Drug pricing and reimbursement in Germany | Health Technology Assessment in Germany

Overview of healthcare system

Germany maintains near-universal medical protection, insuring roughly 99.9% of its populace through independent, non-profit entities termed sickness funds. Funding relies on mandatory payroll deductions split evenly between workers and employers.

Government-backed safety nets guarantee enrollment for job seekers and low-income demographics. With per-capita medical spending ranking among the steepest worldwide, the nation consistently delivers public health indicators that exceed European averages.

Public Coverage Mechanics

Statutory Health Insurance (SHI) premium deductions correlate directly with an individual's earnings rather than individual health risk.

As of late 2023, public funds protected roughly 89% of residents. Enrollment is legally obligatory for salaried workers earning beneath the statutory income threshold (EUR 64,350 in 2024). Eligible individuals can select their preferred sickness fund from various accredited options.

Benefits that are covered under SHI in Germany

Under statutory plans, enrolled members access a broad spectrum of essential healthcare interventions without direct upfront charges.

• Coverage spans routine general practice consultations, specialty outpatient visits, and acute hospital admissions, alongside comprehensive maternity and obstetrics care. B

• eneficiaries also receive preventive health screenings, routine immunizations, select travel vaccinations, and medically indicated dental services, which offer full reimbursement for minors under 18.

• Furthermore, the framework funds means-tested vision care, select psychiatric and behavioral therapies, physical rehabilitation, palliative end-of-life interventions, and physician-ordered home clinical visits.

• Most prescribed mobility aids and medical devices are included, with extended custodial assistance financed through the nation's mandatory long-term care insurance scheme.

Overview of Private Health Insurance in Germany

Private Health Insurance (PHI) functions in two capacities across the country:

• Primary Replacement: Covering around 8.7 million people (nearly 11% of residents) who opt out of SHI or exceed income thresholds, a figure holding steady over recent years.

• Supplementary Add-ons: Approximately 29.6 million SHI members (about 36% of the population) purchase private add-on policies to fund non-covered perks. Popular additions include private hospital rooms, premium dental coverage, access to senior hospital consultants, and relief from statutory co-payments.

Oversight and Structural Governance

Authority over the national medical system is divided among distinct tiers:

• Federal Ministry of Health (BMG): Establishes baseline health statutes, drafts federal healthcare bills, and audits regulatory organizations without participating in daily clinical administration.

• Federal States and Municipalities: Manage hospital resource distribution, invest in facility infrastructure, and direct regional public sanitation campaigns.

• Federal Joint Committee (G-BA): Serves as the central operative decision-maker for public insurance. The G-BA evaluates benefit inclusion, issues practice guidelines, and enforces clinical quality criteria across inpatient, outpatient, and dental sectors.

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Pharmaceuticals - Pricing and reimbursement:

G-BA is involved in deciding the goods and services that need to be covered by health insurance.

For inpatients, pharmaceuticals are fully covered. Since 2007, prices of branded drugs are being negotiated in Germany. For generics, tendering and price contracting are usually followed.

Pricing and reimbursement:

In January 2011, AMNOG was introduced in Germany. As per the AMNOG, there will be free pricing in the six months after the launch of any drug. After that, the price will be based on the systemic and formal assessment of the added therapeutic benefit of the pharmaceutical product. Until 2021, the free pricing was maintained for one year.

• There will be price negotiation if the new product has the same added therapeutic benefit as the standard of care.

• A reference price cluster is used if the new product has no added benefit compared to the standard of care.

There are a few exemptions for the AMNOG evaluations.

• If the annual expenditure of the particular pharmaceutical is less than EUR 1 million, there will be no assessment for that specific product.

• If the drug is orphan and the annual cost is less than EUR 50 million, then there will be no assessment for that product. However, if the yearly costs exceed EUR 50 million, the manufacturer will submit the therapeutic evaluation.

Drugs that are indicated in the hospitals are negotiated directly with the pharmaceutical companies.

Discounts:

Outpatients:

• 7% for the patented pharmaceuticals that are not included in the reference group

• Minimum of 6% and not more than 10% for generics

• 16% for retail discounts

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Co-payment:

Generally, patients are required to make the co-payments. However, there is a limit for the co-payment. They are required to contribute 10% of the cost of prescription drugs. The minimum contribution is EUR 5, and the maximum contribution is EUR 10.

Decision-making process

Following EMA authorization, pharmaceutical manufacturers freely establish an initial launch price. Under statutory pricing rules (AMNOG), this manufacturer-set price applies for the first six months post-launch.

During this window, the Federal Joint Committee (G-BA), supported by the Institute for Quality and Efficiency in Health Care (IQWiG), conducts an early benefit assessment.

G-BA:

It is involved in making decisions regarding the coverage of health goods and services. It is also involved in establishing the guidelines.

It is an umbrella association, including physicians, dentists, hospitals, and health insurance funds.

IQWIG:

The body is mainly involved in the clinical evaluation of the products.

G-BA Benefit Outcomes

• Major added benefit

• Considerable added benefit

• Minor added benefit

• Added benefit not quantifiable

• No additional benefit

• Less added benefit

Price negotiation:

G-KV is involved in the price negotiation with the pharmaceutical companies. The price negotiation is based on

• G-BA assessment

• The annual cost of therapy for other pharmaceuticals

• Prices in other European countries

References:

1. Blümel M, Busse R. International health care system profiles: Germany. The Commonwealth Fund. Published June 5, 2020. Accessed [Insert Date]. https://www.commonwealthfund.org/international-health-policy-center/countries/germany

2. HTA road maps Available from: https://tools.ispor.org/htaroadmaps/Germany.asp