German Benefit Assessment (AMNOG)

In Germany, innovative medicinal products are subject to the early benefit assessment according to AMNOG. Long-term strategic planning and preparation for the benefit assessment is useful in order to negotiate the best possible reimbursement amount. Ideally, this should start with the planning of the pivotal trial(s) and continue throughout the benefit assessment and up to the price negotiations. We are happy to support you in mastering these challenges and will prepare an appropriate market entry strategy as well as a target-oriented benefit dossier. In addition, we will prepare you in a specific and targeted manner for the price negotiations.

Innovative, patented medicinal products can be placed on the market in Germany immediately after receiving European or national marketing authorisation. In Germany, there is a special situation whereby the pharmaceutical company is free to set the price for a new, patented medicinal product when it enters the market and the medicinal product is also reimbursed by the health insurance funds. Upon market entry, the pharmaceutical company must submit a dossier to the Federal Joint Committee (G-BA) within the process of the early benefit assessment according to AMNOG. The benefit dossier must meet the formal criteria of the G-BA – in particular with respect to completeness – and must be prepared on the basis of the formats specified by the G-BA.

Early benefit Assessment according to AMNOG

The essential criterion for the preparation of an AMNOG benefit dossier is the comparison of a new medicinal product with an appropriate comparator therapy (ACT) determined by the G-BA. The additional benefit of a medicinal product is determined in comparison with an ACT. It is advisable to seek advice from the G-BA before preparing a benefit dossier, in particular for clarification of the ACT in the respective indication. If several ACTs exist, the pharmaceutical company may select one of the predefined ACTs for the early benefit assessment. The benefit assessment for innovative medicinal products is carried out by the Institute for Quality and Efficiency in Health Care (IQWiG) on behalf of the G-BA; the decision on benefit and additional benefit is made by the G-BA.

The G-BA assesses the patient-relevant benefit and additional benefit of an innovative medicinal product with regard to the endpoint categories mortality, morbidity, quality of life and side effects. The basis of the assessment is the methodology of evidence-based medicine, generally requiring randomised controlled trials (evidence level 1b) for medicinal products. If the ACT cannot be covered by the marketing authorisation studies, this poses a particular challenge. In this case, indirect comparisons must be conducted to describe the additional benefit. Apart from the additional benefit assessment, the G-BA decides on the number of patients in the indication / subpopulation, i.e. the prevalence of the disease in Germany. In addition, the costs of the new, innovative therapy are compared to the costs of the ACT.

The benefit assessment procedure is structured in terms of time and content. The early benefit assessment is published on the homepage of the G-BA within 3 months of submission of the AMNOG dossier by IQWiG. Subsequently, a hearing phase takes place which consists first of all of a written statement that must be submitted within 3 weeks. Then, an oral hearing takes place before the G-BA approximately 2 weeks after submission of the written statement. The decision of the G-BA regarding the additional benefit of an innovative medicinal product is published 6 months after market entry / dossier submission. The G-BA decides on the degree of likelyhood and the extent of the additional benefit of a new medicinal product compared to the appropriate comparator therapy. The result of the benefit assessment is an essential factor for the subsequent price negotiations with the National Association of Statutory Health Insurance Funds (GKV-SV).

Price Negotiations

The result of the benefit assessment by the G-BA has an impact on the price negotiations for the reimbursement amount. Following the benefit assessment, the price negotiations are conducted between the pharmaceutical company and the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) within 6 months. For this purpose, the GKV-Spitzenverband specifies 4-5 negotiation dates in order to reach an agreement on the reimbursement amount within this period. Price negotiations above the price of the most cost-effective appropriate comparator therapy (ACT) are only possible for medicinal products with additional benefits. The price for innovative medicinal products with no additional benefit or an unproven additional benefit is agreed at the level of the most cost-effective ACT. The law (§ 130b SGB V) stipulates that deviations from this requirement are only permissible in exceptional cases.

For new medicinal products that can be assigned to a fixed-amount group, the benefit assessment is carried out on the basis of the fixed-amount system. If no additional benefit can be established, these medicinal products are directly assigned to the existing fixed-amount group. The fixed amount is considered the maximum reimbursement amount.

The reimbursement amount takes effect 12 months after market entry. If no agreement can be reached on the reimbursement amount, an arbitration procedure will be conducted within 3 months. The reimbursement amount will then be determined retroactively.

For medicinal products that are assessed for a new indication, the reimbursement amount already negotiated will initially apply – for a period of 12 months. The existing price applies for medicinal products that were placed on the market before the introduction of the AMNOG. The reimbursement amount/price can be adjusted in the course of the negotiations.

Market Access and Reimbursement in Inpatient Care

The benefit assessment according to AMNOG also includes medicinal products used in inpatient care. While uniform prices apply in pharmacies in outpatient care, prices in inpatient care can be negotiated between pharmaceutical companies and hospitals. The reimbursement amount serves as the upper price limit for the negotiations.

Reimbursement in inpatient care between hospitals and health insurance funds is based on the inpatient reimbursement system. For the reimbursement of new medicinal products, hospitals can submit a so-called NUB (new examination and treatment methods) application to the Institute for the Hospital Remuneration System (InEK). If the assessment is positive, the new drug is reimbursed in addition to the DRG flat rates per case. NUB applications can only be submitted once a year with a deadline of 31 October; the decision of the InEK is made by the end of January of the following year.

Advanced Therapeutic Medicinal Products (ATMPs ) include novel medicinal products such as gene therapeutics, cell therapeutics or biotechnologically processed tissue products.

Gene and cell therapeutics are treated like novel medicinal products in the benefit assessment and are subject to the same assessment criteria. Biotechnologically processed tissue products, on the other hand, are classified as new examination and treatment methods in Germany, despite their approval as medicinal products. Thus, these products only become reimbursable once the benefit assessment procedure as a new examination and treatment method has been positively concluded. As a result, special challenges may arise for the market access and reimbursement of biotechnologically processed tissue products.

Gene and cell therapies are particularly interesting from the perspective of market access and reimbursement, as they are often one-off therapies. Thus, the costs of the therapy and the benefits for the patient diverge in time. To address this situation, various instruments have been developed, ranging from data collection supporting the application (real world evidence) to instalment payment models and financing via a risk pool.

We will be happy to advise you on the opportunities and risks of ATPMs with regard to reimbursement and market access.

Benefit Assessment of Orphan Drugs

The benefit assessment of orphan drugs according to AMNOG basically follows the same procedure as the assessment of conventional patented medicinal products:

• After European approval, orphan drugs can be marketed in Germany without restriction;
• A benefit assessment based on the submitted AMNOG dossier takes place within 6 months, and
• is followed by price negotiations with the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband); After 12 months, a new, negotiated reimbursement amount comes into effect.

The principle of free pricing at market entry also applies to orphan drugs. However, orphan drugs enjoy additional privileges:

• An additional benefit is already present per se with the authorisation.
• In the case of orphan drugs, no appropriate comparator therapy needs to be defined in order to determine the extent of the additional benefit. The study data relevant for the approval is used for the benefit assessment.

However, there are exceptions to the exception: if the sales of a medicinal product for a rare disease exceed the amount of 50 million euros within 12 calendar months, a “normal” benefit assessment is initiated which is based on the criteria for innovative medicinal products. As a result, a comparison with an appropriate comparator therapy will be necessary. Thus, if the sales volume exceeds 50 million euros, a new benefit assessment is carried out which also leads to new price negotiations.

Please contact us, if you have any questions about the procedure and the evaluation of orphan drugs.

Price Negotiations of Orphan Drugs

Price negotiations on the reimbursement amount of orphan drugs are far less predictable than price negotiations on classic medicinal products. The system of price negotiations with the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) is based on Section 130b of the German Social Code, Book V (SGB V) and the requirements of the framework agreement concluded between the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) and the industry associations.

The framework agreement stipulates that the additional benefit as a mark-up on the appropriate comparator therapy will lead to a reimbursement amount. In addition, the prices of comparable medicinal products in the indication and the European reference prices and quantities are added as pricing factors. Since for orphan drugs there is generally neither an appropriate comparator therapy nor comparable medicinal products in the indication, the reimbursement amount cannot ultimately be designed as a mark-up model depending on the additional benefit. The European reference prices are only indicative to a limited extent, as Germany is often one of the first countries in Europe to have a reimbursement amount.

Hence, orphan drugs often lack a reference value that enables the additional benefit to be classified in terms of price. The price negotiations for orphan drugs are therefore more strongly influenced by other factors in the price negotiations. We will be happy to support you!