International Bio News: Germany's New Law May Impede New Drug Launches




Since its introduction in January of 2011, the restructuring of the German pricing and reimbursement system - AMNOG - has brought significant challenges for pharmaceutical companies interested in participating in the German market. This new German law is expected to favor innovative drug makers,  placing more emphasis on evidence-based medicine. According to the new regulations, once a drug reaches the German market, the manufacturer must demonstrate that it is an improvement on existing treatments. A committee working on behalf of the German health care system will then be expected to assess the evidence and decide on the price accordingly:  If the drug offers no improvement it becomes subject to the fixed price regime. If it provides additional benefits, insurers and the manufacturer will negotiate a price. 

This has already led to deterring the release of new drugs into the German market. In the beginning of September, two newly approved drugs were kept from the market as a result of these pricing disincentives. The German company Boehringer Ingelheim and its U.S. partner Eli Lilly recently decided not to launch their new type 2 diabetes drug, Trajenta (linagliptin) in Germany due to the new pricing system. In initial discussions prior to market release, the Federal Joint Committee(G-BA) indicated that Trajenta would not be compared to other gliptins as expected but rather to a generic diabetes drug, in which case it would have to be priced accordingly (press release September 5, 2011)

On September 9, Swiss-based Novartis pulled their new high blood pressure therapeutic, Rasilamlo, from the German market because the company was unable to provide sufficient data for their drug - required as part of the new pricing process. This has created sufficient concern that the new law will be a serious disincentive for approved innovative drugs to be released on the German market. The German Association of Research-Based Pharmaceutical Companies (VFA) has called for fairer pricing rules, but they will most likely be unable to convince the government to revert back to the previous system.

 

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Comments

  • 10/5/2011 1:59 PM Jacquie Mardell wrote:
    Thank you for this very interesting post! How likely do you think it is that we will see other EU governments following the Germans' lead on this? Are we seeing the beginning of a trend? We know there is no danger of the US following suit as long as the market controls pricing here.

    Excellent blog! I have added it to my blogroll at my own site, 2decades.blogspot.com.
    Reply to this
    1. 11/8/2011 3:54 PM Karen Politis Virk wrote:
      Thank you for your comment. It is possible that other EU governments may follow Germany's example. We will have to wait and see. I agree that the U.S. is unlikely to go along with this type of restriction.
      Reply to this
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