Healthcare Reform
This article was originally published in SRA
Executive Summary
German reform to have substantial impact on the pharmaceutical industry
German reform to have substantial impact on the pharmaceutical industry
The 2006/07 German healthcare reform is taking shape. In December 2006, the lower house of parliament (Bundestag) is scheduled to debate the Bill to Increase Competition in the Statutory Health Insurance Scheme (Gesetz zur Stärkung des Wettbewerbs in der gesetzlichen Krankenversicherung, or GKV-WSG). The act is scheduled to come into effect on 1 April 2007. As previously reported, it entails considerable changes for pharmacists as well as the pharmaceutical industry1.
Shake up of statutory healthcare insurance scheme
The act is intended to restructure the German statutory health insurance scheme (SHI) by establishing a new single federal public healthcare fund (Gesundheitsfonds) with the task of collecting and distributing the contributions of all SHI-insured members, ie nearly 90% of the German population. In addition to this financial tool the draft act encompasses a merger of the present seven federal public health insurance committees to a single federal joint committee as a new superstructure. This is mainly aimed at diminishing bureaucracy. As a politically embraced side effect it is likely to cut the number of the current, more than 200 independent public healthcare insurance funds. Health minister Ulla Schmidt once indicated that 30 would be sufficient. The last comprehensive organisational SHI reform in the 1990s reduced the number from over 1,000 funds to 250.
Private healthcare insurance companies, covering the remaining 10% of the population, are not left untouched. They are mainly forced to accept their former members who have opted or dropped out of the private system and are presently unable to get any new health insurance contracts.
Changes in reimbursement and marketing practice
The pharmaceutical industry will be affected by several cost-curbing measures. These measures will profoundly affect reimbursement and marketing practice, particularly with regard to newly developed, innovative drugs. The act entails:
- a maximum reimbursement price to be imposed on drugs by SHI funds, based on a cost-benefit evaluation by the public Institute for Quality and Economic Efficiency in Health Care (IQWiG);
- a second opinion by a specialist physician required for prescribing certain - mostly new and costly - drugs;
- restrictions on the use of prescription data;
- detailed information obligations on drug registries; and
- new opportunities for the industry to negotiate rebates with single SHI funds.
The new, additional rebate scheme enables the funds to set aside patients' co-payments if they purchase drugs subject to a rebate agreement. It exempts physicians from the formal efficiency evaluation as well as other bonus-malus rules in case they prescribe such rebated drugs. (A bonus-malus system is a no-claim bonus (or no-claim discount) system in which the premium level reached after a policy holder has made claims may be higher than that corresponding to the point of entry.)
In addition the aut-idem regulation will be revised. Under this rule pharmacists presently are obliged to replace a certain prescribed drug with a comparable, but less expensive one with the same active substance, unless the physician has expressly excluded such a replacement. From April 2007 pharmacists will be obliged to choose drugs subject to a rebate agreement for such substitutions. Drugs that are not subject to a rebate agreement with SHI funds can be included in rebate agreements between the seller and pharmacies. In this case the savings must be handed down to the SHI funds, except for a 15% margin for the pharmacists.
All of these measures are intended to give incentives to patients, physicians and pharmacists to choose rebated pharmaceuticals. They are likely to considerably increase the pressure on industry to enter into rebate agreements. In the long run it will most probably cut sales margins. In November 2006, the SHI market leader, the General Local Fund, already approached pharmaceutical companies to ask for best price offers.
JÖRG SCHICKERT AND STEFAN SCHULZ
References
1. The Regulatory Affairs Journal - Pharma, 2006, 17(9), 595