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German law could see pharma discounts published

Published on 18/02/14 at 09:18am
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Pharma companies are apprehensive about German lawmakers opening Pandora’s Box this week if they go ahead with plans to publish discount details each firm gets for its regional medicine.

Specifically the legislation, if enacted, would force pharma to report the reduced prices they negotiate with insurers. The law could be in force as soon as April.

Speaking to Bloomberg Ina Klaus, a health ministry spokeswoman in Berlin, said this would mean that firms would have to report rebated prices instead of their original list prices to databases such as IMS Health.

The revised law will make it clear that the list price isn’t what’s paid in Germany, she added, but rather show the actual price paid, which includes the discount - something never published before.

This is important as Germany is a price referencing country to a number of other markets, and pharma is worried that by showing the discounts it receives in the country, it may be forced to drive down prices.

Discounts vary significantly, but can be around 20% off drugmakers' list prices, according to analysts at Thomson Reuters.

Drug firms have had to negotiate rebates on new medicines with German insurers for the past three years. Under the new law however, instead of referring to rebates negotiated between drugmakers and insurers, the law will refer to reimbursement.

The shift may seem small but it means the talks are really about price, not discounts, said Hagen Pfundner, head of Roche’s German business at a conference last week.

Ulrich Huwald, a sector analyst at brokerage M. M. Warburg, said: “Right now, the negotiated (discounted) price is not readily available information. I think pharma companies have a point in demanding that it stays that way.

“They have a right to confidentiality and more disclosure would hurt their business.”

England’s price watchdog NICE, via the Department of Health, also negotiates discounts with pharma, known as patient access schemes.

The UK government has no plans to make these public, however, and NICE has never released discount details to the media. The rate cut here is believed to be around 10%, but this has never been officially confirmed.

Pulling out of Germany

Releasing the discounts will make Germany even less popular with pharma after the introduction in 2011 of the AMNOG law, which seeks to cut the overall drugs bills by several billion euros by enforcing tougher cost assessments on new drugs.

This has already seen a number of firms such as Lilly and Boehringer Ingelheim pull their medicines from the market for fear it would not be given a fair price.

Some senior executives believe the risk to their firms is too great so they may increasingly avoid Germany when bringing new drugs to market, rather than letting the German price become the norm elsewhere.

The change was approved by a majority of the parliamentary health committee on 12 February. Parliament is scheduled to vote this Thursday (20 February) on the proposal, which would become law by 1 April.

Ben Adams 

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