German legislators have voted to continue until the end of 2017 the price freeze on reimbursed drugs - which was introduced in August 2010 and originally set to expire at end-2013 - although products covered by internal reference pricing (IRP) are to be exempted. 

The vote in the Bundestag (parliament) on amendments to existing pharmaceutical policy has also passed a Ministry of Health proposal to abandon the programme of retrospective benefits assessment of medicines launched in Germany pre-2011, when the Act on the Reform of the Market for Medicinal Products (AMNOG) was introduced. The Ministry had called for the scheme to be scrapped because of the massive administrative burden which it presents, but also said the continuing the price freeze would be necessary to cover the savings lost by ending it.

Controversially, the Bundestag also voted to end the practice of basing patient co-payments and wholesaler and pharmacy margins on the list prices of products, which are set by the manufacturers. These will now be set according to products’ negotiated (discounted) prices, which are generally considerably lower than the list prices.

Ahead of the vote, multinational drugmakers were expressing concern about this latter move. While levels of negotiated prices are not generally available now, in future they will be reported to information databases, as the list prices currently are, and thus will be revealed to other countries which use Germany as an international reference price source, which would then be expected to use this information to press for lower prices within their own healthcare systems.

One problem is that the new law refers to manufacturers’ rebates as reimbursements, thus setting a fixed price rather than a discount which can be temporary and flexible, they add.

Germany’s research-based pharmaceutical industry association, VFA, welcomed the scrapping of the retrospective benefits assessment programme, pointing out that the Federal Joint Committee (G-BA), the drug pricing watchdog which has been carrying out the assessments, considers it to be “barely feasible.”

VFA also applauded the Bundestag’s vote in favour of reducing the mandatory discount required from manufacturers of reimbursable drugs to 7% from 16%. However, the group’s chief executive, Birgit Fischer, condemned the vote for a long-term price freeze without compensation for inflation, pointing out that companies are unable to pass on or refinance their cost increases.

The financial burden on the industry resulting from the freeze had stood at around 2 billion euros for 2009-13 and, if the moratorium is to continue at 2009 levels, this burden will rise to 1 billion euros this year and 1.2 billion euros in 2015, Ms Fischer forecast.

“A long-standing price moratorium thus at least requires consideration of the general price development. In our opinion, this should be done by adjusting the price level to the rate of inflation and should be restricted to a clearly-limited timeframe,” she said.

Nor, said Ms Fischer, had legislators given sufficient discussion to how the fixed-price and reimbursement systems can harmonise in future without jeopardising the healthcare system.

“The politicians have not done themselves a favour with this,” she said.

- The new policy measures are due to have a final reading in the Bundestag this month and are expected to take effect at the beginning of April.