Germany is one of the most attractive markets for pharmaceutical companies in Europe, due to the size of its population and its importance as a pricing reference in Europe. However, entering this market comes with a unique set of challenges, particularly in navigating the complex reimbursement landscape. For market access professionals looking to introduce new drugs into Germany, understanding these hurdles is essential for a successful market entry.

Understanding the challenges of entering the German pharmaceutical market

The German pharmaceutical market is governed by stringent regulations. The key challenge lies in the AMNOG (Arzneimittelmarkt-Neuordnungsgesetz, “Pharmaceuticals Market Reorganization Act”) process, which requires all new innovative pharmaceuticals to undergo a benefit assessment by the Federal Joint Committee (G-BA). This assessment is crucial as it determines the manufacturer’s ability to influence the reimbursement price, and therefore has a direct impact on the profitability of the drug in the German market and beyond, where the German price is considered as a reference point​.

Navigating the AMNOG process

To successfully navigate the complex market access environment in Germany, pharmaceutical companies must have a clear strategy for addressing the AMNOG process. This process begins with the submission of a benefit dossier, which is assessed by the IQWiG (Institute for Quality and Efficiency in Health Care). Afterward, the pharmaceutical company must submit a written statement regarding the benefit assessment and an oral hearing takes place. Subsequently, the Federal Joint Committee (G-BA) publishes a resolution on the additional benefit of the drug six months after dossier submission in Germany, which forms the basis for price negotiations​.

Preparing for the benefit assessment – Leveraging the G-BA consultation

Early consultations with the G-BA can significantly improve the strategic positioning of a pharmaceutical company’s product in the German market. The consultation, which usually takes place before the start of Phase III pivotal studies, allows companies to clarify which evidence requirements are expected for the benefit assessment, e.g., which drugs in the comparator arm are suitable as appropriate comparator therapies (ACT) and which endpoints are likely to be accepted as patient relevant. This early-stage engagement with the G-BA helps pharmaceutical companies align their strategy with the assessor’s expectations and reduce the risk of derailments during the benefit assessment process.

During G-BA consultations, several critical topics are typically addressed. These include the determination and evaluation of the possible ACT — a crucial element in demonstrating the additional benefit of the new drug. Questions are also raised about the study endpoints, focusing on which endpoints are patient-relevant in terms of the benefit assessment. Furthermore, the design and duration of the clinical studies are scrutinized, especially ensuring the study population reflects the German Statutory Health Insurance (SHI) population. These discussions provide strategic guidance and influence the overall structure of the clinical development program.

The insights gained from G-BA consultations can inform the design of the pivotal study and the subsequent preparation of the benefit dossier. By addressing the key issues raised during the consultation — such as the appropriate comparator therapy, patient-relevant endpoints, and other components of the study design — pharmaceutical companies can ensure their study design aligns best with G-BA’s expectations and is aligned with the requirements of the benefit dossier. This can significantly improve the chances of demonstrating an additional benefit, which is pivotal in the price negotiation phase. Although the recommendations from the G-BA consultation are not binding, they serve as valuable guidance, particularly as the standard of care and guidelines can evolve, potentially impacting the dossier submission.

The relevance of the appropriate comparator therapy — Benchmarking the additional benefit

The ACT plays a key role in the benefit assessment of new drugs in Germany. The ACT reflects the standard of care in the country, serving as the benchmark against which the new drug’s additional benefit must be demonstrated. The G-BA is responsible for determining the ACT, and its selection has far-reaching implications, including influencing price negotiations. Importantly, the ACT is legally binding only once the G-BA publishes its resolution, but it can evolve, particularly if new innovations enter the market before the drug launch. If the ACT is anticipated correctly and corresponding evidence is demonstrated, only then can the new drug’s potential additional benefit be assessed.

For a new drug to be considered beneficial, it must demonstrate superiority over the ACT, either in terms of efficacy, safety, or other patient-relevant outcomes. This differentiation is crucial because it directly impacts the G-BA’s evaluation of the additional benefit. The new drug needs to show clear and statistically significant advantages in areas like improved survival rates, health-related quality of life, or reduced side effects compared to the ACT. The more distinct and favorable the new drug is in comparison to the ACT, the higher the likelihood of receiving a positive benefit assessment, which can then positively influence the price potential.

A special case for orphan drugs

Orphan drugs follow a unique pathway within the German reimbursement landscape. By law, these drugs are granted a “non-quantifiable” additional benefit, meaning that they do not require evidence with a direct comparison to the ACT for their benefit assessment. However, once the orphan drug’s revenue exceeds €30 million within 12 months, a regular benefit assessment process is initiated, where the drug is required to demonstrate an additional benefit against one or more ACTs. This means that while orphan drugs initially enjoy certain exemptions, they may eventually be subject to the same rigorous benefit assessments as other pharmaceutical products once they cross the revenue threshold. Early consultations with the G-BA regarding potential future ACTs are particularly useful for orphan drugs, as they prepare manufacturers for what may come if the drug loses orphan status or exceeds the revenue limit. If the company expects to exceed the revenue threshold, they may also opt to develop a full benefit assessment right away.

Demonstrating the additional benefit — The benefit dossier

The benefit dossier submitted to the G-BA is the cornerstone of demonstrating the additional benefit of a new drug. It presents detailed descriptions of the methodology, including the statistical analyses, the study results, and at least a systematic literature review. Moreover, study results for specific subgroups (e.g., gender, age, disease severity) are presented, so that more details are included than in the clinical study report.

The dossier is compromised in 5 Modules. While all modules are important, Modules 3 and 4 are particularly critical. Module 3 addresses essential aspects such as the ACT, disease description, medical need, epidemiology, the number of patients in the target population, and therapy costs. Thus Module 3 provides the contextual basis for evaluating the new drug’s place in the therapeutic landscape. Module 4, on the other hand, is the heart of the dossier, focusing on the evidence generated. It includes detailed descriptions of the methodology, results, and statistical analyses, often spanning hundreds of pages. These analyses cover various subgroups, including gender, age, and disease severity, and include systematic literature reviews. Together, these modules offer a comprehensive overview, presenting the evidence needed for the G-BA to assess the drug’s value compared to the ACT.

One of the biggest challenges pharmaceutical companies face is aligning clinical trial design with the G-BA’s benefit assessment criteria. While a trial may be excellent from a scientific or regulatory perspective, it might not meet the requirements of a benefit assessment if it does not reflect the German standard of care or the ACT. Ideally, trials should be designed with head-to-head comparisons against the ACT or, if not possible otherwise, indirect treatment comparisons. Furthermore, relying solely on marketing authorization criteria may not be sufficient, as these differ from those used for benefit assessments. Ensuring that the clinical trial design mirrors the G-BA’s expectations, especially in terms of comparator treatments and patient-relevant endpoints, is essential for demonstrating an additional benefit.

Decision on additional benefit

The G-BA’s decision-making process on whether a drug demonstrates an additional benefit is multi-step and involves multiple stakeholders. After the dossier is submitted, it undergoes a benefit assessment, during which the G-BA, informed by the IQWiG’s evaluation, weighs the advantages and disadvantages of the drug compared to the ACT. This process also includes statements from the manufacturer, clinical experts, and an oral hearing. If statistical uncertainties arise, the G-BA may grant a “non-quantifiable additional benefit,” but only if the medical relevance of the effect is clear. A detailed justification is required, covering each endpoint category, to explain how the final decision was reached. Any weaknesses in the dossier or the evidence presented can lead to a downgrading of the additional benefit, making it crucial that pharmaceutical companies present a strong, well-argued case.

Price-setting mechanism — The worth of the additional benefit

Once the G-BA resolution on the additional benefit of a new drug is published, the formal price negotiation begins within four to six weeks. The annual therapy costs of the ACT, presented in Module 3 of the benefit dossier, serve as the price anchor in these negotiations. If the G-BA grants the new drug a considerable or major additional benefit, a price premium can be negotiated on top of this anchor. The amount of the premium depends on several factors, such as the extent of the additional benefit (whether it is classified as considerable or major, for example), the robustness of the evidence supporting the benefit (proof, indication, or hint), the European price structure, and prior decisions of the arbitration board in similar cases.

If negotiations between the pharmaceutical company and the National Association of Statutory Health Insurance Funds (GKV-SV) fail, an arbitration board is brought in to make the final decision on the reimbursement price. Notably, arbitration board decisions from past cases can serve as a guideline for outcomes in future negotiations.

The correlation between price and additional benefit is at the heart of the AMNOG process. If the additional benefit is deemed considerable or major, the pharmaceutical company has the position to obtain a premium price. However, if the additional benefit is classified as non-quantifiable, minor, or absent, the post-AMNOG pricing potential is often limited and may even require a pricing discount in relation to the therapy costs of the ACT. In such cases, no price premium can be negotiated. As an alternative option to improve the pricing outcome, companies may leverage real-world evidence (RWE) or optimize the upper price range of the ACT to boost the average annual therapy costs.

Recent legislative changes, such as the “law to stabilize the financial situation of statutory health insurances (GKV-FinStG)” and the “Medical Research Act,” have introduced additional complexities. These laws affect pricing mechanisms, including the introduction of confidential reimbursement prices and mandatory rebates, which can pose challenges for pharmaceutical companies.

Final takeaways

The ACT is the cornerstone of the AMNOG process, influencing both the benefit assessment and subsequent pricing negotiations in the German pharmaceutical market. By carefully selecting and anticipating the right ACT during the trial design and dossier preparation, pharmaceutical companies can increase their chances of demonstrating an additional benefit, which is pivotal for achieving a favorable price. This interplay between the ACT and the drug’s assessed value determines its commercial success in Germany and serves as a reference point in international markets. Therefore, early strategic planning around the study design including the ACT, coupled with effective benefit dossier preparation, is essential for any sponsor aiming to unlock the full potential of their product in this highly regulated environment.

Notes

Kuchenreuther, M. J. & Sackman, J. E. (2014). Drug Benefit Assessment Challenges Market Access in Germany. Pharmaceutical Technology Sourcing and Management 10(12).

Alsan, K. (2024). Pharmaceutical Industry Faces Regulatory and Access Challenges in Germany, VFA Report Reveals. Market Access Today.

Koyuncu, A. & Aretz, M. (2024). Germany Again to Reform Drug Pricing and Reimbursement Laws – With “Confidential Reimbursements Prices” that Impede International Reference Pricing. Inside EU Life Sciences.

Koyuncu, A. & Aretz, M. (2024). Germany Amends Drug Pricing and Reimbursement Laws with “Medical Research Act” – Drug Pricing Becomes Intertwined with Local Clinical Research Expectations. Global Policy Watch.

Interested in learning more? Watch our recent webinar “Guide to Successful G-BA Consultations: Practical Tips for Market Access Professionals”:

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