Posted 03 October 2017
By Elvira Müller, PhD, MPH
This profile summarizes the reimbursement process in Germany, presents responsibilities for key stakeholders and highlights issues for consideration early in the development process.
Obtaining regulatory approval for medicines is the first major hurdle of most pharmaceutical and biotechnology companies wanting to launch their products worldwide. However, obtaining market access once products are approved by regulatory agencies is a separate and crucial process without which patients would not have access to new therapies. Each country has a complex process with varying requirements by various agencies, resulting in pharmaceutical companies having to establish product value above and beyond clinical efficacy.
German Reimbursement Process
|Table 1. Key Reimbursement Stakeholders|
|Joint Federal Committee: Gemeinsamer Bundesausschuss (G-BA)||G-BA, the Joint Federal Committee, a discrete public legal entity, is the highest decision making body of the joint self-government of physicians, hospitals and health insurance funds. The Federal Ministry of Health (BMG) provides the legal framework under which the G-BA operates and ensures legal instructions are implemented. Directives concluded by the G-BA apply to the statutory health insurance funds, persons insured by these funds, the responsible physicians and other service providers, and are binding for these parties.|
|The National Association of Statutory Health Insurance Funds: Gesetzliche Krankenversicherung Spitzenverband (GKV-SV)||GKV-SV has a central role in the German healthcare system at the federal level in accordance with the German Social Code Book (SGB V). Together, GKV-SV and pharmaceutical companies negotiate the reimbursement prices paid by the statutory health insurance funds as well as private health insurances. Approximately 90 percent of the German population have Statutory Health Insurance (SHI).|
|Institute for the Remuneration System in the Hospital: Institut für das Entgeltsystem im Krankenhaus (InEK)||InEK is responsible for the German Diagnosis Related Group (DRG) system (maintenance and development) and decisions on supplemental fee tariffs. For new diagnostic and treatment methods to be used in hospitals, InEK accepts applications for a new DRG/supplemental fee on an annual basis for review. A new diagnostic/treatment method can be used in hospitals and is reimbursed within existing DRGs as long as it is not forbidden.|
|Institute for Quality and Efficiency in Healthcare: Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen (IQWiG)||IQWiG reviews and evaluates medicinal products on assignment by the G-BA. The assessment of the additional clinical benefit versus a comparator by applying evidence based medicine criteria supports the appraisal by G-BA if and to what extent an additional benefit is granted.|
In Germany, hospitals are financed through dual pathways. Investment costs are covered by federal states while operating costs (personnel and material costs) are covered by statutory health insurance. Hospitals are primarily reimbursed for admissions based on the DRG system. DRG tariffs are maintained and developed by the InEK and consider regional variations. All costs of admissions, including physicians' fees, medical devices, use of equipment, and pharmaceuticals are covered within the DRG. For expensive treatments and procedures, such as expensive devices, oncologic therapies, or orphan drugs, there exists the possibility of receiving a supplemental fee (extra-payment) in excess of the DRG tariff. A formal application by the hospital to the InEK is required to obtain new supplemental fees or DRGs. Hospital funding is negotiated on an annual basis with GKV (Statutory Health Insurance Funds) with consideration of additional factors for each hospital throughout the year. Expensive machineries are purchased by the hospital through capital equipment and reimbursed through treatment during a hospital stay. For patients under Private Health Insurance (PHI) who are treated in a hospital, reimbursement is covered by the same DRGs as for the GKV. PHI adopts the DRG catalogue negotiated with the GKV.
Prescription drugs are distributed through retail pharmacies. The pharmacy retail price must be in accord with legal regulations. Prescription drugs are reimbursed by GKV with a fixed patient copayment, depending on package sizes. Reimbursement starts immediately after market launch. Drug treatments can be initiated in hospitals and continued for outpatients through a prescription issued by a practitioner and available through retail pharmacy.
New Treatment Approval Process
In January 2011, in accordance with the Act on the Reform of the Market for Medicinal Products (AMNOG), a new law came into force for the early benefit assessment of pharmaceuticals with new active substances or new applications.1 Since then, manufacturers have been required to submit a dossier demonstrating the benefit of their product to the G-BA adhering to stringent evidentiary requirements in terms of the appropriate comparator, patient subgroups, acceptable endpoints, and methodology. IQWiG then reviews the dossier on request of G-BA within three months. G-BA assesses additional clinical benefits of a treatment versus a comparator by applying evidence based medical criteria. Following a hearing, G-BA decides if and to what extent additional benefits are granted based on the benefit assessment dossier, evidence gleaned from the hearing and other information. Categories of additional benefit are major, considerable, marginal, non-quantifiable, not-proven or less. Few exemptions exist concerning requirements, but there are exemptions for orphan drugs. The outcome of the benefit assessment is a key driver of price negotiations. If additional benefit is proven, within six months the GKV-SV and the pharmaceutical company have to negotiate the reimbursement price paid by the statutory health insurance funds. If the G-BA decides the new pharmaceutical does not have additional benefit over the appropriate comparator, it will be included in the reference price system within six months of market launch. The reimbursement prices are valid for both statutory health insurance and private health insurance. Figure 1 provides an overview of the AMNOG process from market launch to final reimbursement price determination.
Figure 1. Reimbursement of Drugs in Germany
Reimbursement for outpatient and inpatient use of medical devices in Germany differs substantially. After receiving the CE mark, a new diagnostic/treatment method can be sold to a hospital and is reimbursed within existing DRGs as long as it has not been rejected by the G-BA (prohibition right). Before they can be used, medical devices for outpatient use have to be approved by G-BA based on diagnostic and medical benefit, medical need and efficiency. A new device will be included into the Einheitlicher Bewertungsmaßstab (EBM), i.e., doctor's fee scale for billing outpatient services in the statutory health insurance. If rejected by G-BA, the MD will not be reimbursed. Figure 2 provides an overview of the different pathways for MDs following CE authorization.
Figure 2. Different Pathways for MDs Following CE Authorization
This profile has provided an overview for navigating the reimbursement landscape in Germany. Additional information can be found via the following links:
Federal Association of Statutory Health Insurance Physicians (KBV Organization)
Federal Ministry of Health (BMG)
German DRG System
German Social Code Book (SGB V)
Joint Federal Committee (G-BA)
Medical Service of Individual Health Insurance Funds (MDK)
Medical Service of the Federation of Health Insurance Funds (MDS)
- Benefit Assessment Procedure of the Joint Federal Comittee (G-BA). https://www.g-ba.de/informationen/nutzenbewertung/. Accessed 25 September 2017.
About the Author
Elvira Müller, PhD, MPH, is managing VP at Analytica Laser, where she manages the value and market access consulting team based in Germany. She oversees the strategic, scientific and operational performance for a broad range of global services covering value and reimbursement dossiers, reimbursement strategic advice, Health Technology Assessments (HTA) as well as evidence synthesis. For German market needs, she and her team focus on strategy consulting, dossier development, and advanced analytics tailored to AMNOG requirements. She has more than 15 years of experience in global market access and health economic engagements and applies her senior expertise in providing high-quality scientific evidence to optimize the value of pharmaceuticals and medical technologies. Müller also holds lectures in HTA and public health at local universities and gives seminars on German market access at university educational courses. She holds an MSc and PhD in biology and toxicology from Würzburg University and a Master of Public Health from Ulm University. She can be contacted at email@example.com.
Cite as: Müller, E. "Germany Reimbursement Profile." Regulatory Focus. September 2017. Regulatory Affairs Professionals Society.