Germany has mandatory health insurance scheme. 90% of the German population was covered by public health insurance and rest 10% is covered by private health insurance. 84% of the pharmaceutical costs are being covered by insurances.
German Pharmaceutical Restructing Act (AMNOG) was introduced in Germany in 2011. The AMNOG consists of two steps.
Step 1: The new pharmaceuticals “added benefit” was compared to “appropriate standard care” by Institute for Quality and Efficiency in Health Care (IQWIG). Federal Joint Committee (G-BA) makes the final assessment
Step 2: Once the assessment is complete, the market authorization holder makes the price negotiation with National Association of Statutory Health Insurance Funds (G-KV).
Products that do have no additional benefit doesn’t get price premium. However, products that contains some additional benefit gets price premium based on the extent of added benefit.
Orphan drugs do not need to demonstrate added benefit compared to comparators.
In Germany, health insurance funds call for tender in-order to have price regulation.
Rules for drug reimbursement:
1. All the drugs are reimbursed except the drugs which are not included in the negative list
2. Free pricing is followed in Germany
3. Pharmaceuticals of similar therapeutic equivalence are clustered into similar pricing area, they are subjected to maximum reimbursement rate
4. Drugs which costs less than 1 million euros yearly: No need to show reference with appropriate comparator
5. Hospital drugs: Prices are negotiated between hospitals and companies
Principles of assessment:
1. Products with new active ingredient or combination of active ingredients
2. For new indication or approved indication which has new target population
3. Drugs for which G-BA or company askes for new assessment. This might be because of availability of new evidence. G-BA can make a call on the new assessments