By Andrea Bernardini, Senior Analyst
Email: [email protected]
Intensifying pressure to implement cost savings due to COVID induced economic downturn and the current ruling coalition, seem to be less amicable to the pharmaceutical industry. The latest focus of attention seems to be orphan drug (OD) status, the relative Health Technology Assessment (HTA) and pricing outcomes.
Since 2011, ODs are not required to undergo the regular HTA and benefit assessment procedure in Germany. In fact, for EMA-approved ODs an additional benefit is assumed to be proven, regardless of the presented data. Then, by reviewing the data, the Federal Joint Committee (G-BA) can only quantify this additional benefit only as major, considerable, minor, or non-quantifiable. In fact, the lower ratings of no additional benefit and less benefit are not intended for ODs. A full HTA and a regular benefit assessment is triggered if the €50million turnover threshold is hit by the drug. This policy was aimed to promote the development of ODs given the substantial market risks that manufacturers face in the process.
The independent Institute for Quality and Efficiency in Health Care (IQWiG), the lower HTA body, analysed all ODs since 2011, where a special orphan assessment and a subsequent regular assessment took place. It was reported that 54% of these ODs resulted in a no additional benefit rating in the regular assessment. This prompted calls by IQWiG for all ODs to undergo a full assessment. Thomas Kaiser, head of its department for drug assessment, stated that AMNOG was not “separating the wheat from the chaff” for ODs.
This position was supported DAK-gesundheit, one of Germany’s largest health insurance companies, after its commissioned AMNOG report 2022 was published last Tuesday. In fact, it called for the end of the lighter HTA reserved for OD drugs, and for an overall tougher stance on reimbursement policy, with the government already planning a halving of the free-pricing period from 12 to 6 months.
Following this, Professor Josef Hecken,chairman of the G-BA, stated that a change is needed to enable fair prices. He added that only ODs that first offer a therapy for a rare disease (i.e. with no alternative active ingredients), should benefit from a lighter HTA while the rest should face a direct therapy comparison. Prof. Hecken termed these drugs as “soloist” drugs. He also suggested lowering the turnover revenue threshold down to €25million to have a regular assessment earlier in the lifecycle and to assess the added benefit more quickly.
Therefore, a restriction of the orphan “privilege” is on the horizon in Germany, with policymakers, payers and HTA bodies calling for a rehaul of the OD status. We might experience the onset of a race between ODs to be considered “soloist”, should direct therapy comparison become the norm for all the “non-soloist” drugs. To add pricing pressure, even “soloist” ODs will face a smaller window of opportunity with the proposed lower revenue threshold.
Manufacturers of potential “non-soloist” drugs are advised to engage early with the G-BA to understand they deem to be acceptable and pragmatic evidence plans. This could help to help drive successful HTA outcomes with a view to sustain current price tags and revenues in Germany for orphan drugs.
If these changes go ahead, manufacturers should start optimising their development planning and launch strategy to improve HTA outcomes and commercial outcomes. Given how big of a contributor the German market is to European revenues, developments on this topic should closely be followed. In the meantime, P4A will provide constant updates on how to navigate the German market in what appears to be an interesting 2022.