EU Pharmaceutical Industry Leaders Call for Revision of German Model for Assessment of New Medicines

Brussels, 8 June 2012: In today's meeting in Berlin the leading pharmaceutical companies of Europe, represented in EFPIA, asked the German Government for urgent action to protect patient access to new medicines and ensure that Germany remains a home for pharmaceutical innovation.

“Recent years have seen the introduction of a series of punitive measures in Germany. A 16% rebate; an international reference pricing system that links the price of medicines in Germany to those in countries like Greece; and a medicines assessment system that links the price of new medicines to generics. The net effect is that German citizens will not benefit from access to innovative therapies that are available to citizens across Europe and the rest of the world”, says Richard Bergström, Director General of EFPIA.

He adds: "Germany has traditionally led the rest of Europe in providing quick access to new medicines for its citizens and recognising the value of new medicines and vaccines. This position is now under serious threat. It is absolutely appropriate that Germany manages its healthcare budget carefully and assesses medicines to ensure that they are priced at a level that reflects the value they deliver. However, early experience with AMNOG is very disappointing. The problems lie with a law that is flawed in parts, inflexible interpretation, and an unwillingness to consider creative solutions."

EFPIA member companies have found that the choice of comparator often differs from that chosen for the development programme after consultation with the European Medicines Agency, EMA. Indeed, the choice of comparator is being used to force German pricing for new medicines towards generic prices. Forcing the price of innovative medicines that deliver clinical benefit to match that of much older products will undermine incentives to life-changing medical discovery.
German patients would benefit from a more thoughtful and interactive choice of comparators, based on medical and patient reality. Price comparisons should be made with patented products, not generics, and there should be more meaningful consultation and discussion.

“We have found the set-up very rigid. Unfortunately, many of my member companies have been forced to announce that several new medicines will not be made available in Germany, because the model seeks to base the price for new medicines on what is paid for much older, generic medicines. This is not good for German patients and not good for the country as it strives to retain companies and attract new investments. AMNOG is in a learning-phase. We need to work together to ensure that it works the way it is intended to meet the needs of German patients.

The original intent was good, but some things were lost in translation to the practical model", continued Richard Bergström.

Another concern is the choice of reference countries as a basis for price negotiations. "The decision by the arbitration panel to include Greece in the basket of countries is hard to understand.", says Richard Bergström. "The pharmaceutical industry accepts short-term sacrifices in Greece to support the country at a crisis moment. When trying to benefit from lower prices in Greece, German policy makers fail to acknowledge that some countries have to pay more to sustain innovation. And Germany has benefited more than most countries from investments by the pharmaceutical industry", concluded Richard Bergström.

Birgit Fischer, Director General of vfa adds: “Europe is in a crisis. Growth will only come from sectors that innovate. A key way forward is to invest in Research and Development, in order to keep Germany and Europe capable of competing. Germany has the ability to strengthen Europe. Historical trends in pharmaceutical investment show that Germany benefits more than any other country from a strong European pharmaceutical environment – it therefore has the most to lose if Europe appears resistant to innovation”.

The path chosen by the German government poses a challenge to patient health and to the reputation of Germany as a home of innovation. These are difficult issues. They need to be addressed in partnership. The pharmaceutical industry, as EFPIA and its national association in Germany, vfa, remains constructive, and wishes to work with the German government and sickness funds to find a pragmatic solution to the problems encountered with AMNOG and with reference pricing."

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Fact Sheet:
Germany is a very important country for the pharmaceutical industry: it employs 103,208 persons, invested €5,2bn on research in 2010, and stands for a favourable trade balance of more than €13,8bn in pharmaceuticals.

The pharmaceutical industry is one of Europe’s top performing high-technology sectors. Sector R&D intensity is an effective means of ranking innovative industries as innovative pharmaceuticals have a sector intensity of 15.9%.