Wednesday, January 25, 2012

Germany - New Reimbursement rules likely to benefit Generic penetration

From January 2012, Germany the largest pharma market in the EU, has implemented a law known as AMINOG,  which requires companies launching new drugs to submit a cost-benefit dossier to G-BA,  the ultimate decision-maker in German healthcare. The proportion of cost that would be reimbursed would depend on the relative benefit of the drugs in terms of morbidity, mortality or quality of life in patients.

Due to such norms, innovators companies are contemplating whether or not they should launch their drugs in Germany, in case the price offered is too low. Novartis ultra long acting bronchodilatory which offers once daily compliance is being reimbursed at a lower price than the twice daily generic LABA alternative available in the market. Even Lilly/BI have delayed the launch of their diabetes drug - linagliptin ( a DPP-IV inhibitor) in germany. 

Such kind of evidence based reimbursement  regulations would make the drug development process costlier and more time consuming as the clincial trials would have to be designed to gauge the outcome benefit of drugs on morbidity, mortality and quality of life.

The drug companies are likely to be in a difficult situation as Germany is a large market, which they may not be able to ignore. Besides, the German market  is also important becasue, the prices set by German regulators are treated as reference price by many other major countries in the world.