Medical Research Act 2024: Updates to drug pricing and reimbursement

On 4 July 2024, the German Parliament passed the Medical Research Act (Medizinforschungsgesetz or MFG), introducing significant changes to the country's drug pricing and reimbursement laws. This act is a pivotal step in Germany’s National Pharma Strategy, aiming to enhance the nation's attractiveness for pharmaceutical research, development, and manufacturing.

The Medical Research Act primarily revises:

1. National regulations for clinical trials involving drugs and medical devices, facilitation of decentralised clinical trials, centralised approval procedure for combined pharmaceutical and companion-diagnostic studies
2. Regulation of ATMPS such as formation of the ‘Federal Ethics Committee’ responsible for overseeing urgent or complex clinical trials specifically focused on ATMPs and official interpretation GMP and GCP guidelines for ATMPs
3. Drug pricing and reimbursement laws
4. Reorganisation of regulatory agencies like BfArM and PEI as well as ethics committees

The German Parliament approved an amended version of the Act proposed by the German Federal Health Ministry. The key changes in drug pricing and reimbursement landscape are:

1. The introduction of confidential reimbursement prices
2. The new connection between drug pricing and local clinical trials, providing pricing incentives for companies that demonstrate a ‘relevant part’ of their clinical trials for a new medicine were conducted in Germany

Confidential Reimbursement Prices

Pharmaceutical companies now have the option to keep reimbursement prices confidential. This change addresses the issue where German reimbursement prices, used as reference prices in other countries, led to unfavourable pricing in other markets that reference Germany, resulting in some drug companies withdrawing their products from the German market completely.

Criteria

• Demonstrate local R&D activities in Germany
• Pay a 9% discount on the agreed AMNOG reimbursement price

Implementation

1. The drug must have undergone the AMNOG process with a finalised reimbursement price

2. The pharmaceutical company has five days after the price is set to request confidentiality from the GKV-Spitzenverband, on the provision that they submit documentation that proves eligibility

3. The GKV-Spitzenverband has seven days to decide if the proof is sufficient

If confirmed, the reimbursement price remains confidential until the regulatory data exclusivity period expires. If not confirmed, the case is referred to the AMNOG arbitration board for a final decision.

4. Alternatively, companies can submit proof within six months after market entry, giving them flexibility to determine eligibility for confidentiality before reimbursement negotiations

Evaluation and Sunset Clause

The confidentiality option is valid from 1 January 2025 to 30 June 2028, with an evaluation by the end of 2026 to assess its impact on the German healthcare system. It includes criteria such as preventing market withdrawals of medication, potential cost savings, and any unintended consequences like administrative costs or changes in drug expenditure.

Link between drug pricing negotiation and local clinical trials

The Medical Research Act also introduces a mechanism that ties drug pricing negotiations to local clinical trial involvement. Specifically, drugs that have a significant portion of their clinical trials conducted in Germany will receive greater flexibility in reimbursement negotiations.

Criteria:

• To qualify, at least 5% of all participants in the clinical trial are enrolled at German sites
• It is only valid for medicines with patent-protected comparators and the new medicine offers minor, unquantifiable, or no added benefit
• Non-interventional clinical studies are excluded

While the GBA has the authority to verify the plausibility of manufacturer-provided figures based on study documents, it is not formally obligated to investigate the data.

Next steps

The next steps involve the Parliament-approved bill passing through the German Federal Council (Bundesrat) before the Medical Research Act takes effect. Once approved, the provisions concerning the confidential reimbursement price and the new connection between drug pricing and local clinical trials will be implemented from 1 January 2025.

Bhakti Dhingra, Senior Analyst at Lightning Health commented, “The introduction of confidential reimbursement prices is a controversial yet innovative move by the German government. The move seeks to resolve the issue of international reference pricing, which has often restricted patient access to medications in Germany. However, the accompanying 9% discount and local R&D requirements could dissuade companies, especially if negotiated prices are unfavourable. Going forward, integrating these new pricing and reimbursement criteria during the early phases of clinical trial planning will be pivotal in determining trial locations and product launches.”

Abbreviations

AMNOG: Arzneimittelmarktneuordnungsgesetz (German Medicines Market Reorganisation Act)

ATMPs: Advanced Therapy Medicinal Products

BfArM: Bundesinstitut für Arzneimittel und Medizinprodukte (Federal Institute for Drugs and Medical Devices)

GBA: Gemeinsamer Bundesausschuss (Federal Joint Committee)

GCP: Good Clinical Practice

GMP: Good Manufacturing Practice

·      PEI: Paul Ehrlich Institut

·      R&D: Research and Development

References

1. Bundesministerium für Gesundidheit. Medical Research Act. 2024 Jul 04. https://www.bundesgesundheitsministerium.de/presse/pressemitteilungen/medizinforschungsgesetz-bundestagsbeschluss.html
2. Deutscher Bundestag. Bundestag adopts law to strengthen medical research. 2024. https://www.bundestag.de/dokumente/textarchiv/2024/kw27-de-medizinforschungsgesetz-1011536

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