The Act on the Reform of the Market for Medical Products (Arzneimittelmarkt-Neuordnungsgesetz – AMNOG) of 22 December 2010 aims to limit the cost of pharmaceuticals, which has risen considerably in recent years (particularly in the market segment which was previously exempt from reference prices). The Act hence obliges pharmaceutical companies to subject their new products to an early evaluation of their additional benefit by the Federal Joint Committee (Gemeinsamer Bundesausschuss – G-BA) after being launched on the market. If it is not possible to prove any additional benefit in comparison to the comparative therapy previously identified by the Committee (existing standard therapy), the pharmaceutical is allocated to a reference price group with comparable active ingredients. If there is no such reference price group, the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband – GKV-SV) negotiates with the pharmaceutical company on a refund rate which does not lead to higher annual therapy costs than the expedient comparative therapy. If an additional benefit is proven to exist, the National Association of Statutory Health Insurance Funds negotiates with the pharmaceutical company a supplement on top of the price of the expedient comparative therapy. This amount then applies to all persons with statutory insurance, as well as to those with private insurance. For the first time, the AMNOG seriously tackles the price monopoly of the pharmaceutical industry in Germany with this central arrangement.
The enactment of the Act on the Reform of the Market for Medical Products (AMNOG) causes an early assessment of additional benefit to be carried out for each year from 1 January 2011 onwards for eligible new pharmaceuticals launched on the German market which have new active ingredients or new combinations of active ingredients. These are new pharmaceuticals to which patent protection, specialists speak of confidentiality protection, applies. Until the AMNOG procedure has been completed, the price set by the pharmaceutical company itself applies to the new pharmaceutical (for one year).
Additionally, the Federal Joint Committee may also have an assessment carried out for pharmaceuticals which were already on the market prior to 1 January 2011 and to which confidentiality protection also applies (“established market”) in order to evaluate the additional benefits. It is decisive for an evaluation of established market products whether the pharmaceuticals are significant for statutory health insurance or are in competition with pharmaceuticals which have already been evaluated. There are many pharmaceuticals on the established market which the pharmaceutical companies are marketing as an alleged innovation. This alleged novelty however frequently only lies in a molecule variant which is not relevant to the effect of the pharmaceutical. These spurious innovations or “me too” preparations do not entail any additional benefit when it comes to patient care, but cost a great deal of money.
Legislature has excluded pharmaceuticals from the early additional benefit evaluation which are of little economic significance (less than 1 million Euro turnover/year with statutory health insurance) or pharmaceuticals which are only used in hospitals.
When it comes to pharmaceuticals for treating rare diseases (orphan drugs), Legislature intends the additional benefit to be considered proven at the time when a pharmaceutical is licensed if its turnover with statutory health insurance is less than 50 million Euro/year. If turnover is higher, the pharmaceutical companies also need to prove an additional benefit for such orphan drugs. In both cases, the Federal Joint Committee drafts a resolution forming the basis for negotiations on a refund rate between the National Association of Statutory Health Insurance Funds and the pharmaceutical company.