New German law could benefit pharma—depending on how it is implemented

A new German law intended to reform the country’s statutory health insurance sector also contains some important policy changes for the pharmaceutical industry. The Gesetz für einen fairen Kassenwettbewerb in der gesetzlichen Krankenversicherung (GKV-FKG; Act for Fair Competition Among Health Insurance Funds in the Statutory Health Insurance Sector) was approved by the German Parliament on 13th February 2020 and is due to take effect in late March or early April 2020. The legislation includes measures related to the status of advanced therapy medicinal products, the use of real-world evidence in the early benefit assessment process, the standing of reserve antibiotics, AMNOG rebates for drugs that lose market exclusivity and responses to the threat of drug shortages.

Classification of advanced therapy medicinal products

At present, the Gemeinsamer Bundesausschuss (GBA; Joint Federal Committee) has to decide whether a new advanced therapy medicinal product (ATMP) should be classified as a medicine or a procedure. In the future, most ATMPs registered using the European Medicines Agency’s centralised procedure will automatically be classified as drugs. As a result, they will undergo the AMNOG early benefit assessment process and be reimbursable as soon as they are licensed.

Medicinal status should guarantee immediate reimbursement, potentially expediting patient access to ATMPs. However, cell and gene therapies licensed nationally will not be covered by this new rule. Moreover, tissue-engineered medicines will be excluded on the grounds that the high level of physician involvement in their delivery effectively renders them a procedure.

The reform will mean that ATMPs will, in principle, no longer be confined to hospital use but could be prescribed by office-based physicians. Such a change will require adjustments to the einheitlicher Bewertungsma?stab (EBM; uniform evaluation standard), the system by which the statutory health insurance sector reimburses office-based physicians for their services.

Real-world evidence

The GKV-FKG clarifies that the GBA has the authority to require the collection of real-world evidence (RWE) from the time a new drug is launched. Indeed, the GBA will be able to make such a decision even before a drug has received marketing authorisation. The manufacturer, medical/scientific societies and the Arzneimittelkommission der deutschen ?rzteschaft (Drug Commission of the German Medical Association) will be notified in writing of requirements for RWE collection. Commercial confidence will be respected, but objections to any requirement for RWE collection will not delay the implementation of the process.

Status of reserve antibiotics

In an effort to tackle the growing problem of antimicrobial resistance, the new law will allow companies that launch new antibiotics to apply to the GBA for the status of reserve antibiotics. Such drugs will automatically be presumed to offer additional benefit under the terms of the AMNOG process—a concession similar to that already granted to orphan drugs.

AMNOG rebates

The GKV-FKG clarifies that AMNOG rebates remain in force until such time as they may be superseded by reference pricing—even if a drug loses market exclusivity.

Drug shortages

Manufacturers and wholesalers will have a statutory duty to provide the Bundesinstitut für Arzneimittel und Medizinprodukte (BfArM; Federal Institute for Drugs and Medical Devices) with information on inventories, sales volumes and potential shortages of essential medicines.

An advisory committee on shortages of essential medicines will be established. Membership will include representatives of patient organisations, medical societies, pharmacy bodies, manufacturers, wholesalers, health insurance funds and hospitals.

The BfArM and Paul-Ehrlich-Institut (Federal Institute for Vaccines and Biomedicines) will be authorised to compile a list of active substances that are necessary or critical for patient care.

Federal authorities will have the power to require manufacturers and wholesalers to take certain steps to ensure an appropriate and uninterrupted supply of medicines, including the possibility of maintaining a reserve supply of critical drugs.

In exceptional circumstances, it will be possible to dispense imported drugs that are not labelled in German. This concession will apply only to essential drugs that are prescribed directly by a physician to a patient.

If a drug covered by a voluntary rebate contract, or an alternative reference-priced product, is not available because of supply shortages, patients will no longer have to pay the difference between the reference price and the list price of a more-expensive product that is available. In future, health insurance funds will cover this price differential. This measure will apply only to drugs subject to voluntary rebate contracts between health insurance funds and manufacturers.

Implications for the pharmaceutical industry

The status change for most ATMPs is welcome news, given that it should expedite patient access and potentially open up the use of these products to office-based physicians. However, it is unclear how the GBA will evaluate these innovative products—especially if they lack obvious comparators.

The government’s support for the use of RWE in drug evaluation is also encouraging for the industry. However, a recent study commissioned by the GBA from the Institut für Qualit?t und Wirtschaftlichkeit im Gesundheitswesen (IQWiG; Institute for Quality and Efficiency in Health Care) was cautious about the use of RWE in the AMNOG process, recommending a role only for registry-based studies and expressing scepticism about other types of RWE. It is not yet known whether the GBA will follow IQWiG’s recommendations or accept a broader range of RWE. In any event, the GBA can be expected to set exacting standards for RWE.

Just one day after the GKV-FKG was passed, Josef Hecken, the Chairman of the GBA, spoke of the need for prospective data collection for certain therapies from the very first day they are available on the market. He suggested that the quality criteria applied to CAR-T-cell therapies could serve as a model for defining the requirements, noting that “they are the result of an expert consensus that we are also seeking in other areas.”

Hecken expressed concern that the evidence base for some ATMPs was limited. He commented that the GBA needs to have “an instrument to generate [at least] half-robust evidence”—not just for certain ATMPs, but also for some orphan drugs. The focus would likely be on technologies with high costs of therapy, uncertain long-term efficacy, limited patient populations and no evidence from RCTs. In addition, the success of the therapy would be particularly dependent on appropriate use of the technology.

The GBA intends to restrict the use of some ATMPs to a limited number of specialist centres. The objective is not to curb the number of patients but to ensure the quality of the data collection process: “The more I concentrate the users, the more valid the real-world evidence that is generated,” according to Hecken.

The presumption that reserve antibiotics offer additional benefit will lighten the load of the AMNOG process for manufacturers of such products. However, it remains to be seen if existing pricing procedures will be equal to the task of adequately rewarding companies for developing drugs that are intended to be used only in exceptional circumstances. The industry would likely argue that the GKV-Spitzenverband (National Association of Statutory Health Insurance Funds) has generally not been especially generous in its negotiations with manufacturers of innovative medicines.

The German government’s concern about the growing problem of drug shortages is apparent in the range of responses contained in the GKV-FKG. Shifting the burden of paying the extra cost of alternatives to rebated drugs that are not available from patients to health insurance funds is welcome news for both patients and manufacturers. On the other hand, the new law will impose potentially onerous requirements on pharmaceutical companies to plan for the risk of shortages of essential medicines. The concession of allowing the use—albeit only in exceptional circumstances—of products that are not labelled in German is a clear measure of how seriously the government views this problem. Indeed, it intends to use the country’s Presidency of the European Council in the second half of 2020 to propose measures to tackle shortages at a pan-European level.

The GKV-FKG undoubtedly contains some new policies that could help pharmaceutical companies. However, the actual value of these reforms will depend largely on how bodies such as the GBA, the BfArM, the PEI and the GKV-Spitzenverband choose to implement the legislation. Experience suggests the industry should not raise its hopes too high.