The cost-per-QALY (Quality-Adjusted Life years) pricing model is a trick used by drugmakers to raise prices, and as a pricing instrument it is “going completely the wrong way” because the benefits to patients cannot be quantified, a leading German health insurance expert has said.

Rather, the industry needs to demonstrate why prices are so high, Thomas Mueller, head of the pharmaceuticals department at the Federal Joint Committee (G-BA) - the lead decision-making body of Germany’s statutory health insurance system – told a conference in London recently.

“Give us a dossier which justifies the price,” he urged drugmakers, noting that the submission of studies by companies to the G-BA is currently at a very low rate. “We have communicated our frustration about this to the government,” he said, adding: “you cannot have a free market in patented drugs because the patients do not pay.”

Currently, prices of unpatented drugs in Germany are stable or even decreasing, because of the effects of competition, discounts and the system under which single insurers can tender for generics, covering 70% of the population, Dr Mueller told the meeting, which was organised by Health Network Communications. However, for patented drugs which are not included within reference price groups, prices are increasing around 15% a year. Germany provides reference prices for a number of other nations, so manufacturers are reluctant to reduce prices there.

But in terms of pricing, the greatest causes for concern for German insurers over the next four years will be the costs of patented drugs for the treatment of cancer, rheumatology and multiple sclerosis, plus biologics, and very high-cost products used to treat relatively small patient populations. There is currently “very intense political discussion” around these latter “niche busters” and their increasing impact on the drugs budget, he said.

Currently, 73% of all prescribed medicines - accounting for 43% of drug spending - are included in Germany’s reference price groups, which number more than 100 and set maximum reimbursement levels for all products included in the group. This system has been a “very powerful instrument for 20 years,” saving the statutory funds an estimated 4.3 billion euros a year, and has the support of all political parties, which have pledged to make it even stronger, he said.

However, Dr Mueller could not say if the controversial “co-signing” procedure for “special” drug treatments, inherited from the previous government and which took effect this year, will survive. The procedure covers risky and/or expensive drugs which can only be prescribed in consultation with another, specially-appointed doctor, and if the treatment is not prescribed according to the procedure, the doctor may face an audit and possible financial consequences. The procedure adds bureaucracy for doctors and it is unclear if its use will be successful in reducing expenditures, he said; discussions about its future are currently underway.