Drugmakers Bash Germany on Prices

Drugmakers Bash Germany on Prices

June 8th, 2012 // 3:05 pm @


For more than a year, drugmakers have chafed at measures instituted in Germany to limit the cost of medicines.. Now, though, drugmakers are starting to push back. In a sternly worded statement released today, the European Federation of Pharmaceutical Industries and Associations and VFA, its local counterpart in Germany, warn the German government that its health regulation law, known as AMNOG, is “very disappointing,” “inflexible” and “flawed,” and poses a “serious” threat to the country’s standing as a leader in providing innovative medicines.

“Recent years have seen the introduction of a series of punitive measures in Germany. A 16 percent 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 Bergstrom, the EFPIA director general, in the statement.

The German government, for instance, gives drugmakers one year to negotiate prices with insurers after new drugs are introduced, but if a deal is not reached, the German Health Ministry can set maximum pricing, triggering a cost-benefit analysis. The move came as Germany, like other nations across Europe, began searching for ways to shrink their budgets and focused on the cost of medicines as an area ripe for cuts.

But the trade group charges that the government makes comparisons with drugs that are not chosen by the European Medicines Agency for its own evaluations. And these choices are 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,” the statement reads.

And the trade group is rather blunt about possible consequences, suggesting that Germany will find it difficult to retain drugmakers and jobs. Such a move, in fact, was hinted at last year when Pfizer cut roughly 500 positions just as a price cap was expected to be placed on its Lyrica painkiller (back story). “The healthcare policy environment has clearly clouded the expectations for future business,” said a Pfizer spokesman told local media at the time.

Bergstrom complains that “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 madeavailable in Germany, because the model seeks to base the price for new medicineson 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 attractnew investments” (here is the EFPIA statement).

The tongue lashing, by the way, comes just two days after the Association of the British Pharmaceutical Industry similarly castigated the UK government for “encouraging ‘breakthrough drugs’ at the expense of significant gains for patients from incremental innovation in medicines.” The trade group warned that innovation is being threatened and its missive came on the eve of pricing negotiations

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