University of
Bielefeld
School of Public Health
Health Economics and Health Care Management
Germany’s drug pricing after AMNOG
– What comes next?
Wolfgang Greiner
7th American & German Healthcare Forum
Minneapolis, June 21st, 2011
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MSc 37
AMNOG as a major progress in German drug regulation
• Begin of value based pricing for innovative
drugs with price negotiations
Î end of free pricing
• Explicit option to make individual contracts
between sickness funds and pharmaceutical
companies
• Introduction of (possible) conditional
reimbursement by G-BA
• Consulting of manufacturer by G-BA
University of Bielefeld
Health Economics and Health Care Management
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Benefit as the basis for reimbursement decision
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Health Economics and Health Care Management
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But … still a number of shortcomings in German legislation
• Price setting without formal cost-benefit
analysis
• Individual contracts remain the exception
• Benefit assessment mainly on the basis
of RCTs
University of Bielefeld
Health Economics and Health Care Management
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Agenda
1. Background
2. Assessment of cost and benefits
3. Real world data
4. Options to improve current drug pricing
legislation in Germany
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Health Economics and Health Care Management
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Some prerequisites for the pure market model
• No relevant market power of single
players on the demand and the supply
side
• Total market transparency
• Homogeneity of goods
• Free market access and exit
• No external effects and time frictions
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Health Economics and Health Care Management
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Basic options to regulate the market price
• Value based pricing: pharmacoeconomic assessment
on the basis of cost-effectiveness, e.g. Sweden und
The Netherlands
• Cost-plus pricing: based on cost of production, R&D,
sales etc., to determine ex factory price (e.g. India,
China, Pakistan)
• Indirect price control (profit control), e.g. UK
• External price referencing, e.g. Belgium, Italy
¾ Mixed forms very common
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Health Economics and Health Care Management
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External price referencing in Europe
Quelle: Vogler 2011
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Health Economics and Health Care Management
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Major points of discussion about CBA methods in Germany
• Efficiency frontier analysis as an alternative to
classical CEA with threshold
• Societal perspective of analysis
• Separated Assessment of cost and benefits
• No additional benefit assessment by modeling
• Assessment across therapeutic areas /
use of QALYs
Î Time for a new start ?
University of Bielefeld
Health Economics and Health Care Management
Folie 9
Agenda
1. Background
2. Assessment of cost and benefits
3. Real world data
4. Options to improve current drug pricing
legislation in Germany
University of Bielefeld
Health Economics and Health Care Management
Folie 10
Limitations of RCTs: The five “toos”
• Too few
– Appr. 2,000 patients in Phase III
• Too simple
– Lack of co-morbidities
– Lack of co-medication
• Too median-aged
– No children
– No very old patients
• Too narrow
– Exactly defined indication
• Too brief
– Short treatment period
Rogers AS, In: Pharmacoepidemiology: An Introduction. Cincinnati, 1991.
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Health Economics and Health Care Management
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Inclusion criteria in RCTs
Proportion of patients meeting the inclusion criteria
in four different RCTs for the treatment of osteporosis.
Included
Not included
Dowd R et al. Osteoporos Int. 2000;11:533-536.
University of Bielefeld
Health Economics and Health Care Management
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Different benefits at different time points?
Effectiveness
Efficiency
Efficacy
Homogeneous
patient groups
Inhomogeneous
patient groups
$$$$$
„Does it work?"
BLACK BOX
„Is it benefitial?"
University of Bielefeld
Health Economics and Health Care Management
?
„How about the cost
benefit ratio?"
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Development of data or pieces of the value story
Start
Real Life
Data
premarket
Epi/management
/Cost of illness/
cost of events/
Clinical
Trials
Cost-effectiveness
& budget impact
Model
Launch
Real Life
Data
post
market
Comparative
real life data
Updating/
validating
models
Long term
Effectiveness and
safety
Noe L, 2006, ISPOR Connections
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Health Economics and Health Care Management
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Data Sources
– Clinical trials
• Atypical setting, sample size, duration
– Observational studies
• Potential selection bias, missing values
– Pragmatic trials
• High costs, sample size, duration
– Epidemiological studies
• Selective cohorts, different objective, missing data,
time factor
– Data bases (e.g. claims data)
• Uncertain (missing) diagnoses, miscoding,
incomplete data, missing data
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Health Economics and Health Care Management
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Thanks for your attention
•
•
•
•
•
A pure market based allocation
and price setting is not possible
for solitaire drugs.
The assessment should be valuebased.
Real world data should gain more
importance.
CBA is necessary for the
preparation of centralized price
negotiations.
Methods used for this official cost
and benefit assessment should be
monitored scientifically and
externally.
Contact:
Prof. Dr. Wolfgang Greiner
University of Bielefeld
School of Public Health
Health Economics and
Health Care Management (AG5)
P.O. Box 10 01 31
D-33501 Bielefeld / Germany
Tel.: 49 (0) 521 | 106 6989
Mail: wolfgang.greiner@uni-bielefeld.de
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Health Economics and Health Care Management
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International price comparisons
Which price should be compared?
•
Ex factory price
•
Price of gross dealers
•
Price ex pharmacy
•
Price after discount
University of Bielefeld
Health Economics and Health Care Management
Î Reimports as alternatives?
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Why an incremental approach?
• Consistent decision making for a given increase in
benefits
• Existing price structures of older alternatives should
not determine future decisions
• Inverse incentives for clinical research
¾ Incremental approach as an international health
economic standard.
¾ Efficiency frontier as an additional tool to
describe the current market.
University of Bielefeld
Health Economics and Health Care Management
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Critical comments about thresholds in Germany
• No incentive to expensive R&D
• Trend to me-too research
• No incentive to R&D for orphan diseases
• No differentiation for patient characteristics or number
of treatment alternatives
¾ All these points of discussion assume a fixed,
absolute threshold for the ICER
(which nobody in Germany has ever suggested)
University of Bielefeld
Health Economics and Health Care Management
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Directions for future price regulation in Germany
¾ General remarks:
•
•
•
•
Cost-benefit assessments on the basis of RCTs at market
access of the drugs
Reimbursement decision for 3-5 years,
since then real world data collection
Discussion about willingness-to-pay of the society
Discussion about other criteria (social value of an
innovation)
¾ Technical improvements:
•
•
Utility, social perspective and efficiency frontier just as
additional information to the decision makers
Expert council to assess and improve the official methods
for CBA at ministry of health
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Health Economics and Health Care Management
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“Social value” of treatment option
Source: Drummond et al. (2007), p. 39
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Health Economics and Health Care Management
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