German pharma price reform sees rebate reduction

The new German coalition government has decided to partially revoke the AMNOG (Act on the Reform of the Market for Medical Products), pharmaceutical pricing legislation that was introduced in December 2010.

The Act aimed to limit the cost of pharmaceuticals, which had risen considerably in previous years (particularly in the market segment which was previously exempt from reference prices). The Act obliged pharmaceutical companies to subject their new products to an early evaluation of their additional benefit by the Federal Joint Committee (G-BA) after being launched on the market.

This significantly changed the way the country approached drug pricing policy. This meant that the Institut fur Qualitat und Wirtschaftlichkeit im Gesundheitswesen (IQWiG), which comes under the control of the G-BA, the principal authority for German health care, could balance the costs of drug therapies against the benefit previously determined, on similar lines as the UK’s Institute for Health and Care Excellence (NICE). IQWiG reviews have been a significant problem for many pharmaceutical companies, whose products have failed to achieve “added benefit” designation by the agency.