Managed entry on the rise in Germany—but way ahead is not straightforward

In recent months, a number of key stakeholders in the German healthcare system have commented on the possibility of making greater use of managed entry agreements (MEAs) for high-priced new drugs, such as advanced therapy medicinal products. Josef Hecken, the Chairman of the Gemeinsamer Bundesausschuss (GBA; Federal Joint Committee), has speculated that pay-for-performance deals could replace rebate negotiations for drugs that have an immature evidence base at the time of marketing authorisation.

The health insurance funds are somewhat divided regarding the potential of managed entry for innovative therapies. The GKV-Spitzenverband (National Association of Statutory Health Insurance Funds) believes that “pay-for-performance models are among the options to consider” for high-priced technologies, such as cell therapies. Andreas Storm, the Chairman of the health insurance fund DAK-Gesundheit, likewise thinks that pay-for-performance deals could be the answer for high-priced interventions such as gene therapies, CAR-T-cell therapies and one-time treatments. On the other hand, the AOK-Bundesverband (Federal Association of General Local Health Insurance Funds) warns that “new price concepts should not be regarded as a panacea because these models can often be implemented only with highly bureaucratic conditions.”

For its part, the pharmaceutical industry is generally supportive of managed entry. The Verband Forschender Arzneimittelhersteller (VFA; German Association of Research-based Pharmaceutical Companies) has expressed interest in exploring the potential of MEAs in Germany. The Bundesfachverband der Arzneimittelhersteller (BAH; Federal Association of Pharmaceutical Manufacturers) “fundamentally welcomes opportunities to promote contractual competition for optimal patient care. One option here is pay-for-performance contracts.” The Bundesverband der Pharmazeutischen Industrie (BPI; Federal Association of the Pharmaceutical Industry) is, however, more circumspect: “Pay for performance is successful only if results can be measured by their intended target, namely, a better quality of patient care. Given that there is not yet any scientific consensus regarding the measurement of quality of care, we do not see that it is applicable to the German healthcare system.”

Managed entry agreements on the increase

Germany has long trailed other European markets in its use of managed entry strategies, but interest in MEAs is now growing. In August 2018, Novartis announced its intention to explore innovative payment models—including the option of pay for performance—in Germany for its newly approved migraine prophylaxis drug, Aimovig (erenumab). To date, however, no details of any MEAs have been disclosed.

In October 2018, Merck KGaA announced a pay-for-performance agreement for Mavenclad (cladribine), a short-course oral therapy for multiple sclerosis that provides sustained disease control for up to four years with a maximum of 20 days’ treatment over two years. The deal is with GWQ ServicePlus, a contract service provider for health insurance funds that represents 76 Betriebskrankenkassen (occupational health insurance funds) with a total of 12.8 million covered lives. Under the terms of the agreement, the health insurance funds will pay considerably less for Mavenclad than for comparable MS therapies, and Merck will cover any additional costs incurred if patients do not respond adequately to the drug and have to be switched to an alternative therapy. As part of the agreement, GWQ ServicePlus is offering services to promote patient adherence, including sending reminders to physicians when patients are due to receive a follow-up prescription of Mavenclad in the second year of treatment.

In March 2019, Novartis signed a pay-for-performance agreement with GWQ ServicePlus for its CAR-T-cell therapy Kymriah (tisagenlecleucel), used in the treatment of relapsed or refractory acute lymphoblastic leukaemia in paediatric and young adult patients, and adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL). Kymriah, which has a list price of €320,000, is a one-time treatment administered exclusively in five specialised centres. The therapy is too expensive to be included within existing diagnosis-related groups, which would ordinarily require applications for exceptional reimbursement from a patient’s health insurance fund. However, the MEA should guarantee eligible patients who are enrolled with one of the occupational health insurance funds, immediate access to Kymriah. Novartis will refund part of the treatment costs if a patient dies of the indicated disease within a specified period. The deal is initially scheduled to last until September 2019, by which time Novartis should have been able to negotiate a rebate with the GKV-Spitzenverband. The company is reportedly negotiating similar MEAs with other health insurance funds.

In June 2019, Kite Pharma, a subsidiary of Gilead Sciences, announced a pay-for-performance agreement for Yescarta (axicabtagen-ciloleucel), approved for relapsed or refractory DLBCL and primary mediastinal large B-cell lymphoma. The deal is with the six Ersatzkassen (substitute funds)—DAK-Gesundheit, Barmer, Techniker Krankenkasse, KKH Kaufm?nnische Krankenkasse, Handelskrankenkasse and Hanseatische Krankenkasse—which have approximately 28 million covered lives. The list price of Yescarta is €327,000. As with the aforementioned Kymriah MEA, this agreement will partially refund treatment costs if the patient dies of the indicated disease within a specified period.

Challenges of successful pay-for-performance deals

In March 2019, the magazine Deutsches ?rzteblatt published an interview with Wolf-Dieter Ludwig, the Chairman of the influential Arzneimittelkommission der deutschen ?rzteschaft (Akd?; Drug Commission of the German Medical Association), Jutta Wendel-Schrief, Market Access Director at MSD Sharpe & Dohme, and Antje Haas, the head of the medicines and therapies department at the GKV-Spitzenverband. The interviewees offered some interesting perspectives on the outlook for managed entry in Germany.

Ludwig believes pay-for-performance deals make sense only for very expensive drugs that have limited evidence at launch on account of accelerated marketing authorisation—principally, orphan drugs, cancer therapies and biologics. He foresees difficulties with the use of pay for performance for CAR-T-cell therapies: patient populations are very heterogeneous—they have undergone a variety of previous treatments, including stem cell transplantation and chemotherapy. He suspects standardising practice for CAR-T-cell therapy may prove challenging.

Haas expressed the view that pay-for-performance deals need to include patient-relevant endpoints, not just surrogates. Wendel-Schrief responded that “this works in many cases, but not in others, because it takes too long to measure the effects. Ultimately, a contract must be fair, benefiting both the patient and the company.” She did, however, acknowledge the difficulties of determining “how P4P [pay for performance] should work for therapies whose success is more difficult to prove—for example, in chronic diseases. And where success may depend on variables that cannot be controlled.”

Looking ahead, Haas foresees a variety of MEAs, including arrangements that are based on volume, duration of therapy, patient-relevant endpoints or validated surrogates. Contracts will need to be tailored appropriately. Instalment payments may be necessary for extremely high-priced one-time therapies. The level of payments would depend on the likelihood of long-term success: the greater the probability, the higher the initial instalment payment.

Haas believes that “we won’t have P4P contracts for every drug. We will focus on the particularly important medicines whose effects can be measured relatively easily and unambiguously. We cannot push the complexity of measuring and classifying success, or data transfer, into the realms of the unquantifiable. We are feeling our way in this world.”