by Jennifer Collins
BERLIN, Nov 13 (APM) - Germany is becoming a parallel export market in a phenomenon set to continue as health technology assessment and other factors push down new drug prices to significantly below those in some EU countries, a senior analyst at IMS Health told APM.
While Germany is still Europe's biggest parallel import market with 54% of exported drugs ending up within its borders, pricing legislation is fuelling German parallel exports with many patent-protected drugs “under an AMNOG reimbursement price” already being shipped abroad in particular to Scandinavia and Austria, IMS Health senior manager Frank Weissenfeldt said.
“As reimbursement prices negotiated in the AMNOG process often lie far under European reference levels, Germany will necessarily and increasingly become an export land for drugs. This could lead to delivery shortages,” Weissenfeldt, who co-authored the recent IMS Health report, “Parallel Trading: Which factors determine the flow of goods in Europe” told APM in an interview.
According to the German-language report, the dynamic between added benefit assessment, reimbursement prices, mandatory discounts, fluctuating exchange rates as well as the European price referencing system has led to export increases in Germany.
In a recent study carried out by German health research institute, IGES, for pharma lobby group VfA, the reimbursement price of 29 new drugs in Germany fell below the EU's average in four out of five cases. (APMMA 39759)
The VfA said reimbursement prices, mandatory discounts and prices freezes resulted in the differences with the rest of Europe, even in cases where an added benefit rating under health technology assessment should mean higher prices for the new drug compared to similar therapies.
Weissenfeldt told APM that as part of international price referencing, German prices are “mostly compared to countries that are economically weaker than the Federal Republic”, which is also pushing down prices along with AMNOG.
Weissenfeldt said: “12 'price reference countries' have a smaller gross domestic product (GDP) per capita than Germany. Only in Austria, the Netherlands and Sweden is GDP per capita - and therefore, also purchasing power - over the German level.”
According to the paper, domestic legislation affecting drug prices can strongly influence parallel trade flows. For instance, parallel import laws introduced in Germany in 2004 caused a slump in German imports.
The new legislation introduced import quotas, guaranteeing at least a 5% market share for parallel imports with the aim of saving public health insurers' money but also stipulated that parallel imports purchased by German pharmacies must be 15% or 15 euros (the 15/15 test) cheaper than the equivalent original. (APMMA 35703)
The actual price difference between parallel imports and originals was around 10% before 2004 and following the introduction of the 2004 social security provisions, parallel imports fell sharply because many didn't make the 15/15 cut, according to the report.
The introduction of mandatory drug discounts in 2010, which oblige pharmas and parallel importers to give statutory health insurers a discount on drug prices and which the latter have to take into account in the 15/15 price difference, have also had an effect on parallel trading flows.
Between 2010 and 2013 when the discount was increased from 6% to 16%, strong growth in imports of oncology, HIV and central nervous systems therapies ended, causing stagnation in those years. The reduction of the discount to 7% in April 2014 led to an upswing in the import of those drugs again.
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