The New German Coalition Agreement - Life Sciences Part

On November 24, 2021, the new German coalition presented its coalition agreement and plan for the next four years (1). The agreement was approved by the respective party committees and signed by the party leaders on December 7, 2021(2). The plan outlines a wide range of reforms for the healthcare and life science sector, but the following sections will have the greatest effect on biopharmaceutical companies (1).

The new government’s roadmap foresees reforms in the healthcare and life sciences sector that will have a significant impact in particular on pharmaceutical and medical device companies but also healthcare providers and technology companies focusing on the healthcare and life sciences sector.

In particular, there will be far-reaching cost-containment measures by amending the drug pricing and drug reimbursement rules. The new government also plans legislative changes in the areas of supply of medicines, vaccines and medical devices. Moreover, the enhanced digitalization of healthcare is a particular goal of the new coalition. With respect to digitalization, Germany generally and especially its healthcare sector starts from a rather low development stage (e.g., still widespread use of fax machines) so that significant investments will be needed.

Among other things, the Pharmaceutical and Medical Device roadmap of the coalition parties includes the following plans with respect to the life sciences sector:

Pricing procedure. The coalition parties wish to amend the drug pricing and market access procedure (AMNOG). Under the current regulations, the pharmaceutical companies are entitled to a period of free pricing for 12 months after the product launch. The coalition parties now plan to reduce this free pricing period for new drugs from one year to six months. According to their plans, the negotiated reimbursement price (Erstattungsbetrag) will apply from the seventh instead of the 13th month after launch. This measure is intended to increase cost-containment options for the statutory health insurance (SHI) fund.

Further cost containment measures to limit drug prices. The new government has also announced that it will generally strengthen the possibilities of the health insurances to limit the prices of medicines. The pharmaceutical industry needs to be prepared that the new government will employ several different measures to reach this goal.

Price freeze. Among the more concrete measures to limit drug expenditures, the new government plans to prolong the existing and quite controversial price freeze (Preismoratorium) for medicines. The industry needs to be prepared to a perpetuation of this significant cost containment measure which undoubtedly has a severe impact on pharmaceutical companies in Germany. The prolongation of the price free may triggera new discussion around the legality of this legislative prohibition.

Federal Joint Committee. The new coalition parties plan to reform the rules governing the Federal Joint Committee (G-BA) to speed up its decisions.

Patient Rights and Patient Involvement in Market Access. Patient centricity appears to be another special concern for the new German government. The coalition agreement sets forth that the new government will strengthen the structures for independent patient counseling and enhance their independence. The new government will enhance the representation of patient groups in the G-BA.

Supply Security and Reshoring. The new coalition parties wish to prevent any shortages in the supply of medicines and vaccines. Among others, the parties want to take measures to relocate and re-shore the manufacturing of pharmaceuticals back to Germany or the EU. In addition, a Health Security Act (Gesundheitssicherstellungsgesetz) is intended to ensure the efficient and decentralized stockpiling of medicines and medical devices, as well as regular emergency exercises for health risk personnel.

More Transparency and “Sunshine laws” against Conflicts of Interests.  The coalition agreement announces that the new government will create more transparency about financial contributions made to healthcare professionals to avoid conflicts of interests. Hence, the new German government appears to consider new Sunshine legislation for the healthcare and life sciences sector in Germany.

Pharmacies. The new coalition envisages various changes and legislative amendments in the rules governing pharmacies and pharmaceutical services.

Digitalization. The coalition parties especially emphasize their goal to improve the digitalization of the German healthcare system. Among the many goals, they want to provide more telemedical services to patients on a regular basis. They also plan to accelerate the introduction of the electronic patient record (elektronische Patientenakte) as well as the connection of all relevant players to the telematics infrastructure.

Research Use of Health Data. The new German government also plans to enhance the possibilities to use health data for scientific research purposes by public and private entities (1).

The new roadmap is undoubtedly a consequence of the Covid-19 outbreak, and it will likely soon be applied to all EU countries. It is an opportunity for the European biopharmaceutical industry to discuss and harmonize regulatory strategies, approaches and tools that can help to improve research processes and increase manufacturing capacity to ensure that the production of new vaccines and therapeutics can  meet global demand. It is also a reflection of the considerable ongoing collaborative efforts since the start of the pandemic aimed at avoiding or mitigating shortages of vaccines and therapeutics for non-COVID-19 related products. This agreement underscores the need for cost containment to avoid a cost burden for payers and to improve access to new medicines for patients.

It is an opportunity for European healthcare stakeholders to share emerging best practices and offer solutions in the spirit of collaboration, cooperation, and co-creation, which has featured so strongly between all partners seeking to respond to global public health needs.

In future, the biopharmaceutical market will, in part, be driven by the emergence of new diseases and technologies triggering the need for effective vaccines and novel therapies at affordable prices. The German coalition agreement will increase demand for faster approval processes, a transformed regulatory landscape, and growth in emerging fields – such as specialty therapies, vaccines, orphan drugs, or personalized medicines for some indications in the fields of cancer, chronic diseases, and emerging infectious diseases. Patient centricity will also play a central role in the development of new medicines and in the pharmaco-economics model in Europe.

Biopharma innovators must consider strategies for product development and the need to fulfil regulatory obligations at all stages of development as well as pre- and post-market. To maximize their potential, these companies must ensure they are targeting the right markets with the right medicines, and that they are able to safely fast-track delivery of much-needed treatments at an affordable and sustainable price point, harnessing the right partnerships as they go.

More than ever, there is growing demand for professionals who understand the overall regulatory landscape and can help companies effectively bring products to market. Developing that understanding requires staying up to date on emerging trends within the industry.

ProductLife Group (PLG) has a team of biopharmaceutical regulatory experts with an extensive experience and understanding of biopharmaceutical product development, registration, market access, and commercialization. PLG provides flexible and tailored pre-clinical, clinical, and market access solutions designed to help biopharmaceutical companies move forward in their effort to get treatments to patients at an affordable price – from helping to define the development plan, to implementation of all stages of product development, through launch and commercialization – in order to deliver compelling results to regulatory authorities, investors, and healthcare stakeholders.

References:

• Dr. Adem Koyuncu, Sophie Oerter & Katharina Ewert. “New German Government plans significant changes with Impact on the Healthcare, Life Sciences and Food Sector”. Inside EU Life Sciences, November 29, 2021
• Jared Reed, Leonie von Hammerstein. “Germany’s incoming government signs coalition deal”. DW News, December 7, 2021.