Tag: reimbursement

Food for Thought: Innovation on Trial

Germany’s new Law on the Reorganization of the Pharmaceutical Market (AMNOG), which came into force January 1 this year, has substantially changed the rules for the introduction of new medicines on the German market. The akampioneer already has reported on the novel regulations and procedures – now it is time to look at the consequences AMNOG has had already.

Since the beginning of 2011, 18 dossiers for the required benefit assessment have been filed with the Federal Joint Committee G-BA, the highest decision-making body of the joint self-government of physicians, dentists, hospitals and health insurance funds in Germany. G-BA is then assessing the “additional patient-related benefit” of a novel drug, either itself or by assigning Germany’s Institute for Quality and Efficacy in Health Care (IQWiG). If G-BA identifies an additional benefit, the umbrella organization for the statutory health insurance funds and the pharmaceutical company negotiate the reimbursement price as a discount on the original selling price within six months. If negotiations fail to reach an agreement, an arbitration commission defines the reimbursement price using the European price level as a standard.

Most cases are still pending. In one of the 18 cases (the statin pitavastatin marketed by Merckle Recordati in Germany) , the manufacturer itself requested the drug to become reimbursed under the fixed price system. In two cases, marketing was halted in Germany by the manufacturer following a negative G-BA assessment: Boehringer Ingelheim and Eli Lilly decided not to market linagliptin, a DPP4 inhibitor for the treatment of type II diabetes; the companies think G-BA chose the wrong therapy for comparison and assessment of the additional benefit.

Novartis removed Rasilamlo from the market, effective September 1. The oral drug is a combination of aliskiren and amlodipine, which was approved in April this year for the treatment of high blood pressure patients not adequately controlled by either aliskiren or amlodipine alone. The company could not get to terms with G-BA on the data required for the assessment of the additional patient-related benefit.

The decision not to market a drug in Germany if the assessment is negative and the setting of a low price is imminent certainly reduces sales; on the other hand it prevents the setting of a lower price in other European countries that use Germany’s drug prices as reference.

The first completed assessment regards AstraZeneca’s platelet aggregation inhibitor ticagrelor, which was approved in December 2010 for the prevention of thrombotic events in patients with acute coronary syndrome or myocardial infarction with ST elevation, and is intended to be used in combination with acetyl salicylic acid (ASS). G-BA had assigned IQWiG with an assessment that deviated from the design of the studies used for approval and from the comparator therapy G-BA originally had agreed upon with the manufacturer. For approval, the drug had been compared to clopidogrel (plus ASS). IQWiG, however, defined subgroups and compared ticagrelor plus ASS with clopidogrel plus ASS in patients with unstable angina pectoris and myocardial infarction (with and without ST elevation) and prasugrel plus ASS as a comparator for patients with ST elevation, which had received a coronary bypass or a percutaneous coronary intervention (PCI) .

As a result, G-BA ruled that the drug has an additional benefit only in patients with myocardial infarction without ST elevation and in patients with unstable angina pectoris. In these cases, G-BA sees a moderate additional benefit. IQWiG had stated that the data provided by the manufacturer to support efficacy in patients with ST elevation did not sufficiently prove additional benefit in this subgroup.

While it certainly is a good idea to ask whether a novel drug not only meets regulatory requirements but also translates into patient benefit, the process of assessing this benefit and the degree of improvement as compared to existing therapies is a mess in Germany.

One important point is transparency. The crucial selection of the comparative therapy for the assessment takes place behind closed doors in G-BA’s pharmaceutical subcommittee. G-BA does not  even disclose the subcommittee’s members – however, it is known that the members are picked from the National Association of Statutory Health Insurance Physicians and from the Statutory Healthcare System. The cheaper the comparative therapy chosen, the bigger is the hurdle to meet the cost/benefit ratio.

Second, as compared to the NICE procedure in the UK as an example, manufacturers are not involved in the process once it has started (except that they may be asked to submit more data), and  if they are not happy with a decision the only possible procedural intervention is taking G-BA to court. Otherwise, they may wait for a year after which they can file an application for submitting novel data – which may be granted by G-BA or not.

Third, it is often very difficult to prove an additional benefit of an innovative medication immediately – except maybe for an antibiotic. Therapies for chronic diseases lead to measurable improvements often in the long or medium run only, and regulatory studies often are not large or long enough to meet the strict “evidence-based” criteria of IQWiG and G-BA. In addition, elderly patients often suffer from multiple diseases, making an assessment even more difficult.

Last not least, for the reference price system the devil is in the details. Will all European countries, including the poor economies of the former communist countries in Southeastern Europe, be included – or only the richer economies of the old European heartland?

All in all, the new regulations already have led to a slowing-down of novel drugs reaching the German market – a development that IQWiG’s new director Juergen Windeler in a recent interview declared as “expected”. He might as well have said “welcomed” as he added that of the about 60,000 drugs on the market in Germany, 95% were dispensable: “Experience shows that good medical care is possible with 2,000 to 3,000 drugs only.”

Food for Thought: IQWiG Says Benefit Of Ezetimibe Not Proven

Various studies have demonstrated that lowering cholesterol levels with statins is preventing heart attacks and other cardiovascular complications. However, some patients do not tolerate statins or do not achieve recommended cholesterol levels with statins alone. These patients often are prescribed ezetimibe (sold as Ezetrol by MSD Sharp & Dohme in Germany), an oral cholesterol-absorption inhibitor, either alone or in combination with statins. A fixed combination of ezetimibe with statin simvastatin is sold as Inegy.

Last year, Germany’s Federal Joint Committee (G-BA) which is deciding about drug reimbursements for the country’s statutory healthcare system, commissioned Germany’s cost-benefit watchdog IQWiG to assess the benefit of ezetimibe either alone or as combination therapy.

IQWiG published its report earlier this month. While it not disputes that ezetimibe is lowering cholesterol levels, the institute states in its report that it has been unable to identify any review or study demonstrating that the prescription of ezetimibe alone or in combination does provide patient-related benefits in terms of reducing “all-cause” or “vascular” mortality.

However, new data and findings supporting the benefit of ezetimibe will be available soon.  Pulse Magazine, a leading medical weekly in the UK, reported Sept. 2 that researchers looked into the effectiveness of ezetimibe in combination with statins on all-cause mortality over a period of 4.3 years. They concluded that the combination treatment – if used after a myocardial infarction – resulted in a 55% decrease in all-cause mortality compared to patients taking simvastatin alone. The trial was a retrospective study on a cohort of nearly 15,000 patients from the UK’s General Practice Research Database. The researchers already had announced a presentation of the results at the European Society of Cardiology Congress in Paris end of August, but cancelled the presentation to perform a more complex analysis of the data.

Food for Thought: In the Health Care Sector, Who Should Choose Which Treatment Is Best?

The healthcare sector is under scrutiny in major developed countries across the globe. Some nations, like the UK and Germany, have already developed strict guidelines to determine the effectiveness of therapeutics and medical technologies, which must undergo comprehensive cost-benefit analyses as a pre-requisite for reimbursement. You can read more information about European regulations, especially German efforts, in our previous articles about the German Drug Reimbursemend Law AMNOG.

While cost-cutting is not as important in the U.S. healthcare system (yet), the emphasis on so-called comparative effectiveness research (CER), which is to assess the most effective treatment options for a patient,  has become undisputed.

An article in Knowledge@Wharton examines the pros and cons of CER efforts worldwide, stating that  “while not specifically designed to address health care costs, CER could ultimately lead to changes in the ways people seek medical treatment, the development of innovative remedies and other trends within the industry that could impact costs.”

Wharton healthcare management professor Scott E. Harrington takes an even more critical view: “The fear is that significant government involvement in CER will give rise to some form of restrictions on access to care [or to] particular treatments based on research studies and bureaucratic decision-making,” he says. “It might not be tied to what people want to have and what they are willing to pay for.”

On the other hand, if properly applied in both the state-funded and private healthcare sector, CER may incentivize biopharmaceutical and medical device companies to invest even more money into first-in-class or best-in-class innovative treatments by granting special patent protection and market access.

Knowledge @Wharton: In the Health Care Sector, Who Should Choose Which Treatment Is Best?, March 2011

Update: Germany’s New Drug Reimbursement Law

Germany is about to introduce a new law regulating the reimbursement of drugs within the country’s statutory health care system, and after intense political debates during the second half of 2010, the amended bill (it has the bulky title of “Gesetz zur Neuordnung des Arzneimittelmarktes in der gesetzlichen Krankenversicherung”  – Arzneimittelmarktneuordnungsgesetz – AMNOG) will become effective January 1, 2011. In essence, it puts an end to the free pricing of innovative drugs and expands the reference price system with fixed prices to all drugs regarded as “me-toos”. The law will have consequences for generic producers and drugs already on the market as well, but for biotech companies developing innovative drugs the main challenges are as follows:


Starting next year, companies introducing novel drugs to the German market will have to provide to the statutory health care system a cost-benefit dossier (“value dossier”) parallel to the market introduction, if they want to obtain reimbursement of the full price for the first year. For the dossier, the law requires them to coordinate with the decision-making body G-BA (Gemeinsamer Bundesausschuss) and Germany’s IQWiG, the Institute for Quality and Efficiency in Health Care. IQWiG examines the advantages and disadvantages of medical services for patients on behalf of G-BA and the Federal Ministry of Health (or on its own initiative).

But how to prove the benefit of a new drug? Since its inception, IQWiG is focusing on evidence-based medicine. Therefore, it will not be enough to demonstrate safety and efficacy. Instead, the focus is on evidence in terms of patient-relevant endpoints, i.e. morbidity, mortality, and quality of life. The law will require the company to provide a wealth of information: does its compound have additional benefits as compared to existing treatment strategies? Is there an alternative for treatment? Which patient (sub)groups will benefit in particular?  Are there special requirements for the treatment? How much will the annual treatment costs amount to? These and many more questions will have to be addressed in the value dossier.

The cost-benefit dossier will then be evaluated by G-BA and/or IQWiG to decide whether the new drug provides additional benefit for patients as compared to existing treatments or not, or whether the new medicine is a “soloist” without any competition.


If the assessment comes to the conclusion that there is no proof of additional benefit (or if the company does not submit a value dossier in time), the drug will become subject to Germany’s reference price system. This system sets a price as the interval between the cheapest and the most expensive drug in the particular therapeutic group. If the drug is assessed as providing additional benefit to the patients, the drug maker has to negotiate a rebate on the original price, and this reduced price will be reimbursed after the first year of market introduction. The bill states that negotiations will have to consider international reference prices. There will be a board of arbitration to settle disputes on pricing.

Orphan drugs

As always, the devil is in the details, and procedure and requirements will be outlined only by January 31, 2011. One important point for many biotechs is orphan drugs. The first draft of the bill did not mention them so that they, too, would have been subject to cost-benefit analysis – although they are, by definition, “soloists” as orphan designation is only granted if there is a huge unmet medical need. G-BA stated in an official written comment about the bill dated September 22, 2010, that it opposed any exemptions for orphan drugs. It states that these drugs are granted orphan status solely based on the rareness of a disease, not on missing therapeutic options. “Therefore, approval as ‘orphan drug’ is often granted solely based on surrogate parameters without any reference to patient-relevant benefit,” it states. As examples for orphan drugs without any benefit in terms of patient survival the document mentions Nexavar sorafenib for renal cell carcinoma as well as Volibris ambrisentan, Tracleer bosentan, inhalable Ventavis iloprost, Revatio sildenafil and Thelin sitaxentan for pulmonary hypertension.

In response, BIO Deutschland, the German biotech industry organization  pointed out that orphan drug status in the EU is only granted if, among others, there is “no satisfactory method of diagnosis, prevention or treatment of the condition concerned … authorised, or, if such method exists, the medicinal product will be of significant benefit to those affected by the condition.” BIO Deutschland therefore proposed to except orphan drugs from additional, national benefit appraisals.

The German parliament now decided to except orphan drugs from an additional benefit analysis, provided they do not exceed sales of EUR50 million per year within Germany’s statutory health care system. According to BIO Deutschland, this figure equates to about EUR33 million in net sales.

Impact on clinical trials?

The main question for the design of future clinical trials will be how to demonstrate not only safety and efficacy, but also additional benefit as compared to existing treatments. Evidence-based medicine heavily relies on the evaluation of  long-term patient outcome and comparison studies – but how can a company provide these data at the date of approval? The bill vaguely raises the possibility that G-BA and/or IQWiG may demand additional studies.

The new legislation will also oblige companies to disclose to the authorities the results of all confirmatory clinical trials conducted with the drug, six months after approval at the latest. Publishing can be done in the internet or via linking to a publication, either in German or English language. Publications need to follow GCP-rules and will have to list all results as well as all changes in the study plan, halts, or abortion of trials. In the first draft of the bill it was demanded that companies publish these results.


As a result of the new law, companies will have to make sure that they can start marketing their products as soon as they obtain approval in Germany in order to generate high revenue in the first 12 months of commercialization, when they are still free to set the price. After one year, the price will be capped, regardless of whether the drug is assessed as providing additional benefit to patients or not – the only difference is how much the price will be reduced. On a broader scale, the law will not only reduce the prices for innovative drugs in Germany, as Germany today is a reference country for most European states and therefore first-choice market for many biopharmaceutical companies introducing new drugs.