Confidential reimbursement amounts in Germany come with a price tag

Pharmaceutical companies can now request that the reimbursement amount for their medicinal products is not publicly accessible. According to the legislator, this should allow more room for negotiation because the global effects of the publicly visible price in Germany due to international price referencing would be eliminated, resulting in lower prices for medicines in Germany. Hence, confidential reimbursement amounts are intended to represent an additional cost-saving instrument, so that confidential discounts are likely to be higher than publicly visible ones. The prerequisite is that the reimbursement amount is negotiated on the basis of the first marketing of a medicinal product with a new active ingredient. According to the current draft bill, products already available on the German market will not benefit from this new option. 

In case of confidentiality of the reimbursement amount, pharmaceutical companies are obliged to report the agreed or determined reimbursement amount to all beneficiaries, including all statutory and private health insurance funds. Pharmaceutical companies must then compensate for the difference between the dispensing price actually paid and the agreed or determined confidential reimbursement amount including additional markups and VAT within 10 days of the claim being asserted. That is, companies must also compensate for the additional expenditure incurred by the health insurance funds as a result of confidentiality. According to the Verband forschender Arzneimittelhersteller, vfa, this makes confidential reimbursement amounts financially unattractive for the majority of medicines and only a relevant option for a few cases in which international price referencing would massively jeopardize the availability of innovative medicinal products in Germany. 

In addition to health insurance funds, hospitals and their supervisory authorities as well as all purchasers of medicinal products with new active ingredients outside of outpatient care in the SHI system, e.g., privately insured self-payers, have the right to receive information on the confidential reimbursement amount and the price difference to be reimbursed from GKV-SV, the umbrella organization of the SHI in German and negotiating party in the national price negotiations. However, it is not regulated how entitled persons or holders of the right to information are to handle the information about the confidential reimbursement amount. Hence, it is unlikely that confidentiality can be maintained. It is therefore questionable whether confidential reimbursement amounts actually provide an advantage in terms of international price referencing. 

Importantly, pharmaceutical companies have no right to information, while the GKV-SV has direct access to all confidential reimbursement amounts, which gives GKV-SV an information and negotiating advantage. Moreover, it is not regulated whether GKV-SV may include confidential reimbursement amounts relating to the appropriate comparative therapy in the price negotiations. 

Interestingly, for medicinal products for which a confidential reimbursement amount has been agreed or determined, pharmacies are no longer obliged to dispense low-priced imported medicines as they cannot check in the public databases whether cheaper imported medicines are available. This also applies to the decision made by prescribers based on economic efficiency. That implies that confidentiality of the reimbursement amount automatically ensures cost-effectiveness for pharmacies and prescribers preventing individual recourse claims, which can have a positive impact on market penetration and market share, especially in a highly competitive environment. 

Overall, the Medical Research Act Bill introduces several measures aimed at improving the framework conditions for the pharmaceutical sector in Germany. The introduction of confidential reimbursement amounts provides pharmaceutical companies with more negotiation flexibility, but it also comes with additional costs. Therefore, a company's decision to demand confidentiality of the reimbursement amount requires careful consideration of the economic opportunities and risks. We will closely monitor the further legislative process and continue to support our clients in the pharmaceutical sector in understanding the strategic implications for their medicinal products in Germany.

Sources:

• SKC analysis
• Stellungnahme vfa
• Referentenentwurf: Medizinforschungsgesetz