German Scoreboard: Payers 1, Pharma 1

AstraZeneca and other biopharmas wait with bated breath for the first drug price tags to emerge from Germany’s new early added-benefit assessment process. So who’s winning as this hastily-introduced system undergoes its final tweaks? For now, we think it’s 1-1,  payers and pharma.

But that score could soon change.

Industry has lost out on reference pricing: if negotiations between sponsors and the sick funds association hit the wall (as several are expected to do, especially in the early days), then an arbitration committee will refer to a European reference price made up of prices from a list of 15 European countries, including beleaguered and bankrupted Greece.  Calls for the basket to include a far shorter list of wealthier and healthier economies — as is applied, for instance, to vaccines prices — were ignored.

But orphan drug sponsors will be reassured that Germany’s reimbursement authority the G-BA has declared that these niche drugs will only undergo benefit assessments only if and when they hit the E50 million sales threshold. That follows the snafu around InterMune’s IPF treatment Esbriet — the system’s guinea-pig orphan — which HTA body IQWiG declared to be of little or no added-benefit once side-effects were taken into consideration.  G-BA had to paper over this high-profile decision (which sent the company’s US-listed shares tumbling) given that orphans are legally assumed to have some added-benefit by virtue of  being approved.  Esbriet’s final price may still suffer from its IQWiG treatment (even if that was essentially declared to be unfair), but at least those of future orphan candidates won’t.

The most important tweak to AMNOG as far as industry’s concerned is around transparency: whether or not final negotiated rebates (thus, actual prices) are published. As the law stands, they will be — a disaster for companies’ European and even global pricing strategies, given Germany’s central position as a reference price source.

There’s still  a chance this may change; either way, it will determine the final score in what, tweaks or no tweaks, remains a payers’ game.

 image thanks to flickrer zenia used under creative commons