Germany’s Federal Ministry of Health has published its evaluation report on the impact of the GKV Financial Stabilization Act on access to medicines in Germany, and on the operating conditions of the pharmaceutical industry in the country and the wider EU. It concluded that it was too early to posit any links between the GKV-FinStG and a worsening of access to medicines, or a deterioration on the operating conditions of pharmaceutical companies.

On January 2, Germany’s Federal Ministry of Health (FMoH) published its report on the impact of the GKV Financial Stabilization Act (GKV-Finanzstabilisierungsgesetz, GKV-FinStG) on access to medicines in Germany, and on the market environment for the pharmaceutical industry in Germany and the EU. The GKV-FinStG came into force on November 12, 2022, and it included—amid a series of short-term measures intended to plug the gaps in the finances of the statutory health insurance (Gesetzliche Krankenversicherung, GKV) funds in 2023—the most significant series of changes to the system of benefit assessments and price negotiations introduced with the Pharmaceutical Market Restructuring Act (Arzneimittelmarkt Neuordnungsgesetz, AMNOG) since it was brought into effect in 2011. From the reduction of the free-pricing period for medicines undergoing AMNOG evaluations from 12 to six months, to the introduction of mandatory volume-based discounts and mandatory discounts on free combination therapies, the provisions of the GKV-FinStG were expected by many inside and outside the pharmaceutical industry to lead to a significant worsening in the operating conditions for research-based pharmaceutical companies, and to new limitations in German patients’ access to new originator therapies.

Leaks of the FMoH’s evaluation report published in November 2023 already indicated that the FMoH did not see any deterioration in access to medicines or to the production capabilities of pharmaceutical companies in Germany. The official published evaluation report merely confirmed these conclusions.

FMoH refutes claims of GKV-FinStG putting manufacturers off German market launch

The FMoH pointed to the European Federation of Pharmaceutical Industries and Associations’s (EFPIA) Waiting to Access Innovative Therapies (WAIT) indicator survey from 2022 – with a data cut-off date of January 5, 2023—as evidence that Germany had the best access to newly authorised medicines of any country in the EU. It conceded, however, that the crossover between the survey and the GKV-FinStG was only around 1.5 months.

Furthermore, it presented data on market withdrawals from the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) showing that the number of withdrawals and opt-outs (decisions to withdraw from an AMNOG procedure after a benefit assessment decision, and before price negotiations) were similar in 2023 to the numbers seen in previous years. It refuted the findings of a survey by the Association of Research-based Pharmaceutical Companies (Verband der forschenden Pharma-Unternehmen, VFA), published in September 2023, which found that around 30 new originator medicines might not be launched in Germany over the following two-year period due to the GKV-FinStG. The FMoH stated that the VFA’s findings were based only on “expectations,” although it conceded that the impact of German prices on prices in other countries through international reference pricing (IRP) “could have an indirect effect on market access.” It concluded, however, that it was too early to say whether the GKV-FinStG had had a negative effect on the launch of new originator medicines in Germany.

Looking at the economic impact of the AMNOG-related measures in the GKV-FinStG, the FMoH included a table in its evaluation report with estimates of the actual savings resulting from the individual measures in the GKV-FinStG in 2023, alongside the amount of savings they were expected to have on an annual basis. The total annual pharma-related savings expected as per the text of the GKV-FinStG were between €1.79bn ($1.95bn) and €1.99bn ($2.17bn); the actual savings in 2023, as estimated by the FMoH, were around €1.38bn ($1.50bn). The vast majority of this, €1.3bn ($1.4bn), came from the one-year increase in the mandatory discount on non-reference-priced medicines from 5% to 12%. The 20% mandatory discount on free combinations yielded no savings at all, and neither did the reduction of the orphan-drug financial threshold from €50m ($54m) to €30m ($32m). Of the permanent AMNOG changes, only the reduction in the free-pricing period (and the retroactive application of negotiated discounts from the seventh month after market launch) yielded any substantial savings—€72m ($78m), as estimated by the FMoH.

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Industry and GKV yet to reach agreement on 20% mandatory discount on free combination therapies

In its evaluation report, the FMoH noted that the pharmaceutical industry and the GKV-Spitzenverband had not yet reached an agreement on the details of the implementation of the 20% mandatory discount on free combination therapies. As per the GKV-FinStG, such an agreement was due to be reached by the end of October 2023. The act foresees, furthermore, that failing such an agreement by that date, the FMoH would take over the responsibility for deciding on implementing regulations. There have been plenty of warnings about the complexities involved with introducing this mandatory discount, such as defining the difference between free combination therapy and sequential therapy. The Federal Joint Committee (Gemeinsamer Bundesausschuss, G-BA) reworked its guidelines for the free combination therapy discount several times, and in the most recent guidelines published in October 2023, the definition of free combination therapies is much narrower. It remains to be seen how the FMoH will approach the task of implementing the regulations required for administering the discounts. As it stated in the evaluation report, “currently, there are still legal uncertainties regarding the implementation of this measure.”

FMoH considers negotiated volume-based discounts as too low

Another interesting development around the implementation of the measures in the GKV-FinStG noted by the FMoH in its evaluation report relates to the implementation of mandatory volume-based discounts. Volume-based discounts were previously a voluntary add-on to price negotiations under the AMNOG system, but with the GKV-FinStG, they became mandatory. The GKV-FinStG requires manufacturers and the GKV-Spitzenverband to make contractual provisions insuring against unforeseen increases in the sales of drugs with new active ingredients, such as approvals in new indications; up to the end of 2023, a total of 32 price-volume agreements had been concluded during price negotiations, although none had yet been activated. The FMoH noted that the AMNOG arbitration board had developed a fixed price-quantity model that had significantly influenced the operationalization of the mandatory volume-based discounts. As noted by the FMoH, the volume-based discounts agreed on up to the drafting of the evaluation report, for which information has become available, are in the low-single-digit range, “contrary to the assumptions of the legislator.” Clearly, the implementation of the volume-based discounts is not progressing to the FMoH’s liking.

GKV-FinStG has had a negative impact on pharma industry expectations, concedes FMoH

Summing up its evaluation report, the FMoH maintained its line that there was insufficient evidence of a link between the GKV-FinStG and a worsening of access to new medicines in Germany, or a worsening of the operating conditions of pharmaceutical companies. It stated that it was too early to make such judgements, although it conceded that the GKV-FinStG had worsened the expectations of the pharmaceutical industry, and had had a negative impact on the investment climate. Consequently, it has been decided that an external evaluation report on the impact of the GKV-FinStG will be prepared during 2024, with the participation of all stakeholders.

Any major concessions to the concerns of the industry from the FMoH were always going to be unlikely, and in places, the evaluation report is somewhat skewed in favor of a more positive picture of the situation. However, the FMoH does recognize the deterioration in the industry’s own perception of its outlook in Germany. The German government is concurrently planning the implementation of a package of pro-pharma industry measures aimed at improving operating conditions and incentivizing companies to invest in Germany, or to maintain their existing investments in the country, amid various reports of German pharma companies choosing to invest in other markets, such as the UK and US. Thus, it is aware that the views of the industry matter, not only because it supplies the country with medicines, but also because of its importance to the national economy. The 2024 evaluation report is likely to give a more accurate and thorough picture of the impact of the GKV-FinStG, although as shown in the 2023 evaluation report, there remain many disputed and unanswered questions about the implementation of the AMNOG-related measures, which may or may not be resolved in the coming year.

This article is produced as part of GlobalData’s Price Intelligence (POLI) service, the world’s leading resource for global pharmaceutical pricing, HTA and market access intelligence integrated with the broader epidemiology, disease, clinical trials and manufacturing expertise of GlobalData’s Pharmaceutical Intelligence Center. Our unparalleled team of in-house experts monitor P&R policy developments, outcomes and data analytics around the world every day to give our clients the edge by providing critical early warning signals and insights. For a demo or further information, please contact us here.