
- In line with the AMNOG pricing approach and price negotiation framework agreement, a product price must be “economic” and cannot exceed the SOC price. The concept of the average price is problematic in that sense, as for indications with no additional benefit the price will be too high and most likely for indications with added benefit too low
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