Confidential discount proposal in Germany faces fierce disapproval from the healthcare system
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In recent weeks, Germany's Federal Council (Bundesrat) voiced their disapproval of the proposal for confidential discounting following a read-out of the Medical Research Act (MFG), echoing the same recommendation to reject the proposal reached by the Federal Health Committee. The MFG was the first of many reforms proposed by German Health Minister Karl Lauterbach in his wide-ranging policy announcement last year. The ability to negotiate confidential discounts were one of the methods with which he wanted to reduce time to access without imposing additional expenditure on the German Health system.
Karl Lauterbach claimed during the release of the act that, as an early launch country and key IRP reference throughout Europe, drug costs were artificially high. Therefore, the ability to negotiate confidential discounts would align them with other countries in Europe. But the stance of the Bundesrat is clear: the introduction of confidential rebates would not guarantee cost savings to the system, but it could potentially lead to decreased transparency and administrative burden.
The response of the Bundesrat is consistent with other regulatory bodies in Germany. The G-BA had already outlined its opposition to the MFG in its position paper outlined in February, where their view was if manufacturers could keep discounted prices confidential, then it would not necessarily lead to cost savings, only guaranteed additional administrative burden. This was further compounded by IQWiG’s opinion that the current visibility of reimbursed prices in German acts as a leading price reference for other countries with which to benchmark, as opposed to other European counterparts who can discount confidentially.
This was a viewed shared by GKV-SV board member Stefanie Stoff-Ahnis, who stated “secret prices” will only drive-up costs and decrease access to patients. Following last weeks’ opposition, she re-asserted that confidential discounts will undermine economic efficiency in Germany, especially if physicians cannot prescribe economically due to the lack of transparent price information and patients pay increased premiums.
The Bundestag is not obliged to adopt any of the Bundesrat's recommendations and the Ministry of Health is steadfast in supporting the introduction of confidential discounts. But the influential representatives of the German Healthcare system are aligned on the opinion that confidential discounting will not enhance the current system.
The introduction of confidential discounts in Germany would have a far-reaching effect on the pricing landscape in Europe and the rest of world markets. In Europe alone, Germany is a reference benchmark for 10+ markets. Whilst the potential benefits for the healthcare system in Germany may be clear to policymakers, it would have a profound impact on the European markets that reference Germany and may not have discount mechanisms (confidential or not) in place to negotiate affordable prices; or may increase their own administrative burden to achieve economical net prices. As other countries are moving away from negotiated confidential discounts, Germany may be moving in the other direction.
Are you considering a product launch in Germany or Europe and concerned about how this policy shift will impact your existing strategy?
Are you interested in how the overall policy landscape is changing and how it will present opportunities for market access in Europe?
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References
1. G-BA Rejects Confidential Drug Prices in Germany
2. Stellungnahme der hauptamtlichen unparteiischen Mitglieder des Gemeinsamen Bundesausschusses vom 20.02.2024 zum Referentenentwurf des Bundesministeriums für Gesundheit und des Bundesministeriums für Umwelt, Naturschutz, nukleare Sicherheit und Verbraucherschutz Entwurf eines Medizinforschungsgesetzes (MFG)
3. Germany Passes Medical Research Act, Maintains Confidential Pricing Proposal