The early benefit assessment in the context of the Act on the Reform of the Market for Medicinal Products (AMNOG)

A critical analysis from the perspective of the stakeholders at the end of the 17th legislative period


Bachelor Thesis, 2013
68 Pages, Grade: 1,4

Excerpt

Contents

List of abbreviations

1. Introduction
1.1 Scope
1.2 The central research question
1.3 Methodology

2. The Act on the Reform of the Market for Medicinal Products
2.1 The background of the Act
2.2 The objectives of the Act
2.3 The Federal Joint Committee (G-BA)
2.4 The Institute for Quality and Efficiency in Healthcare
2.5 The manufacturer dossier
2.6 Early benefit assessment
2.7 The special case of orphan drugs

3. Evaluation, findings and experience – Critical analysis
3.1 Evaluation of the added benefit classifications
3.1.1 Methodology
3.1.2 Frequency distribution of the added benefit categories
3.1.3 Comparison of the added benefit classifications
3.2 The impact on the statutory health insurance funds
3.2.1 Overview of the statutory health insurance funds in Germany
3.2.2 Challenges facing the health insurance funds
3.2.3 The Central Federal Association of Statutory Health Insurance Funds
3.2.4 The early benefit assessment from the perspective of the Central Federal Association of Statutory Health Insurance Funds
3.3 The impact on the pharmaceutical industry
3.3.1 The pharmaceutical industry in Germany
3.3.2 A critical assessment from the perspective of the pharmaceutical industry
3.4 The impact on patients
3.4.1 Patient organisation in Germany
3.4.2 A critical analysis from the patient's perspective
3.5 Conclusion

4 Summary and Outlook

Bibliography

List of figures

List of tables

List of appendixes:

Appendix

List of abbreviations

illustration not visible in this excerpt

1. Introduction

The German healthcare system is underpinned by the principle of solidarity. A health insurance fund, financed by contributions from employers[1] and employees, forms the financial basis of the system. This fund is used to pay all diagnostic and therapeutic benefits for citizens insured under statutory insurance schemes (Busse, et al., 2013, p 114). Healthcare resources are therefore limited. The financing of the fund faces a number of challenges: an increasingly aging population with increased morbidity, a decreasing number of young contributors and increased costs due to actual or supposed pharmaceutical innovations.

It is only natural therefore that the health insurance funds should be interested in scientifically proven treatments. The Federal Joint Committee (G-BA), a centralised body, decides on the eligibility of treatments for reimbursement. In order to reach a decision on the benefits of treatments that is as scientifically substantiated as possible, the G-BA commissions so-called Health Technology Assessments (HTA). HTAs are benefit assessments entailing the evaluation of existing studies and medical publications. The Institute for Quality and Efficiency in Healthcare (IQWiG) is one of the bodies entrusted with such HTAs in Germany.

In the past, high costs have been incurred in particular by the market launch of new medicinal products. To date, it was not necessary to demonstrate an additional therapeutic benefit. This changed with the Act on the Reform of the Market for Medicinal Products (AMNOG), which entered into force on the 1st of January 2011. This Act regulates the pricing of newly authorised medicinal products and thus their eligibility for reimbursement by statutory health insurance (GKV). In future, the manufacturer must demonstrate proof of an added benefit over a comparator therapy for all new medicinal products. The G-BA thus decides on the extent of the added benefit. It is assisted in its decision-making by an IQWiG benefit assessment.

1.1 Scope

The early benefit assessment in the context of AMNOG has consequences for all stakeholders within the healthcare system. Two and a half years after its entry into force, the impact of the Act is becoming more apparent, now allowing a more discriminating analysis. This thesis starts out by examining the theoretical foundations of the law and the bodies involved. This is followed by a critical analysis of the early benefit assessment of pharmaceuticals from the perspective of the health insurance funds, the pharmaceutical industry and the patients.

1.2 The central research question

What impact does the early benefit assessment in the context of AMNOG have on the stakeholders of the healthcare system in the light of the available data?

1.3 Methodology

The first part of the thesis will set out the theoretical background. For this purpose, the necessity of adopting the Act and its objectives will be elucidated. One aspect of the Act is the early benefit assessment, which will be explained in greater detail below. To ease understanding, the two bodies involved - the G-BA and the IQWiG – will first be presented and the structure and content of the dossier underlying an early benefit assessment clarified.

The second part of the thesis will go through the available data relating to the practical experience garnered to date. It will begin with an analysis of benefit assessments already concluded, which will provide a deeper insight into the frequencies and differences observed in the granting of added benefits, illustrated by diagrams accompanied by comments. The views of three stakeholders in the assessment procedure are subsequently set out. These are: pharmaceutical companies as manufacturers of the medicinal products subject to the assessment, the health insurance funds as administrators of the finances of the healthcare system and the patients[2] who rely on pharmaceutical innovations. This should make it possible to consider the early benefit assessment from the most important angles.

Due to the timeliness of the topic, the limited national relevance and the relatively short period since the entry into force of the law, the literature on early benefit assessment is few and far between. The thesis has therefore drawn on statements, annual reports, scientific articles, reports, etc. The author also personally participated in public hearings of the G-BA and cooperated in a workshop on "Economics and Health Technology Assessments in the area of haemophilia".

Finally, the impact of the early benefit assessment is interpreted and conclusions drawn.

2. The Act on the Reform of the Market for Medicinal Products

The steady progress in pharmaceutical treatments as a result of constantly new and, above all, costly drugs and treatment options presents a challenge for healthcare resources. That is why the health insurance funds are always on the lookout for ways of cutting their costs and, over the years, a variety of healthcare policy measures have been introduced to achieve such savings. The Act on the Reform of the Market for Medicinal Products (AMNOG), anchored in paragraph 35a of Volume 5 of the German Social Code, adopted by the German parliament on the 11th of November 2010 and in force since the 1st of January 2011, is an important instrument in this case in point.

2.1 The background of the Act

In 2009, more than 30 billion euros were spent on medicinal products, including the co-payments of the insured (Federal Ministry of Health, 2013a). A significant share of this total was incurred by innovative but also cost-intensive special preparations. "They already account for around 26 per cent of SHI’s volume of medicinal products, although their share of prescription accounts for only 2.5 per cent" (German Parliament, 2010). The increase in the cost of medicinal products without a reference price is particularly high in this respect. According to Jens Baas, Chairman of the Board of the Techniker Krankenkasse health insurance fund:

"The expenditure for this is the second largest item for the SHI. Properly applied, a good pharmaceutical therapy can be one of the most effective medical acts. The pharmaceutical industry is often seen as an innovative industry. And also in the political debate, “pharmaceuticals” are a topic that comes back time and time again. It is therefore worthwhile to continuously and carefully monitor the supply of pharmaceuticals." (Windt, et al., 2013, p. 5).

However, developing a new drug is a time-consuming and cost-intensive process. It takes an average of twelve years and costs several million euros from inception to approval. The pharmaceutical industry spends a great deal of money developing drugs with improved properties, and new indications and innovations in the supply of medicinal products are both desirable and indispensable. However, they are also a source of conflicts of interest between stakeholders. As shown in figure 1, on the one hand, there is a service catalogue bursting with high-quality and innovative drugs that should be fully available for patients. On the other hand, you have the limited resources of the SHI and the demand for sustainable financing. At the same time, the pharmaceutical industry must be supported and rewarded appropriately for the development of innovation. Thus, a "conflict arises between the industrial policy objective of promoting Germany as a location for innovation and the social policy objective of reducing expenditure" (Kohler, 2013, p. 21).

Figure 1: The conflict on the pharmaceutical supply market

illustration not visible in this excerpt

Source: Own diagram

“The medicinal products market is like no other. It's the realm of public health and thus a prerequisite for participation in society" (Wasem, 2012, p. 27). The healthcare decision-makers are therefore increasingly coming under the spotlight when it comes to deciding on optimal diagnostic and therapeutic measures. Thus health policy is also obliged to navigate its way through the medicinal products market and thus also juggle the expenditure on medicinal products with the help of effective instruments. Clinical studies and medical publications are of significant importance and are part and parcel of the on-going trend towards evidence-based medicine (Evans, et al., 2013, p. 20). For example, in recent years, a variety of policy measures has been introduced to keep down the expenditure of the SHIs. "Of the 30 regulatory instruments that existed up until the entry into force of the AMNOG at the beginning of 2011, 24 targeted a limitation of drug expenditure (price or quantity)" (Cassel & Ulrich, 2012, p. 58).

Back in 2007, the SHI Competition Enhancement Act stipulated that the IQWiG could be delegated by the G-BA with a benefit or cost-benefit assessment, primarily designed to find a "reimbursement amount" that appropriately remunerates the added benefit of newly authorised drugs (paragraph 35b of Volume V of the German Social Code). However, “the management tools introduced up until 2011 [ ... ] were unable to bring about the desired balance between heightened efficiency and cost containment in the field of the supply of medicinal products" (Köhler, 2013, p. 21). This can be put down to the fact that, until the entry into force of the AMNOG, pharmaceutical companies were able to set the prices for new drugs themselves, regardless of whether the drugs could produce an added benefit over existing drugs or not. The costs incurred were particularly high and spiralled (Federal Ministry of Health, 2010). The therapeutic added benefits and a fair balance of interests with respect to unreasonably high prices were often questionable. A survey showed that Germany was "a high-price country for non-fixed-price controlled medicinal products, the only country - apart from Malta – with no price regulation for such preparations and the largest European market and reference price country in the international pricing system” (Dingermann, 2013, p. 770).

As a consequence, some aspects of the pharmaceutical products market changed with the introduction of AMNOG, as the market - as the name of the Act already implies – was "reformed”. According to the Federal Ministry of Health”, the Act “paves the way for fair competition and a stronger focus on patient welfare” (Federal Ministry of Health, 2013b). The objectives pursued are presented in the following section.

2.2 The objectives of the Act

The AMNOG sets out to achieve three goals: structural changes, reduction of over-regulation and short-term savings. These measures are intended to cut costs by € 2 billion per year. Above all, however, the legislator is hoping for cheaper innovations for the German market (Federal Ministry of Health, 2013b).

The following objectives of the law have no role to play in the context of this thesis, but for the sake of completeness are described briefly[3]:

To counteract over-regulation, under the AMNOG, on the one hand, the two-opinion process (clause 73 d) and, on the other hand, the merit/demerit pricing system have been abolished. (Federal Ministry of Health, 2013b). Increasing the pharmacy rebate from 1.75 to 2.05 euros per pack of a prescription drug is a way of cutting costs for the health insurance funds in the short term. "The wholesale trade will lose a total of about 200 million euros in favour of the funds, of which EUR 170 million for the SHI" (Bergh, 2010, p. 5). Furthermore, the health insurance funds are set to save 300 million euros per year, as vaccine manufacturers in Germany are not allowed to charge higher prices than the major countries of the EU. Another example of cost-containment measures are cytostatic drugs[4]. If these are given as an infusion, in future only "fair market settlement prices" are to be agreed. Savings of 100 million euros annually are expected here by the SHI (Bergh, 2010, p. 5).

The structural changes mainly concern the newly introduced assessment of the added benefit and thus the early benefit assessment. In the context of this thesis, the focus will be put on this part in particular, which is examined in detail in section 2.4.

2.3 The Federal Joint Committee (G-BA)

Before illustrating the early benefit assessment procedure, it is first necessary to give an outline of the body known as the Federal Joint Committee (G-BA). This is the decision-making body in the field of early benefit assessment.

Figure 2: Distribution of seats and structure of the Federal Joint Committee

illustration not visible in this excerpt

“The Federal Joint Committee (G-BA) is a legal entity under public law and is formed by the four major umbrella organisations of self-management in the German healthcare system (see figure 2): the Confederation of Contract Doctors and Dentists, the German Hospital Federation and the Central Federal Association of Statutory Health Insurance Funds" (G-BA, 2013a). The G-BA also has three impartial members, one of which is the Chairman of the body. Thus, the G-BA is composed of 13 voting members. The meetings of the G-BA can also be attended by five representatives of the patients. These are not entitled to vote, but may submit proposals.

The G-BA is the supreme decision-making body for health-related topics and comes under the legal supervision of the Federal Ministry of Health. The G-BA is divided into nine sub-committees. The medicinal products subcommittee deals with the early benefit assessment. The names of the members of the Committee are subject to strict confidentiality in order to avoid possible interference (G-BA, 2013b).

2.4 The Institute for Quality and Efficiency in Healthcare

The Institute for Quality and Efficiency in Healthcare (IQWiG) was established in 2003 as part of the SHI Modernisation Act. It operates under the auspices of self-management in the German healthcare system. The Institute has received a general mandate from the G-BA, i.e. it can also independently tackle themes and deal with them in so-called “working papers”. Its task is to examine the benefits and harms of medical measures. Furthermore, the IQWiG receives concrete assignments from the G-BA. "The Institute draws up professionally independent, evidence-based (substantiated) reports, for example, on:

- medicinal products
- non-pharmacological treatments (e.g., surgical procedures)
- methods of diagnosis and early detection (screening)
- treatment guidelines and disease management programmes (DMP) "(IQWiG, no date).

As such, the Institute does not conduct studies on its own account, but draws on existing studies and scientific publications.

The IQWiG is divided into three services (quality assurance, information management and law) and eight departments (medicinal product assessment, non-pharmacological methods, health economics, quality of care, health information, medical biometry, communication and administration) (IQWiG, 2013a, p. 47 -51).

IQWiG is financed by charges for inpatient and outpatient medical care under the statutory health insurance system. These charges are determined each year by the G-BA according to the budget of the IQWiG.

Starting out with eleven staff members, the Institute now has 166 employees (see figure 3). 34 of the new jobs were created as a result of the AMNOG. In 2012, 37 employees were working in the field of medicinal product assessment (IQWiG, 2013A, pp. 47-51).

Figure 3: Scope of the work of the IQWiG

illustration not visible in this excerpt

Source: own diagramm according to IQWiG, 2013a, p. 44

Under the AMNOG, the IQWiG is assigned two new tasks: on the one hand, it assesses the dossier of the pharmaceutical manufacturer and draws up a benefit assessment on this basis. On the other hand it draws up a cost-benefit assessment in the event of an unsuccessful arbitration award (the complete early benefit assessment procedure is discussed in detail in section 2.6). This thesis shall focus solely on the benefit assessment however, since the drawing up of a cost-benefit assessment in the context of AMNOG has not been necessary so far (IQWiG, 2013a, p. 18).

2.5 The manufacturer dossier

In order to demonstrate that the new drug is also an innovation, the pharmaceutical company in question is invited to submit a standardised dossier to the G-BA. The structure and content of this dossier is presented below. Figure 4 illustrates the scope and relations of the different modules of the dossier.

illustration not visible in this excerpt

Figure 4: Structure of the dossier

Module 1 contains the administrative information. This is also where the statements of the dossier are summarised.

The second module includes general statements about the medicinal product. Furthermore, the indications are named.

Module 3 contains the appropriate comparator therapy, the number of patients with therapeutically significant added benefits, the cost of the treatment for the SHIs and the requirements for a quality assured application.

Module 4 comprises a systematic overview of medical benefits and medical added benefits, a description of the methodology and the results and details of the patient groups, for which there is a therapeutically significant added benefit.

Module 5 contains the appendices.

Source: Own diagram according to IQWiG, 2013b

This is where the full text of the cited sources, files for the documentation of information gathering, reports of all studies of the pharmaceutical company, essential authorisation documents, assessment report of the authorising authority and a checklist for testing the formal completeness can be found (IQWiG, 2013b).

To ensure a consistent format, the G-BA provides the pharmaceutical company with templates that need to be filled out accordingly. The complete dossier must then be submitted electronically as a DVD in duplicate and no later than four weeks after the authorisation of the medicinal product to the G-BA (G-BA, 2013c).

According to paragraph 5 section 1 of the Ordinance on the Benefit Assessment of Pharmaceuticals (AM- NutzenV): "The added benefit must be proven by the pharmaceutical company in the dossier according to paragraph 4. The Federal Joint Committee has no obligation to examine the facts of its own motion.”

2.6 Early benefit assessment

One of the measures introduced by the AMNOG is the benefit assessment of medicinal products. This means that newly authorised medicinal products are subject to an early benefit assessment. That being said, "the Federal Joint Committee can order a benefit assessment even for medicinal products already authorised before the 1st of January 2011 and placed on the market (so-called existing market)" (German Parliament, 2013). On the basis of a benefit assessment, a possible added benefit is to be appraised over an appropriate comparator therapy in order to counteract inappropriate medicinal product prices through fair price negotiations.

All the guidelines for the early benefit assessment are anchored in the Ordinance on the Benefit Assessment of Pharmaceuticals. During the benefit assessment, the medicinal products are assigned to one of the benefit categories laid down by the legislator in this ordinance. These are "significant added benefit", "substantial added benefit", “minor added benefit", "added benefit not proven", "added benefit not quantifiable", or "no assessment due to an incomplete dossier". In the event of "no assessment due to an incomplete dossier" the result is interpreted as "no added benefit". In addition, the reliability of the assertion can be expressed by the very strong "proof”, the weaker "evidence" and finally by "indication". It is further possible to grant an "exemption" from the assessment, giving the reasons.

In this thesis, the focus is on early benefit assessment and the procedure involved is presented in chronological order. Paragraph 2 of the Ordinance on the Benefit Assessment of Pharmaceuticals sets out definitions for medicinal products with new active ingredients, the benefits of medicinal benefits and added benefits of a medicinal product. These definitions also apply to this thesis:

"(1) medicinal products with new active ingredients within the meaning of this Ordinance are medicinal products containing active ingredients, whose effects are not widely known the first time they are authorised by medical science. A medicinal product with a new active ingredient within the meaning of this Ordinance shall be deemed as a medicinal product with a new active ingredient as long as document protection exists for a medicinal product approved for the first time.

[...]


[1] To make this thesis easier to read, the generic masculine is used even when referring to both genders.

[2] In the context of this thesis, “patients” shall be defined as all insured persons who currently receive healthcare benefits.

[3] More detailed information on this can be found for example on the website of the Federal Ministry of Health.

[4] Cytotoxic drugs are "drugs used in chemotherapy that inhibit the growth of cancer cells, but that can also damage normal tissue" (GBE, 2013).

Excerpt out of 68 pages

Details

Title
The early benefit assessment in the context of the Act on the Reform of the Market for Medicinal Products (AMNOG)
Subtitle
A critical analysis from the perspective of the stakeholders at the end of the 17th legislative period
College
Neisse University Görlitz
Course
V282129
Grade
1,4
Author
Year
2013
Pages
68
Catalog Number
V282129
ISBN (eBook)
9783656766018
ISBN (Book)
9783656766025
File size
769 KB
Language
English
Tags
AMNOG, frühe Nutzenbewertung, Arzneimittelmarktneuordnungsgesetz, Gemeinsamer Bundesausschuss, G-BA, Arzneimittel, Arzneimittelbewertung, Gesundheitspolitik, Gesundheitsökonomie, Nutzenbewertung, early benefit assessment, Reform of the Market for Medicinal Products, Germany, Federal Joint Committee, Pharmaceutical companies, benefit assessment, German Healthcare System
Quote paper
Sara Schlenkrich (Author), 2013, The early benefit assessment in the context of the Act on the Reform of the Market for Medicinal Products (AMNOG), Munich, GRIN Verlag, https://www.grin.com/document/282129

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