Germany's Price Reform Revolution - Pharmaceutical Executive

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Germany's Price Reform Revolution

Pharmaceutical Executive


How to cope: strategic recommendations for companies


From the experiences made with early benefit assessment in Germany, four interdependent fields of action have been identified.
Preparation of the value dossier. The importance of the value dossier required of applicants under the law cannot be overestimated. It forms the core of the complex price formation process—it is used as reference from the benefit assessment to the price negotiation and arbitration. Arguments and perspectives not included or supported in the dossier can be introduced later as well, but the law provides little guidance as to whether this evidence will prove decisive at the final price negotiation phase.

To ensure the value dossier meets the law's criteria and makes the best case for the product under review, four aspects have to be considered:

Develop a baseline value argument and apply it consistently. Explain thoroughly the clinical benefits of the drug and frame your argument on the basis of the health and treatment outcomes most relevant to the local patient population. To increase the drug's chances of success, anticipate and address the perspective of the statutory health insurance funds, as the key player and ultimate decision maker.

Collect and incorporate comprehensive healthcare data. The evidence needed to support a strong value proposition constitutes a significant logistical challenge. Participants in the assessment process contend that companies have failed to verify their proposed additional benefit by not providing relevant epidemiological, healthcare, and budget impact data. Amassing the evidence required to satisfy the pricing gatekeepers is a task that must be introduced into company clinical development programs as early as possible. Evidence from randomized clinical trials used to win authorization from the FDA or EMA will have to be accompanied by additional data to secure an acceptable price. A value dossier that consists of material drawn mainly from an NDA package of evidence from prospective trials against placebo may end up being used to justify a price at generic levels.

Invest to demonstrate strong methodological certainty and expertise. A methodologically clear presentation of the evidence that is resistant to challenge is crucial. A common phenomenon in IQWiG assessment of the dossiers is harsh scrutiny of endpoints and a critical evaluation of subgroups presented by the pharmaceutical companies. Considering the downstream effects of a poor benefit assessment, an investment in methodological, and technical expertise is going to be more important to success than money spent on promotion materials under the old market conditions.

Build an internal organization that reflects the new requirements for price approval. Market access and health economics should be designated core functions and coordinated with other mission critical activities like R&D, commercial development and business development, and licensing. Although companies realize this, there are practical tensions in coordinating and modulating rivalries among competing interests, which means that the necessary skills and expertise are often not effectively brought to bear in making the best case.


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