Pharma calls for urgent change in German system
pharmafile | June 8, 2012 | News story | Sales and Marketing | AMNOG, EFPIA, Germany, Trajenta, VFA
Europe’s pharma industry has called on the German government to re-think its approach to pricing, saying it is could cause huge damage if it remains in place.
Germany is Europe’s largest and most important market, but pharma leaders have been dismayed at recent reforms, which seem to place little value on new medicines.
Pharma industry body EFPIA has made the call at its annual conference, saying that patient access is being endangered by the new pricing system, as well as Germany’s status as a home for pharmaceutical innovation.
Germany has introduced a series of reforms which EFPIA calls ‘punitive measures’ – including a 16% price cut, and an international reference pricing system that links the price of medicines in Germany to those in countries like Greece.
Finally, its new pricing system AMNOG (Arzneimittelmarkt-Neuordnungsgesetz) which was introduced in early 2011 has also been heavily criticised for its methods, including linking the price of new medicines to generics.
Richard Bergström, director general of EFPIA said: “The net effect is that German citizens will not benefit from access to innovative therapies that are available to citizens across Europe and the rest of the world.”
He adds: “Germany has traditionally led the rest of Europe in providing quick access to new medicines for its citizens and recognising the value of new medicines and vaccines. This position is now under serious threat. It is absolutely appropriate that Germany manages its healthcare budget carefully and assesses medicines to ensure that they are priced at a level that reflects the value they deliver.
“However, early experience with AMNOG is very disappointing. The problems lie with a law that is flawed in parts, inflexible interpretation, and an unwillingness to consider creative solutions.”
EFPIA says its member companies have found that the choice of comparator often differs from that chosen for the development programme after consultation with the European Medicines Agency (EMA). The German system’s choice of comparator is being used to force pricing for new medicines towards generic prices, undermining the product from launch.
One notable case is that of Boehringer Ingelheim and Lilly’s diabetes drug Trajenta. In September last year the companies announced that they would not launch the drug in Germany because of the country’s unreasonable pricing demands.
EFPIA is calling for a “more thoughtful and interactive choice” of comparators, based on medical and patient reality. It says price comparisons should be made with patented products, not generics, and there should be more meaningful consultation and discussion.
“We have found the set-up very rigid. Unfortunately, many of my member companies have been forced to announce that several new medicines will not be made available in Germany, because the model seeks to base the price for new medicines on what is paid for much older, generic medicines,” says Bergström.
“This is not good for German patients and not good for the country as it strives to retain companies and attract new investments. AMNOG is in a learning-phase. We need to work together to ensure that it works the way it is intended to meet the needs of German patients.”
He added: “The original intent was good, but some things were lost in translation to the practical model.”
Another concern is the choice of reference countries as a basis for price negotiations.
“The decision by the arbitration panel to include Greece in the basket of countries is hard to understand.” says Bergström. “The pharmaceutical industry accepts short-term sacrifices in Greece to support the country at a crisis moment. When trying to benefit from lower prices in Greece, German policy makers fail to acknowledge that some countries have to pay more to sustain innovation. And Germany has benefited more than most countries from investments by the pharmaceutical industry”, he concluded.
Birgit Fischer, director general of Germany’s pharma organisation VFA adds: “Europe is in a crisis. Growth will only come from sectors that innovate. A key way forward is to invest in research and development, in order to keep Germany and Europe capable of competing. Germany has the ability to strengthen Europe. Historical trends in pharmaceutical investment show that Germany benefits more than any other country from a strong European pharmaceutical environment – it therefore has the most to lose if Europe appears resistant to innovation”.
She continued: “The path chosen by the German government poses a challenge to patient health and to the reputation of Germany as a home of innovation. These are difficult issues.”
Fischer said the VFA and EFPIA were willing to work with the German government and sickness funds to find a ‘pragmatic solution’ to the problems around AMNOG and reference pricing.
Andrew McConaghie
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