School of Public Health Health Economics and Health Care Management University of Bielefeld Bielefeld (Germany), September 29th, 2015 Prof. Dr. Wolfgang Greiner Value-based drug reimbursement: Introduction to the main features of the German pharmaceutical policy Webinar for IADB

Universität Bielefeld Folie 2 Gesundheitsökonomie und Gesundheitsmanagement Country cluster by drug prices and economic power Source: mod. Nach Shankar

Universität Bielefeld Folie 3 Gesundheitsökonomie und Gesundheitsmanagement Development of expenses for drugs per capita (in US-$-PPPs) (Source: OECD 2014) German Pharmaceutical Market in International Comparison Germany OECD average year Expenses per capita in US-$-PPP

Universität Bielefeld Folie 4 Gesundheitsökonomie und Gesundheitsmanagement Concepts of regulating prices and reimbursement

Universität Bielefeld Folie 5 Gesundheitsökonomie und Gesundheitsmanagement Main Regulation Instruments for the Pharmaceutical Sector in Germany Regulation on industry level:  Central benefit assessment and pricing of innovative drugs (AMNOG)  Price moratorium  Obligatory discounts for sickness funds  Public tenders for generics  Reference prices for (mainly) generic drugs Regulation on physician level:  Drugs budgets (regional and individual)  Effciency audit  Target agreements with physicians‘ associations  Negative list Regulation on pharmacy level:  Prohibition on discounts for pharmacies  Aut-idem regulation Regulation on patient level:  Co-payments (10 %, max. 10 €)  No co-payment for discounted generics

Universität Bielefeld Folie 6 Gesundheitsökonomie und Gesundheitsmanagement What is meant by „reference pricing“? Maximum level of reimbursement Refers to a group of drugs If the price exceeds the fixed level, patients have to pay the difference out of pocket. Reference price = 6

Universität Bielefeld Folie 7 Gesundheitsökonomie und Gesundheitsmanagement Internal Reference Price Groups ABC Additional out of pocket payment One possibility: lowering price of C to the RP level Price Included pharmaceuticals Potential for A to raise! the price to the RP level RP 7

Universität Bielefeld Folie 8 Gesundheitsökonomie und Gesundheitsmanagement German benefit evaluation and remuneration process according to AMNOG Source: German Advisory Council on the Assessment of Developments in der Health Care System (2014)

Universität Bielefeld Folie 9 Gesundheitsökonomie und Gesundheitsmanagement Additional Benefits Categories according to AMNOG  Significant additional benefit: Healing, significant prolongation of life time, long-term absence of severe symptoms or avoidance of severe adverse events  Considerable additional benefit: Dilution of severe symptoms, moderate prolongation of life time, for patients noticeable relief of illness  Marginal additional benefit: Reduction of not severe symptoms of illness  Not quantifiable additional benefit  No additional benefit: benefit smaller than the comparison therapy  Influence on pricing not yet known

Universität Bielefeld Folie 10 Gesundheitsökonomie und Gesundheitsmanagement Price is negotiated and set on the basis of three factors : 1.Magnitude of additional benefit 2.Price of appropriate comparison treatment 3.Average European price  Unfortunately not on the basis of: cost-effectiveness

Universität Bielefeld Folie 11 Gesundheitsökonomie und Gesundheitsmanagement Experiences with AMNOG: Additional Benefit c) Con- siderable Signifi- cant Mode- rate Not quatifiable No additio. benefit Lower benefit With additional benefit Without additional benefit Additional benefit by molecul Additional benefit by sub group Additional benefit by proportion in patient population

Universität Bielefeld Folie 12 Gesundheitsökonomie und Gesundheitsmanagement Challenges in the AMNOG process  Bypass of benefit assessment  Choice of appropriate comparison treatment  Quality of life  Inclusion of Companion Diagnostics in benefit assessment  Pricing on the basis of sub groups  Temporary free pricing in the first year after launch  No cost-benefit analysis  Benefit assessment of drugs which were launched before AMNOG  Routinely „late“ benefit assessment

Universität Bielefeld Folie 13 Gesundheitsökonomie und Gesundheitsmanagement Experiences with AMNOG: Quality of Life N (%) Dossiers with data about quality of life45 (78.9 %) Dossiers with disease specific instrument40 (88.9 %) Dossiers with generic instrument35 (77.8 %) Additional benefit according to manufacturer23 (51.1 %) Additional benefit according to G-BA2 (4.4 %) IndicationIncluded studiesStudies with information about quality of life (%) Asthma279 (33 %) Dementia334 (12 %) Depression12933 (26 %) Diabetes9822 (22 %) Other270 ∑31468 (22 %) Data about quality of life in benefit assessment of IQWiG till 2009 (Source: Wieseler 2014) Wieseler B (2014): Nutzenbewertung gemäß AMNOG – Erkenntnisse zum Zusatznutzen bei Markteintritt. Expertenforum AMNOG vom , Berlin. AMNOG Dossiers with information about quality of life

Universität Bielefeld Folie 14 Gesundheitsökonomie und Gesundheitsmanagement Experiences with AMNOG: Comparator Proportion of comparators in AMNOG assessments (n=75, per: ) Generic comparator Generic and patent protected comparators Patent protected comparator

Universität Bielefeld Folie 15 Gesundheitsökonomie und Gesundheitsmanagement Reimbursement status of all compounds which have been assessed till end of 2014 (n=83). per: Experiences with AMNOG: Market exit („Opt-Out“) Price was successfully negotiated Price has been fixed by arbitration board Reference price group Opt-out

Universität Bielefeld Folie 16 Gesundheitsökonomie und Gesundheitsmanagement Influence of additional benefit on prescription behaviour No additional benefit Not quantifiable moderate considerable Increase of prescribed volume (DDD) in %

Universität Bielefeld Folie 17 Gesundheitsökonomie und Gesundheitsmanagement Summary of experiences with value based pricing in Gernany  Price regulation for generics and innovative drugs with additional benefit has be very differently.  Value Based pricing should not only be seen as cost containment instrument, but to improve quality of patient care.  Increase of data quality in studies  Savings and prescription behaviour modifications rather small until now.  „Learning system“: A lot of discussions about methods are still going on.  Especially: choice of comparator, integration of quality of life values, introduction of cost-benefit-analysis Thanks for your attention. Prof. Dr. Wolfgang Greiner University of Bielefeld School of Public Health Health Economics and Health Care Management Bielefeld / Germany