Secret drug prices: Foul play against Europe and an own goal for the pharmaceutical industry - Observer Gesundheit

The European Football Championship in Germany has kicked off with the opening match between Germany and Scotland. "Home game for Europe" is the German government's slogan for this major event, which aims to unite the people of Europe [1]. Two days earlier, the Health Committee of the German Bundestag had discussed an important project for European politics: the confidential reimbursement prices within the AMNOG procedure as part of the Medical Research Act (MFG). During the discussion, it became clear once again that the planned secret prices are foul play against Europe. And they are an own goal for the pharmaceutical industry.

An important argument put forward by the proponents of price confidentiality is as simple as it is wrong, namely, that its introduction would allow greater leeway in price negotiations, which would consequently lead to greater availability of new drugs in Germany [e.g. 2, 3]. Shortly after the introduction of the Act on the Reform of the Market for Medicinal Products (AMNOG) in 2011, the German Association of Research-Based Pharmaceutical Companies (VfA) first pushed in this direction, claiming that price transparency in AMNOG would negatively affect the market launch of drugs in Germany [4]:

"Today, Germany is usually the first country in the European Union where an innovative drug is available to patients. In future, delaying market entry could help the drug manufacturer to avoid the negative consequences of international price referencing. This creates the wrong incentives" (VfA 2011, translated by IQWiG).

Does price transparency hinder drug availability? The opposite is the case!

And what is the reality after 13 years of full price transparency? Exactly the opposite! Germany is the European champion when it comes to the availability of new drugs - both in terms of the number of drugs and the speed of market entry - and is far ahead of countries with confidential prices. This is also shown by the pharmaceutical industry's own analyses [5].

The real objective of confidential reimbursement prices becomes clear in the above quote by the VfA, which is still bluntly repeated today: The aim is to prevent international referencing to real German prices and thus to achieve a different price level in other countries. But even today, with published prices, many European countries are barely able to bear the high costs of new drugs. A recent analysis describes this, including the consequences for health care in many European countries [6]. Secret prices in Germany will exacerbate this problem, as even higher asking prices of manufacturers will be even less affordable for these countries. There is a risk of massive collateral damage for patients in the EU.

Secret prices: An own goal for the pharmaceutical industry

Ultimately, secret prices are also an own goal for the pharmaceutical industry. This results from the aforementioned collateral damage for the other European countries in combination with the upcoming European Health Technology Assessment (EU HTA).

An important condition for EU HTA is that the different health care situations in all EU countries are considered and addressed in the assessment report. Accordingly, the dossier submitted by the drug manufacturer must also address these different situations. At the beginning of an assessment, in future each country will therefore submit its relevant research question based on the specific national health care situation. For example, if new drugs are regularly available, then they can often provide a good benchmark for the next generation of drugs. However, if this is not the case, then older, often generic drugs will usually be the right benchmark for the country in question.

The more the standard of health care varies across the EU, the more the research questions submitted by the different countries for EU HTA will vary. The collateral damage caused by the planned confidential reimbursement prices will expose these differences and perhaps even exacerbate them. This will achieve the opposite of what EU HTA was introduced for, namely, to raise the standard of health care in the EU to an equally high level in all countries. Of course, this will also have an impact on the preparation of EU dossiers: the effort required by manufacturers will remain the same in the long term or even increase with increasing inequalities between countries. A classic own goal for the pharmaceutical industry.

The Bundestag as a VAR?

The video assistant referee (VAR) system has been used in football matches for a number of years. The VAR is supposed to intervene when the referee on the pitch makes a clearly wrong decision. As a regular visitor to football stadiums, I am not a fan of the VAR. The sometimes lengthy interruptions always spoil the atmosphere. But secret drug prices are another matter. It's worth pausing here and taking another look at the current decision: is it right or wrong? By acting as a VAR, the Bundestag can still prevent own goals and fouls that would affect the whole of Europe.